US Unemployment

[Americano]

Estimates of US private sector job losses for Dec08 are 693,000.

http://www.reuters.com/article/newsOne/idUSWEN227520090107

This doesn't include government job losses (if any) and if this coming Friday's 'official' report matches the estimate it'll be the largest single month loss in 59-years.

How deep is the recession going to go? Any guesses?

[partofme]

Who knows. When I first closed the store I would find a dozen or so jobs to put in a resume for a week. Now I'm down to one or two a week if I'm lucky. The system that handles unemployment checks by having people on it call in to a automated system hasn't been able to handle the increased volume and nobody on it has been able to request their checks for the last five days.

[The Drunk Guy]

Who knows. When I first closed the store I would find a dozen or so jobs to put in a resume for a week. Now I'm down to one or two a week if I'm lucky. The system that handles unemployment checks by having people on it call in to a automated system hasn't been able to handle the increased volume and nobody on it has been able to request their checks for the last five days.
And Unemployment lasts for six months, right? What about all those poor saps that are going off Unemployment? What's their percentage?

[partofme]

And Unemployment lasts for six months, right? What about all those poor saps that are going off Unemployment? What's their percentage?

It lasts six months but they passed a seven week expansion of that and thirteen weeks for states with really high unemployment. I have no idea how people coming off of it are doing. The thing about it is that you better take a job you will like coming off of it and something that will not go away because you can't draw it within two years of coming off of it. I feel sorry for people that are on it and then take a job that only lays them off a month or so down the road.

[drgoodtrips]

It lasts six months but they passed a seven week expansion of that and thirteen weeks for states with really high unemployment. I have no idea how people coming off of it are doing. The thing about it is that you better take a job you will like coming off of it and something that will not go away because you can't draw it within two years of coming off of it. I feel sorry for people that are on it and then take a job that only lays them off a month or so down the road.

One would hope that any company with such obviously stupid hiring practices and that level of incompetence would quickly go bankrupt and cease to be a drain on humanity. Even for a minimum wage job, the training and salary overhead for that would completely offset the benefit of that month of labor. That's the equivalent of someone deathly allergic to shrimp walking into a restaurant and ordering the seafood sampler.

[partofme]

One would hope that any company with such obviously stupid hiring practices and that level of incompetence would quickly go bankrupt and cease to be a drain on humanity. Even for a minimum wage job, the training and salary overhead for that would completely offset the benefit of that month of labor. That's the equivalent of someone deathly allergic to shrimp walking into a restaurant and ordering the seafood sampler.

True but many places don't know they are going down. Such as when a company surprises everybody and closes a bunch of it's stores. If Circuit City didn't have the people to stick around while it had it's weeks of clearance trying to get rid of all of it's inventory it would have to have had somebody.

[Michael]

Estimates of US private sector job losses for Dec08 are 693,000.

http://www.reuters.com/article/newsOne/idUSWEN227520090107

This doesn't include government job losses (if any) and if this coming Friday's 'official' report matches the estimate it'll be the largest single month loss in 59-years.

How deep is the recession going to go? Any guesses?
Krugman predicted US would hit double-digit unemployment in Q1 2009.

[Americano]

Krugman predicted US would hit double-digit unemployment in Q1 2009.

I think that's a reasonable forecast. When looking at what are major production cutbacks of consumer goods intended for export by China, Japan and all export subcontractors any service economy such as the US is in for a big hit way beyond Q1.

Toyota, who produced nearly 10-million vehicles worldwide, announced 7-million is their panic point and they're preparing for just that. If one uses a potential 30% reduction by a successful global manufacturer as a guideline we're really pissing away money to save GM and Chrysler and IMO that 30% number should be used by any company modeling for the future.

[Americano]

One would hope that any company with such obviously stupid hiring practices and that level of incompetence would quickly go bankrupt and cease to be a drain on humanity. Even for a minimum wage job, the training and salary overhead for that would completely offset the benefit of that month of labor. That's the equivalent of someone deathly allergic to shrimp walking into a restaurant and ordering the seafood sampler.

That's the reason smart companies are using temp labor. They get the skills they need without investment and the unemployed labor pool of all skills including professional levels is obviously growing.

[The Drunk Guy]

That's the reason smart companies are using temp labor. They get the skills they need without investment and the unemployed labor pool of all skills including professional levels is obviously growing.
And don't forget that, with the financial pinch, companies are working in a per-contract fashion. They hire and fire based on what sales are already set in stone and not based on potential future sales.

[Americano]

And don't forget that, with the financial pinch, companies are working in a per-contract fashion. They hire and fire based on what sales are already set in stone and not based on potential future sales.

I'd think being being in a management position from marketing all the way to the top in a consumer industry currently has some serious stress levels. Using temp labor as required is sound business with no global economic bottom in sight.

[The Drunk Guy]

I'd think being being in a management position from marketing all the way to the top in a consumer industry currently has some serious stress levels. Using temp labor as required is sound business with no global economic bottom in sight.
I think being in a temp position is much more stressful. ;)

Personally, this is the first time I've ever been actually worried about losing a job. I'm not close to losing one (medical industry is still going), but the worry of making a mistake is something new to me. I've never really cared about what I work at, but with no guarantee of getting another job after this one, a man can't not worry.

[Americano]

I think being in a temp position is much more stressful. ;)

Personally, this is the first time I've ever been actually worried about losing a job. I'm not close to losing one (medical industry is still going), but the worry of making a mistake is something new to me. I've never really cared about what I work at, but with no guarantee of getting another job after this one, a man can't not worry.

Our county is already at 9.7% unemployed, and that's using fed standards of not counting those who have dropped off benefits, independent contractors and not 'actively seeking work'. Another reason (here) many employers have gone to the sole temp agency in town is to avoid the mob of people showing up for any advertised job.

[drgoodtrips]

True but many places don't know they are going down. Such as when a company surprises everybody and closes a bunch of it's stores. If Circuit City didn't have the people to stick around while it had it's weeks of clearance trying to get rid of all of it's inventory it would have to have had somebody.

Ah, fair enough. But, I was thinking more of professional level employees. Bad economy or no, I don't think retail salesman will have much trouble finding work. When I came out of school to find the economy in the crapper, that's what I went to do for about six months.

[drgoodtrips]

I'd think being being in a management position from marketing all the way to the top in a consumer industry currently has some serious stress levels. Using temp labor as required is sound business with no global economic bottom in sight.

In my department (software engineering), we generally maintain a "buffer" of contractors and outsourced work. The idea is that we have some normalized workload and, rather than hire full time employees for spikes, we contract. I have a nice barometer for my job security that way. As long as there are contractors to stop using, it's unlikely that they're going to lay off salaried exempt employees, barring any sort of misconduct or incompetence.

[partofme]

In my department (software engineering), we generally maintain a "buffer" of contractors and outsourced work. The idea is that we have some normalized workload and, rather than hire full time employees for spikes, we contract. I have a nice barometer for my job security that way. As long as there are contractors to stop using, it's unlikely that they're going to lay off salaried exempt employees, barring any sort of misconduct or incompetence.

Just watch out for the Bobs.

[Americano]

In my department (software engineering), we generally maintain a "buffer" of contractors and outsourced work. The idea is that we have some normalized workload and, rather than hire full time employees for spikes, we contract. I have a nice barometer for my job security that way. As long as there are contractors to stop using, it's unlikely that they're going to lay off salaried exempt employees, barring any sort of misconduct or incompetence.

Sounds like you have government contracts.

Japanese industry, including vehicle manufacturing, has operated in a similar manner, temp labor for production spikes, since the early 1990s to preserve their image of the lifetime job for permanent employees. I'd think any competent company management dependent on consumer markets without government contracts has already drawn up the short list of necessary employees in their operating models. If we're looking at a 25-30% economic contraction salary level and contribution by employee will be under the magnifying glass.

One employer plus in high unemployment scenarios is the availability of high skill levels for far less money. When US wage levels drop to a point where outsourcing of skilled labor for cost purposes to remain competitive becomes unnecessary, we should be close to the bottom.

[Americano]

Ah, fair enough. But, I was thinking more of professional level employees. Bad economy or no, I don't think retail salesman will have much trouble finding work. When I came out of school to find the economy in the crapper, that's what I went to do for about six months.

Retail is taking some of the largest contraction hits in the country as consumer spending decreases. Plenty of big retail chains have already tossed in the towel with more on the way. $8/hr Wal-Mart retail sales jobs are prized in my area. My wife knows the manager and she (the manager) says they're inundated with requests for employment applications on a daily basis.

[drgoodtrips]

Just watch out for the Bobs.

Not bloody likely at my company. The consulting we bring in is revenue generating, not "revenue saving". If they want to cut cost, they just get out the axe - they don't bother paying someone to tell them how to use it.

[drgoodtrips]

Sounds like you have government contracts.

Yep. :)

Though I don't personally work on any of those projects.

Japanese industry, including vehicle manufacturing, has operated in a similar manner, temp labor for production spikes, since the early 1990s to preserve their image of the lifetime job for permanent employees. I'd think any competent company management dependent on consumer markets without government contracts has already drawn up the short list of necessary employees in their operating models. If we're looking at a 25-30% economic contraction salary level and contribution by employee will be under the magnifying glass.

One employer plus in high unemployment scenarios is the availability of high skill levels for far less money. When US wage levels drop to a point where outsourcing of skilled labor for cost purposes to remain competitive becomes unnecessary, we should be close to the bottom.

That's an interesting take. I hadn't thought of the effect that this would have on the outsourcing of various skilled and semi-skilled jobs. My company did some software design contracting out of India, and the experience here has largely been that if you pay $4 per hour for design work, you get $4 per hour worth of design work. Dealing with this company with its farm of developers an India has been an ongoing headache. Their code is garbage.

So, it's not as relevant to our company, since we were "re-domesticating" anyway, but still interesting. And, certainly, if you treat a certain portion of your labor pool as a variable cost, you can maintain the rest of it and tout good job security and smart hiring practices.

Retail is taking some of the largest contraction hits in the country as consumer spending decreases. Plenty of big retail chains have already tossed in the towel with more on the way. $8/hr Wal-Mart retail sales jobs are prized in my area. My wife knows the manager and she (the manager) says they're inundated with requests for employment applications on a daily basis.

Well, I would imagine that just weeds out the riff-raff. If you're competent and responsible I would bet you could get a retail job no problem right now. If your resume is written on a napkin and you show up stoned and wearing mesh shorts for your interview, you might have to wait a while before the Gulp and Blow hires you again.

[Americano]

Not bloody likely at my company. The consulting we bring in is revenue generating, not "revenue saving". If they want to cut cost, they just get out the axe - they don't bother paying someone to tell them how to use it.

When I was consulting one of the major considerations of client companies was the outside expertise going a long ways to dissuade legal raids on the D&O and liability insurance by disgruntled stockholders and supposed key employees. Those under employment contracts were no problem, pay them off and they're gone. The others seemed to have a lawyer in every pocket with discrimination based on seniority being the most popular (and generally the ones who needed to go). Nuisance lawsuits are thrown out or quickly settled with objective outside consultants making the calls. We used to call it blood in the halls time.

[drgoodtrips]

When I was consulting one of the major considerations of client companies was the outside expertise going a long ways to dissuade legal raids on the D&O and liability insurance by disgruntled stockholders and supposed key employees. Those under employment contracts were no problem, pay them off and they're gone. The others seemed to have a lawyer in every pocket with discrimination based on seniority being the most popular (and generally the ones who needed to go). Nuisance lawsuits are thrown out or quickly settled with objective outside consultants making the calls. We used to call it blood in the halls time.

That makes sense. It's an angle I hadn't really thought of - it doesn't make the layoffs any more "productive", but as a CYA strategy to avoid the illusion of impropriety.

I've seen waves of layoffs here, and the Bobs have never been brought in. My company does have a legal department with a licensed attorney (I think this is more for IP work than anything else), so perhaps that explains why that isn't done here.

[Americano]

That makes sense. It's an angle I hadn't really thought of - it doesn't make the layoffs any more "productive", but as a CYA strategy to avoid the illusion of impropriety.

Management consulting at a senior level is more an issue of faulty management being rooted out to eliminate impropriety through ego, greed or incompetency. As long as a company has sound management, is providing satisfactory ROI to the owners and experiencing ongoing growth from internal operations, it'll probably never see the hatchet men.

Most of our work came through contacts by our fearless leader at one of the CEO clubs and consisted of acquisitions that were proving hard to digest and poorly managed companies with new CEOs. You don't employ internal assets to resolve those issues, that puts an additional load on what good management there is and makes them the bad people. You want outside people who can focus their resources solely on an evaluation of existing conditions and make objective recommendations to resolve the issues. The CEO then takes that recommendation to the board for approval, which is the real CYA, and the blood runs.

I've seen waves of layoffs here, and the Bobs have never been brought in. My company does have a legal department with a licensed attorney (I think this is more for IP work than anything else), so perhaps that explains why that isn't done here.

Any company of any size normally has in house counsel. For a corporate headquarters with varied industry subs it often includes a dozen or more lawyers with staff for proprietary work, just as yours probably is. When it comes to serious stuff most all go outside for litigation specialists.