Unemployment for the Employed
By Marisa Porter
August 26, 2009
With the unemployment rate approximately ten percent, companies are forcing workers to take unpaid time off—a furlough. Having employees take vacation without pay allows the company to wait out the storm. Essentially, costs are cut while the number of employees remains the same—in a way. According to the U.S. Department of Labor Statistics, 2.3 million individuals above the age of 16 who were previously full time workers have been forced to take part time positions (Ortiz).
Companies such as British Airways are asking workers to take “voluntary” unpaid time off, while other businesses have announced mandatory furloughs. Consulting firm Watson Wyatt reported that as of April 2009, 17 percent of 141 human resource executives said they were instituting mandatory unpaid vacation days. At Hewitt Associates, a survey showed that approximately 363 of 518 U.S. companies (70 percent) were considering or had instituted mandatory furloughs (Tahmincioglu). Chicago City Council is even awaiting a proposal that requires specific city employees to take mandatory unpaid vacation time (Ortiz).
What is most concerning about these policies though, is that many companies are asking employees to “volunteer” for unpaid vacation time. In reality though, is it really voluntary? Workers will either take furloughs, get fired, or quit. Because of the struggling economy and competitive job market, workers would rather have some sort of job security than be unemployed. If you were given the options of less income or no income, in all likelihood, you would choose the former over the latter. If I were given the option of a furlough, I would not WANT to take time off, but if it meant keeping my job, I would grudgingly submit. So when a company says that their employees volunteer to take time off without pay, is this really true?
Msnbc.com writer Eve Tahmincioglu has also suggested that extended furloughs could be unemployment in disguise. If an individual is let go after an extended furlough, the first day of furlough would turn translate into the date of firing. This person then would be eligible for 60 days of immediate income under the federal Worker Adjustment and Retraining Notification Act, assuming the company has over 100 employees (Tahmincioglu).
With increasing furloughs, the government is being forced to re-examine and redefine their unemployment policies. According to state legislation, when a furlough is mandated, individuals are often eligible for unemployment compensation. Brian Dixon pointed out that, “The general rule is if you’re laid off for more than one week, you can obtain unemployment” (Tahmincioglu). When Gannett Corp. required all 41,500 employees at the Burlington Free Press to take two, one- week long furloughs, only approximately 50 individuals collected unemployment benefits during this time, even though all were eligible (Kelley).
This “furlough frenzy” also creates a sense of confusion and instability—in essence, people do not know when they will be working, and in turn what their income will be. These changes can lead to dramatic health effects including depression, increased feelings of anxiety and stress and even obesity. A study conducted by Sentient Decision Science for First Command Financial Services revealed that in May 2009, over one-half of Americans (51%) had experienced some sort of mental or physical health issue as a result of the economy. In a study looking at the effects of the 1974-1975 recession on levels of distress and dissatisfaction, 20 percent of the change in levels of distress was due to changes in various job characteristics—in essence, increases in job demands and the increasing perceptions of inadequate pay contributed dramatically to individuals’ increased feelings of distress (Tausig).
Today, individuals are experiencing similar changes in job characteristics as they did 30 years ago. In a study conducted by Sentient Decision Science, it was found that 11 percent of individuals have experienced a decrease in their wages, while seven percent have been forced to work overtime without pay. Additionally, individuals are being proactive in an attempt to keep their job—47 percent of Americans reported making some change in their behavior at work like working extra hours (14%), trying to stay updated on current trends (13%) and increasing networking within one’s industry or company (12%).
According to Turner, the effects of unemployment or a furlough on stress and mental health are caused by one of two things—either financial loss or a declining sense of self-worth. Individuals who are of a lower economic status will suffer from the financial loss of income. Because these individuals rely on their job, in essence for survival, their levels of stress will increase when they do not have the means to support themselves. Turner argues that individuals of a higher economic status likely “attach a greater portion of their personal identities to their careers,” so they will suffer from their feeling of inadequacy. Because “individuals in professional and upper-level…occupations are far more likely to report that they would continue to work, even if they had no financial reason to do so,” without relying on their job for a sense of self-worth, levels of anxiety and stress will sky-rocket. In the first group, if reemployment is possible, feelings of depression and anxiety will likely be short-lived. Because these individuals rely on their job only for the income, once this has been reestablished, their stress from unemployment will be eliminated (Turner).
According to a First Command Financial Services study, conducted by Sentient Decision Science, four percent of Americans have been forced to take furloughs, while six percent have been laid-off. According to writers Tausig and Fenwick, “although the impact of unemployment was not inconsequential, job restructuring was the most substantial cause of declining well-being for [the] full time workers” (Tausig). Despite the difference of over 30 years, the current recession is not largely different from that of 1974/75 recession and individuals are being forced to deal with similar changes in job characteristics. Unfortunately, physical and emotional consequences are further heightened because of the lack of opportunities for reemployment. Therefore, not only are individuals suffering who attach their personal identity to their careers, but individuals who need the income cannot find replacement jobs (Turner). If this is anything like 30 years ago where “nearly half of the change in distress [was] due to labor market experiences and changes in job characteristics during [the] period that straddles the recession,” feelings of anxiety and depression should likely subside after this “furlough frenzy” has concluded (Tausig).
Sources:
Ortiz, Vikki. “Job Furlough: More employees in recent months are forced to take unpaid time off from work.” Chicago Tribune, 3 June 2009 .
Tahmincioglu, Eve. “Your Career: Furlough Frenzy- Effects on morale, productivity and adherence to labor laws uncertain.” MSNBC.Com, 1 June 2009 .
Kelley, Kevin J. “Furloughed Vermont Workers Get Unemployment Benefits, Too.” Seven Days: Vermont’s Independent Voice, 13 May 2009.
“British Airways asks for work without pay.” MSNBC.com, 17 June 2009. The Associated Press.
Turner, J. Blake. “Economic Context and the Health Effects of Unemployment.” Journal of Health and Social Behavior 36.3 (1995): 213-29.
Tausig, Mark, and Rudy Fenwick. “Recession and Well-Being.” Journal of Health and Social Behavior 40.1 (1999): 1-16.
Companies such as British Airways are asking workers to take “voluntary” unpaid time off, while other businesses have announced mandatory furloughs. Consulting firm Watson Wyatt reported that as of April 2009, 17 percent of 141 human resource executives said they were instituting mandatory unpaid vacation days. At Hewitt Associates, a survey showed that approximately 363 of 518 U.S. companies (70 percent) were considering or had instituted mandatory furloughs (Tahmincioglu). Chicago City Council is even awaiting a proposal that requires specific city employees to take mandatory unpaid vacation time (Ortiz).
What is most concerning about these policies though, is that many companies are asking employees to “volunteer” for unpaid vacation time. In reality though, is it really voluntary? Workers will either take furloughs, get fired, or quit. Because of the struggling economy and competitive job market, workers would rather have some sort of job security than be unemployed. If you were given the options of less income or no income, in all likelihood, you would choose the former over the latter. If I were given the option of a furlough, I would not WANT to take time off, but if it meant keeping my job, I would grudgingly submit. So when a company says that their employees volunteer to take time off without pay, is this really true?
Msnbc.com writer Eve Tahmincioglu has also suggested that extended furloughs could be unemployment in disguise. If an individual is let go after an extended furlough, the first day of furlough would turn translate into the date of firing. This person then would be eligible for 60 days of immediate income under the federal Worker Adjustment and Retraining Notification Act, assuming the company has over 100 employees (Tahmincioglu).
With increasing furloughs, the government is being forced to re-examine and redefine their unemployment policies. According to state legislation, when a furlough is mandated, individuals are often eligible for unemployment compensation. Brian Dixon pointed out that, “The general rule is if you’re laid off for more than one week, you can obtain unemployment” (Tahmincioglu). When Gannett Corp. required all 41,500 employees at the Burlington Free Press to take two, one- week long furloughs, only approximately 50 individuals collected unemployment benefits during this time, even though all were eligible (Kelley).
This “furlough frenzy” also creates a sense of confusion and instability—in essence, people do not know when they will be working, and in turn what their income will be. These changes can lead to dramatic health effects including depression, increased feelings of anxiety and stress and even obesity. A study conducted by Sentient Decision Science for First Command Financial Services revealed that in May 2009, over one-half of Americans (51%) had experienced some sort of mental or physical health issue as a result of the economy. In a study looking at the effects of the 1974-1975 recession on levels of distress and dissatisfaction, 20 percent of the change in levels of distress was due to changes in various job characteristics—in essence, increases in job demands and the increasing perceptions of inadequate pay contributed dramatically to individuals’ increased feelings of distress (Tausig).
Today, individuals are experiencing similar changes in job characteristics as they did 30 years ago. In a study conducted by Sentient Decision Science, it was found that 11 percent of individuals have experienced a decrease in their wages, while seven percent have been forced to work overtime without pay. Additionally, individuals are being proactive in an attempt to keep their job—47 percent of Americans reported making some change in their behavior at work like working extra hours (14%), trying to stay updated on current trends (13%) and increasing networking within one’s industry or company (12%).
According to Turner, the effects of unemployment or a furlough on stress and mental health are caused by one of two things—either financial loss or a declining sense of self-worth. Individuals who are of a lower economic status will suffer from the financial loss of income. Because these individuals rely on their job, in essence for survival, their levels of stress will increase when they do not have the means to support themselves. Turner argues that individuals of a higher economic status likely “attach a greater portion of their personal identities to their careers,” so they will suffer from their feeling of inadequacy. Because “individuals in professional and upper-level…occupations are far more likely to report that they would continue to work, even if they had no financial reason to do so,” without relying on their job for a sense of self-worth, levels of anxiety and stress will sky-rocket. In the first group, if reemployment is possible, feelings of depression and anxiety will likely be short-lived. Because these individuals rely on their job only for the income, once this has been reestablished, their stress from unemployment will be eliminated (Turner).
According to a First Command Financial Services study, conducted by Sentient Decision Science, four percent of Americans have been forced to take furloughs, while six percent have been laid-off. According to writers Tausig and Fenwick, “although the impact of unemployment was not inconsequential, job restructuring was the most substantial cause of declining well-being for [the] full time workers” (Tausig). Despite the difference of over 30 years, the current recession is not largely different from that of 1974/75 recession and individuals are being forced to deal with similar changes in job characteristics. Unfortunately, physical and emotional consequences are further heightened because of the lack of opportunities for reemployment. Therefore, not only are individuals suffering who attach their personal identity to their careers, but individuals who need the income cannot find replacement jobs (Turner). If this is anything like 30 years ago where “nearly half of the change in distress [was] due to labor market experiences and changes in job characteristics during [the] period that straddles the recession,” feelings of anxiety and depression should likely subside after this “furlough frenzy” has concluded (Tausig).
Sources:
Ortiz, Vikki. “Job Furlough: More employees in recent months are forced to take unpaid time off from work.” Chicago Tribune, 3 June 2009 .
Tahmincioglu, Eve. “Your Career: Furlough Frenzy- Effects on morale, productivity and adherence to labor laws uncertain.” MSNBC.Com, 1 June 2009 .
Kelley, Kevin J. “Furloughed Vermont Workers Get Unemployment Benefits, Too.” Seven Days: Vermont’s Independent Voice, 13 May 2009.
“British Airways asks for work without pay.” MSNBC.com, 17 June 2009. The Associated Press.
Turner, J. Blake. “Economic Context and the Health Effects of Unemployment.” Journal of Health and Social Behavior 36.3 (1995): 213-29.
Tausig, Mark, and Rudy Fenwick. “Recession and Well-Being.” Journal of Health and Social Behavior 40.1 (1999): 1-16.
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