Layoff the Layoffs: When Will They Stop?

Recession is a dirty word, but it’s the pace at which our economy is currently marching in decline.  With large corporations laying off employees each week, and unemployment numbers steadily climbing it doesn’t appear as if there is a recovery for the economy any time soon. 

How did this happen?

At the end of the day, our current economic condition is a result of the burst of the housing bubble.  Even though the banks have been offered a bail out, there is still apprehension over lending any amount of money in addition to tightened lending restrictions implemented with banks all around the country. This is only going to get worse after January, when restrictions are going to tighten down even more and less and less money becomes available to borrow. Because of this, people are afraid to buy, and are trying to hold on to as much liquid cash as is available. 

When the last economic bubble burst, it was coming off of the tail end of the IT boom in 2001, however, at that point, there had been enough new money created during that boom to prevent a massive recession or layoffs. Homeowners during that short, six month recession tapped into their equity, which kept the economy afloat at that point. Yet it was this boom that also fostered the current housing mess we find ourselves in and is the reason behind the recession we are facing today. 

At the end of the day, overly liberal lending practices, and greedy Americans buying up real estate are much more to blame than individuals who were on the lower end of the income area purchasing homes. 

How much longer is it going to last?

This could prove to be a difficult question to answer.  With economic conditions continually declining, it’s creating a snowball effect.  The more individuals that are laid off, the more individuals that won’t be able to pay their bills, which will result in further losses to the banks, and continue our economic decline deeper and deeper into a recession that could last as long as the Great Depression, and be just as devastating.  

American currency is declining at an alarming rate, and the stock market is headed for a crash, that could have global repercussions, not just national repercussions.  More layoffs with corporations are looming still, and there will be staggering unemployment numbers before all is said and done.  Small businesses will be negatively effected by this decline, and many “Mom and Pop” shops will probably have to close their doors prior to the end of 2009. 

How do we fix it?

Unfortunately, the path to recovery is going to be a marathon, not a sprint.  The American economy is a lot like a large oceanliner, and takes quite a bit of time to turn around without capsizing.  We are looking at a very long haul in order to repair the economy.  Here are the steps that need to be taken in order to get our economy back on track and get the layoffs to stop:

1) Cut down executive salaries and positions

Overhead.  There is no other word for it.  Many corporates allowed themselves to become fat and comfortable during the housing boom, and are now top heavy.  Corporate executives receiving massive bonuses and large salaries are draining companies dry.  Instead of cutting back on the janitorial staff it’s time to chop off some heads of CEO’s. 

2) Price reduction and profit loss

Big business isn’t going to want to hear this, but price reduction and profit loss is going to have to become a reality if you want to stimulate the public to buy.  Fortunately, if businesses cut down executive salaires and minimize overhead positions the price reduction won’t cut too far into the bottom line.  However, since most large companies wont’ take that first step, it’d doubtful that they will take the second.  The next thing that we are bound to see is an increase in prices nationwide on everyday neccessities in order to keep a reasonable profit margin for big business.

3) Economic stimulus package

Companies need to offer their customers a economic stimulus package.  Cash back offers and special pricing incentives for customer loyalty are ways to keep the public putting money into the economy, and can even create more jobs with individuals with the implementation of new programs.

4) Outsource outsourcing

The government needs to provide financial incentives for corporations keeping jobs within the states, and not outsourcing overseas.  This will bring jobs back to our shores, stop layoffs and give American’s an opportunity to get back to work after a string of disturbing layoffs.

5) Americans need to get off their “duff”

Like it or not, most Americans can’t compete in the job market.  They have become complacent, lazy and want something handed to them.  This is why they are losing jobs, and why companies have outsourced jobs overseas.  It’s time that American’s learned a new work ethic, and become more competitive in the job market. Learn a new language, improve your skills and do some reading on how to communicate better.  All of the resources are free and at your local library, or offered in community improvement classes. 

These five simple steps could have us on a road to recession recovery in 12 months.  However, whether or not they are taken and followed will be another story.