It was especially difficult because our office is a fairly tight-knit group, starting at the top with our CEO, and filtering down to most everyone with whom I’ve ever worked. While it most intensely affects those who lose their jobs, it’s a very unsettling feeling for those of us still here due to concerns about friends that we will not see as much anymore. Some of us work out together. Some of us play golf or basketball together. Many of us have kids of similar age. Some of us hunt or attend concerts together. This cuts across organizational & departmental strata.
There can be no emotion involved when making these decisions though, which makes it very difficult to do since we’re humans. The emotions come later, and they did. The folks that carried out these actions did what they had to do to keep the company viable over the long haul. Otherwise, ALL jobs here could be lost. As I explained to my 11 year-old daughter what happened that day, it was important to see it for what it was, to use the proper terminology; positions had to be eliminated due to work having dried up. It’s not merely that a person was cut from his or her job. I don’t know that I myself understood as much when I was laid off from Lucent Technologies back in 1999 (though my dad might have when rig-builder Skytop-Brewster in Victoria had to let him go in 1983).
There have been, on the other hand, some coworkers who left voluntarily during this time. Some left to gain more varied experience. Some left because they didn’t want the stress of dealing with the cyclical downturns that our industry experiences. Many left because our market is still experiencing volatility.
Therein lies an important point; our employment is at-will, meaning we are as free to leave the company as it is to eliminate our position or terminate our employment. It works both ways, and many people forget that when bemoaning ‘big evil corporations interested only in making a buck’. Our labor market flexibility is one thing that makes the U.S. economy better than most, with fewer regulations on freedom of movement & deployment of resources. It’s a large reason we typically have a lower unemployment rate than other countries.
After the 1st such round of workforce reductions a year prior, the same daughter (the most inquisitive of my 4) asked me if I had a backup plan. I pointed to my efforts to sharpen my Spanish, among other things. I’ve had the pleasure of knowing many individuals who are pro-active in that regard. In addition to her speech pathology work, my sister, whose husband works in coil tubing in our industry, recently started selling cleaning supplies. One friend with whom I work is now an Uber driver in her free time. Another colleague at a previous job saved enough to open her own haircutting franchise. Many of the people working in the field have CDLs (commercial driver’s licenses), experience working in construction, etc.
The more we build our human & financial capital, the more prepared we are when a downturn comes, or to capitalize on other opportunities. Such behavior & farsighted use of spare time makes this possible. “The best job security is job insecurity.”
I have found that differentiating between cyclical unemployment (shifts in the business cycle from growth to downturn and back) & frictional unemployment (voluntary movements) is not terribly difficult for my students to grasp in the abstract. When it happens to you in real life, naturally it tends to have an adverse emotional impact (shock, anxiety, etc.)
There are various forms of (temporary) assistance available to people who find themselves swept up by large macroeconomic forces. Many companies offer severance packages. As a society we have deemed it appropriate to offer unemployment insurance funded by taxes levied on employers. There’s COBRA & Medicaid to help with health expenses as well.
In December, the government helped by possibly flipping the script on the other type of unemployment, structural, when Congress & President Obama lifted the ban on crude oil exports. The ban was enacted in 1975 as a result of the OPEC oil embargo (which itself was in response to U.S. military support for Israel) of 1973. The shale & fracking revolution of the 21st century, however, has us literally busting at the seams trying to store all this newly extracted oil.
Structural unemployment results from changes in the economy that tend to have long-term effects, like technology that results in less demand for retail cashiers as we buy more goods online. Free trade agreements also fit this criterion, and that’s essentially what lifting the ban is since U.S. companies are now free to sell crude on the international market. Even before the ban was lifted, Saudi Arabia was reevaluating ‘employees’ in their oil industry who spent much of their day lounging on couches.
The president has since reversed course somewhat by including in his proposed 2017 federal budget a $10 “fee” on every barrel of oil produced. The “fee”, ostensibly intended to fund “clean transportation”, would blunt any future positive economic effects of the jettisoned export ban (not to mention artificially raise prices for consumers).
Also in the budget is a proposal to enhance unemployment insurance. Assistance for workers who can prove they lost their job as a direct result of liberalized trade has always had support. It helps smooth acceptance of changes that will benefit our country as a whole. The proposed changes would pay a person a portion of the difference between the job lost and the lower-paying new job. These modifications, however, would numb the incentives of the aforementioned judicious habits. There’s more value, and arguably more personal fulfillment, in learning new skills than there is in keeping up with who a dude is going to pick to be his bride for the next year or two on some TV show.
Current Federal Reserve policies don’t help, as they discourage folks from saving, a cruel irony given that those very same policies play a role in fueling the boom & bust nature of our industry.
There have actually been a few calls of late to ‘bail out’ the oil industry, but that’s the last thing that needs to happen. We should be bailing out FEWER companies, not more. What those employed in our industry, and likely laborers in general, would probably appreciate more than anything is simply stable policy from Uncle Sam, so they can shape & direct their lives on their own terms.