“It will be mostly a white-collar recession. And the blue-collar recession will not be in the same places that we saw in the past.”
That was William Lee, chief economist at the Milken Institute, a Santa Barbara, Calif.-based think tank, in an interview with MarketWatch, speculating on the nature of America’s next recession.
Amid rising expectations among economists of a recession — commonly defined as two consecutive quarters of negative growth — Lee said there’s still a demand for blue-collar workers in service and manufacturing, which will help protect those workers if a recession hits.
New university graduates just hired will first out the door as the recession takes hold.
New university graduates just hired will first out the door as the recession takes hold.
Why? They are the cheap ones. They will let go of those who cost them more money and just dump all the work on the new hires. That’s what they did to me in 1990 when the industry I worked in slumped. Entry level grade 2 doing the work of a grade 8 manager…with supervision of course.
Licensed white collar workers have a lot of options. In effect a doctor really never has a boss. Yes a hospital can fire him or her, but the reality is, if not over major legal matters, a doctor, lawyer, engineer, accountant will work anywhere just for less money. Or more money.
If you are talking about office workers and managers? Depends. If it is in finance I agree saying good bye is very much a risk now.
Why? They are the cheap ones. They will let go of those who cost them more money and just dump all the work on the new hires. That’s what they did to me in 1990 when the industry I worked in slumped. Entry level grade 2 doing the work of a grade 8 manager…with supervision of course.
That’s exactly how it works. It seems like in times of slow down it seems like it would make sense to retain the more valuable, experienced workers. But in reality, when the MBAs want to cut payroll they go after the mid-level workers. Because that’s the easiest way to cut payroll.
White collar layoffs often use a list of employees sorted by salary. The question is which of these people is worth keeping. Senior level people get careful attention. Those on priority projects are safest. Those who work the fringes are most vulnerable.
Mid range people are easiest to promote and give more responsibility.
Entry level people are trainees and easy to replace.
Side note watch out for concierge service model. Worst service going. Dangerous if you are sick. The hypothetical better oversight fails in a lot of cases. It scrambles who is communicating if at all.
Why? They are the cheap ones. They will let go of those who cost them more money and just dump all the work on the new hires. That’s what they did to me in 1990 when the industry I worked in slumped. Entry level grade 2 doing the work of a grade 8 manager…with supervision of course. … That’s exactly how it works. It seems like in times of slow down it seems like it would make sense to retain the more valuable, experienced workers. But in reality, when the MBAs want to cut payroll they go after the mid-level workers. Because that’s the easiest way to cut payroll.
So it sounds as though you agree with me, that new college grads are not the first target, as was my experience in the 5 years of layoffs I survived. The company held tight onto their recent hires who were cheap, throwing us into the deep end of the pool and essentially allowing us to sink or swim. Product lines got cut with the better paid being sent to retirement, slapping us youngins into their jobs, without the title or pay, of course. Middle management took on more reportables as their peers got laid off. I all the sudden took over the research for a new line of products, getting sent to present at a conference about 5 weeks after the change, a mere novice BS grad in a sea of PhDs. In a previous layoff, I got sent over to production to set up and manage a quality lab, as we pulled testing in house. After 5 years of layoffs every 6 months, I finally volunteered for the layoff. After 5 years of having to lay off one after another after another, my manager was very grateful to have someone willing to be cut.
I had been hired the day before a hiring freeze went into effect, in an effort to pump up head count in the department, since they knew they would have to be cutting soon. Fun times in the refining industry.