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Laying Off Workers During Economic Downturns

When an individual accepts an offer of employment from a company, there is an implicit contract involved: the employee agrees to perform services for the employer at an agreed-upon pay rate. So long as the employee performs to the standards of the employer, the employee can expect to continue working. When companies begin suffering economic losses, however, resources are trimmed. Since human resources often represent the largest investment a company has, American companies tend to cut jobs in order to save money. The result is that workers who have otherwise been performing their jobs well can find themselves out of work. If the layoff occurs during a recession, new work can be difficult to obtain. Some companies have policies which make layoffs a last resort alternative, but even some of these reconsidered that strategy during the recession of the early 1990s. This research examines job security in the American workplace, compares it to job security in Japan, and considers the economic ramifications of job security on the employee and the employer.

Job security can be broadly defined as affecting all aspects of the workplace. For example, Labor Secretary Lynn Martin included in her definition of job security the ability to move upward in a company's organization, the safety of the workplace from industrial accidents, the removal of sexual harassment, the removal of discrimination, and the general improvement of the skills of the American workforce (Overman, December 1991, pp. 37-38). While it is true that each of these factors could individually cause an employee to be laid off, job security as examined in this research refers to the policy of laying off workers during economic downturns.

When a company is faced with declining revenues, it can reverse the trend through two methods: increase revenues or decrease costs. Most companies try to achieve both results. Since payroll costs are typically one of the highest co...

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Laying Off Workers During Economic Downturns. (1969, December 31). In LotsofEssays.com. Retrieved 15:06, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1690782.html