Lower Paid Workers Getting Laid Off First

from the counter-intuitive dept

I recently heard that this recession was different than ones in the past because layoffs were backwards. In earlier recessions companies often laid off expensive, older employees and replaced them with cheaper newcomers. However, now a study has shown that layoffs seem to be focused on lower wage employees. The theory presented in the article is that these companies value the “experience” of the higher paid employees more. I wonder if more it isn’t because during the boomtimes people were trying to hire anyone, and found all sorts of oddjobs to give people just to put them on staff. Now, as they’re cleaning house, they’re realizing that they really don’t need their very own “event planner” or other less well paid position. Also, companies are looking to outsource more functions, and it makes more sense to outsource functions that are less critical to your business (and which, in turn, employ people at lower wages).

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Comments on “Lower Paid Workers Getting Laid Off First”

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Oliver Wendell Jones (profile) says:

Maybe they learned something?

I know that when my employer had a major layoff 6 years back, they let go a lot of the IT development people.
Less than 6 weeks later there were e-mails being circulated stating that they had a need for people with an interest in IT development to voluntarily transfer to the IT development group on a temporary or permanent basis because they needed people with industry specific experience.
I had been working as a research scientist with the company for years and had an interest in development and volunteered. A few months later I was transferred ‘permanently’ and received a greater than 10% pay increase in the process.
I know a lot of other departments got hurt in the same way, by getting rid of the older, more experience, more expensive employees, and I think if the company were to downsize again, we’d see more of the new guys getting pink-slipped than before.

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