US labour expert says economy will worsen if layoffs are used to curb company losses

Champaign (Illinois, US), Nov.25 : The dean of the School of Labour and Employment Relations at the University of Illinois in Champaign, Illinois, has warned that widespread layoffs could deepen the looming recession.

Labour expert Joel Cutcher-Gershenfeld says in the first of a series of commentaries on labor and the crippled economy; that employers need to provide a softer landing for both workers and the economy through programs ranging from severance packages to retraining benefits.

"We're not asking businesses to do this out of charity. There are ways to approach layoffs that maintain options with the displaced workers, deepen loyalty with remaining workers, give meaning to stated corporate values, and help avoid an accelerated collapse in the economy," Cutcher-Gershenfeld says.

"Instead of knee-jerk, across-the-board job cuts that will have a contagion effect on the economy, respond with programs that mitigate the harm to workers, while leaving businesses and society better situated to recover when there is an upturn," he adds.

Alone, each company's decision to scale back workers makes sense in a sour economy, Cutcher-Gershenfeld said, but collectively, a flurry of layoffs will accelerate a downward spiral if employees are simply cut loose.

"I think what's at stake is a slow, lingering, deep recession versus a somewhat faster, somewhat less deep recession. You'll be able to gauge it in human lives," he said.

Employers also can help workers and minimize economic damage through separation payments, extended health-care benefits, investing in start-up businesses launched by displaced workers and a host of other workforce-friendly programs.

He said a proactive approach to layoffs is good for workers who remain, as well as for those who were cut loose and for the overall economy.

More than 1.2 million Americans have lost their jobs this year, and Cutcher-Gershenfeld fears even more lost jobs ahead with the nation's economy caught in a downward spiral that has crushed consumer confidence.

ANI