Visit Your Local PBS Station PBS Home PBS Home Programs A-Z TV Schedules Watch Video Donate Shop PBS Search PBS

That Money Show
Home Features One Minute MBA Making Change Money Talks Money Makers Glossary Resources
Cover Story Illustration

Cover Photo

"It's a huge shock," said Margot Douaihy about February 14th -- Valentine's Day. No flowers for the one hundred and one dot com employees at e-Town, just pink slips. According to co-worker Jim Wilcox, "There was no warning. I didn't see it coming."

After denying their consumer electronics Web site was at risk for months, e-Town closed ... e-mmediately. Assistant managing editor Margot Douaihy, an employee since 1999, explained, "People had been there for 6 years, which in Web years is dinosaur years in a lot of ways."

If 6 years is an eternity for a Web firm, consider the story of the New Jersey-based American Standard plant. The factory has been making bathroom fixtures since 1929. On January 2nd, stunned employees were told it too would be closing in a matter of months. James Carey, one among the two hundred seventy-four workers who had already survived a massive layoff more than 5 years ago, said, "Back in '95 they downsized about half the work force and we figured that would be it. They asked us to try to do better. We pulled together and things were looking good. They said we were making money." Now American Standard is consolidating their New Jersey facility with one in Ohio.

A slowing economy is hurting the job market as well. Gross Domestic Product (GDP), measuring economic growth, grew at the slowest pace in five years during the last quarter. According to outplacement firm Challenger, Grey and Christmas, announced layoffs in the last 2 months have totalled 250,000, compared to an average of just fifty-one thousand per month last year. According to Joseph Abate of Lehman Brothers, "Part of what's been happening is that companies are more inclined to make adjustments in their labor force than they were 10 years ago, and they're doing it a lot quicker."

One hundred forty-three Internet companies have disappeared in the last year. In the process, some are helping to redefine layoffs. E-towner Jim Willcox was hired as director of content in December. 2 months later, Jim told us, "The one thing we didn't expect was for our C.E.O. to announce that the company was being shut down, and that's sort of what happened. I think a lot of people were taken aback by the abruptness and severity of how the company was ended."

American Standard is following a more traditional model -- giving employees at least 2 months notice. Union workers are also getting severance in the amount of 40 hours for each year they've worked at the plant, 6 months paid insurance, and a dollar an hour raise until the plant closes. These seem like good benefits but, if history is any guide, these soon-to-be-unemployed factory workers may need them.

Cover Photo

Abate observed, "The manufacturing jobs are harder to replace, and this partly reflects a shift in the overall economy over time away from manufacturing." In the last 50 years, manufacturing jobs declined from 34% of the workforce to 14%. No one knows this better than James Carey wo told us, "When you are a child they tell you, 'go to school,' 'go to college,' and I chose to go in to the workforce, and you see I look at it now like I should have taken that choice and picked up a trade. That way I wouldn't be in this situation after twenty-three years in the factory. I have a skill that I can't even use out here. I have to find another skill at the age of forty-five years."

Now James Carey is focussed on his future and not his past. Said James, "It's a blessing. I figured I could go to school, pick up a trade and do something different." The field he's looking into -- Web page design -- according to Joseph Abate, may not be as risky as it sounds. According to Abate, "If you get laid off in a manufacturing job it's much harder to find a new job. Whereas if you're a dot-com employee, or someone with technical skills particularly in the computer services area, you're likely to get a job in some cases that very day."

That's exactly what happened to Jim Wilcox, who was offered a position at StarPolish, a new dot-com for musicians. Said Jim on his recent employment offer, "The coincidence was pretty astounding that the day I lost a job I was offered another one." Abate responds, "We're not all gonna be laid off, but it's prudent to behave as if you know you don't have a long-term commitment contract with your employer. Effectively, you are an employee at will, and if you employer's will shifts or changes, you will be laid off."

Wilcox laments, "I think the whole world has changed. You know, in my dad's generation, you went to a company and pretty much worked there, you got your gold watch, and retired. There's no real security like that these days in any business."

Check out the archives for more great stories.

Back to Top
  Sponsored by TIAA-CREF
Thirteen/WNET New York PBS Online T1 56k