LAID OFF, OR KNOW SOMEONE WHO WAS? Likely, Their Salary Will Never Catch Up!

By
Real Estate Agent with Dean's Team - Keller Williams Realty Partners Chicago IL

Good Evening, Folks!

It has been an incredible, temperate Memorial Day Weekend in Chicago.

But I feel sad to be the messenger of depressing news.  Unfortunately, however, stats are stats!

According to a study co-authored by Till von Watcher, an Economist with Columbia University, and reported by Greg Burns in today's Chicago Tribune, those who lost stable jobs during the recession of 27 years ago felt an immediate 30% average drop in earnings.  His figures come from U.S. Social Security Data, and other government figures.

Further, as a group, those laid off in the deep recession begun in 1982 haven't really caught up in earnings, versus those not laid off at that time.  Their incomes were, on average, 10% less than their peers in 1997.  Even today, many lag behind, says von Watcher.

The economist estimates that fewer than one in ten who fall victim to layoffs eventually come out ahead.  He points to two key reasons.

First, he surmises, is the lowered probability of finding another good job when you lose your own, stable position.  Further, as a whole industry experiences declines in demand, those with these industry-specialized skills might not easily find another good match for their own skills, especially among keen competition in a recessionary economy.

Economist von Watcher is very concerned that the next economic recovery will not be as kind to current laid-off employees.  He sees greater globalization of the labor force, and the continued competition from cheaper, overseas workers, could depress average income levels even more than was the case over a quarter century ago.

Brian Healy, director of a support group for the unemployed in the Northwest Chicago Suburb of Inverness IL, sees frustration and despair in laid-off employees who feel they have still given their employers their best effort, but now have less to show for it.  

At his Holy Family Job Support Group, Healy has often observed many middle managers downsizing their titles when they eventually get re-hired.  Those with titles of Director soon take jobs as managers, and so on.  Healy himself is currently regional manager of a national shipping firm.

See our post today via BlogChicagoHomes.com.

DEAN & DEAN'S TEAM CHICAGO

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chicago real estate news alert those laid off unlikely to make full financial recovery

Comments 3 New Comment

Rainmaker
124,647
Sandra White
Experienced Residential Resale Broker
John L Scott Real Estate

I never thought I would see something this rough in my lifetime.  I do know people who have been laid off, and it is very sad.  As hard as we work in real estate, at least we are in control of our destiny and cannot get laid off.  But come to think of it I am hearing from some people on AR that their office closed, so no one is safe. 

May 24, 2009 10:29 PM
Rainmaker
72,011
Bob Foster
Century 21 Lanthorn R. E. Ltd. Belleville, Ontario

I think my showings have now shifted to about half being foreclosures. Really sad.

May 24, 2009 10:46 PM
Rainmaker
545,189
Corinne Guest
Find Your Barrington Dream Country Suburban Home
Managing Broker-Barrington Realty Company

Our family was hit by this. My husband lost his job, he now earns about 50% of what he did. More pressure on me to make up the shortfall, no spending money anymore, believe me it is tough!

May 28, 2009 11:03 AM
Rainmaker
362,833

Dean Moss

Dean's Team Chicago IL Real Estate Team
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