Old Man Cap

It seems to me that lots of people I know are either getting laid off or are in a death march of some sort. Whatever happened to the happy middle where people worked regular hours and weren’t punished for it? This is likely due to the crowd and industry I’m surrounded by but even people from back home I know are having trouble with their workload, whether it’s a lack of or an excess of.

This recession has, no doubt, been hard on businesses across the spectrum. That being said, it’s being used an opportunity to shock workers into accepting marginally higher levels of productivity and a lowering of wages across the board. Businesses everywhere are telling their workers that times are tough, they’re tightening their belts, and expecting more out of their workers.

The increase in productivity from workers during this time is short term at best as they put in more hours as they essentially fear for their job. While this is making them do more, it’s not necessarily improving the quality of their work. If people are spending their time worrying about their job security, they’re not spending their time producing better work, being creative, or taking risks.

There is a theory in psychology titled Maslow’s heirarchy of needs. It contends that there are different levels of needs that all humans have and that higher levels of needs can not be met until lower levels are met successfully. Below is an image (from Ambrand.com) that shows these different levels.

The most productive, creative, and effective people are those that have all of their lower level needs met so they can concentrate on the highest level, essentially being all that they can be. Once one of the lower levels’ needs is not being met, all of their concentration and thought revert to that lower level and making sure it’s being met so they can return to the higher planes of thought. People constantly reprioritize upwards and downwards the scale based on the satisfaction of these needs.

Companies that put the fear of layoffs into their employees (on purpose or indirectly by laying other workers off) scare and stress people into their safety level of need as they fear for their financial security. The added stress does not produce great work and also can cause health problems over time, lowering them down another notch. Companies in a stable position would likely do better at getting more for their labor dollar if they spent the time supporting the workers and making them feel like their job is the calm oasis in this sea of worry.

Now, onto the next part of the puzzle, lowered wages. The lowered demand of workers has driven unemployment up, that’s obvious, as well as driven wages lower. The higher amount of available workers has increased competition for available jobs. This essentially drives the amount down that employers are willing to pay as they have a larger pool of workers to draw from. After all, a lower paying job is better than no job at all. The externality of this is that workers who do have their jobs are willing to take pay cuts to keep their jobs, are far less likely to ask for the amount of money that they’re likely worth, and are less willing to search for potentially better work, in pay and/or quality.

What we’re left with is people who are performing worse for less money, the double whammy of lower productivity coupled with lower demand for labor. If you really want to succeed in this market, concentrate instead on making sure your workers are operating at the top of their heirarchy, not the bottom.

Latest plan for the large economic stimulus plan began circulation today. Lots of great stuff in here and (sort of) details included as well.

Looks like a heavy dose of what the country needs structurally to be able to maybe succeed and not fall apart. I’m generally happy with it. Check it after the jump.

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Today, Census Bureau data came out detailing the year-on-year changes in retails spending. It was the worst year they have on record, a real decline of over 11% in retail sales nationwide in 2008.
Calculated Risk: Retail Sales Collapse in December

So, I blogged awhile ago that we were entering just the eye of the storm and we’d have another hard rocky time ahead of us. That rocky time begins now. The initial part of the recession was due to the bubbles bursting, financial and housing. Those bubbles kicked in and are starting to drag down the rest of the economy now. As victims of the above bubbles, everyone has tightened how they spend money (and actually save it instead - can you imagine?!). Not only retailers but especially lenders and creditors. No one is spending money any more, or is able to get money in the first place. As more and more jobs are lost as a result of Part 1, this will go even further and drag us down quite a bit to the full extent of this recession (potentially even depression [classified as a -10% change in GDP]).

While the market realized this was going on, it never really quite sinks in until official data comes out (albeit too late). Today, and even last week with its unemployment numbers, are the signals of Part 2 of this recession. Let’s see how far it drops. During then, keep safe.

I feel a countdown is appropriate.
8 days left until that mockery of the presidency is out of office. 8 more days to potentially screw more things up in an attempt to create some sort of legacy.
It’ll be a very anxious 8 days.

Some details, thanks to CR.

The Job Impact of American Recovery and Reinvestment Plan

Daily Camera: Former FEMA director among evacuated

What would have been better is if his home was both flooded and surrounded by fire. Like a huge moat and inside the moat, a ring of fire, and then his house inside, not on fire. Oh yeah, and he had a couple other thousand Bushies waiting inside his house. Yup.

Then wait a few days. Yup.

Then hear something about how everything is doing fine. Yup

Wait a couple more days. Yup.

Now once the fire is out, someone comes to help.

Wonkette: Roland Burris Tells Media Roland Burris is Awesome

This guy is so ridiculous. THE MAGIC MAN

via Wulff Morgenthaler

Actions for Restoring America: Transition Recommendations for President-Elect Barack Obama

On Change.gov, the transition administration is inviting people to propose recommendations for the transition period and at the above link is a fantastic (& long) series of things that need to happen. I’m not going to start being proud of our nation until most of these get underway. Things like ceasing torture, restoring privacy, protester protections, etc… We could look at our Constitution and our current government and marvel at the effective implementation of the Constitution. Our current government and movement away from some of our core principles as a nation are travesty. If you think you are truly free right now. You are not. You are only comfortable. Please read the above and forward it along. Being an American is a state of mind. It is not a birth right.

It’s about time that this has been officially stated. For those who have been thinking that the economy has been sucking since before August, you were right!

NBER: Determination of the December 2007 Peak in Economic Activity

This also begins to explain why foreclosures starting happening en masse at the beginning of last year and it bringing the recession out in force.