February 1, 2006
No Way To Measure
Pajama-Wearing Job Creators
eliminating 25,000 jobs. Kodak is cutting 12,000. Kraft Foods is
slashing 8,000. Three companies, 45,000 jobs.
how much of a job-losing trend does this portend for the larger economy?
that’s a funny thing. The job report in December shows that the economy
created a disappointing 100,000 new jobs. Yes, that’s 100,000
more jobs than there were in November. Even as the biggest companies get
the biggest headlines with the most dramatic mass layoffs, the overall
economy is creating so many new jobs that we get cranky when we only
see 100,000 in a month.
bad month. In November, the economy created 305,000 jobs. There are only
7.5 million unemployed people in the entire work force. At this rate,
we’ll run out people to take all the jobs before George W. Bush leaves
the White House.
So why the
disparity between the headlines we keep seeing (“Very Big Corporation of
America Slashes 39,000 Jobs!”) and the actual trends borne out by the
statistics? Is it media bias? The dastardly press out to paint
all of American life as one big skinny dip in a lagoon of boiling acid?
that’s not really the story in this case. If there’s a media bias at
play here, it is more the bias in favor of covering big things. Big
companies. Big trends. Big launches. Big numbers. And there’s nothing
big about the people creating these new jobs. They’re guys in their
garages, designing custom software and teddy bears in edible underwear.
They’re shipping orders via UPS. They’re filing their taxes quarterly
and taking their own customer service calls. They’re creating their own
jobs, and maybe a job or two for some other people as well.
you read about them? Because by themselves, they’re not news. They’re
just guys in their garages. Some of them probably work in their pajamas,
and that wouldn’t look pretty on the business page. But they’re creating
jobs, and lots of them. And some of them are getting money for new
pajamas from the very same companies that are laying people off – maybe
even laying them off.
early 1990s, I was working as a business reporter and was assigned to do
a story about the shambles that had become the lives of various people
who lost their jobs in the big IBM downsizing of that period.
first few people I interviewed about their departure from Big Blue (see?
“big” again!) essentially told me, “We don’t care.” Why? Because, in
essence, they weren’t going anywhere. IBM had removed them from the
payroll and stopped paying their benefits, but had turned right around
and given them all consulting contracts. Pretty good contracts, too.
Enough that they could replace their salaries, cover their own health
insurance and still have time left over to service other clients.
really want these guys gone. It just wanted to decide anew every day
whether to give them money or not. And that was OK with the guys,
because they got to be their own bosses and still get plenty of money
Kodak and Kraft eliminate 45,000 jobs, that doesn’t mean they necessarily
plan to make fewer cars, cameras or chunks of Velveeta (although less of the
latter would not hurt anyone). It probably just means they want more
flexibility in how they will spend the resources that give them the
people that allow them to make the things.
can’t get any less flexible than must-pay-Bob-every-two-weeks-forever.
likelihood, the job creation picture is even more encouraging than the
labor statistics indicate. The Bureau of Labor Statistics only reports
on payrolls. But Peter the Pajama-wearing software designer isn’t on a
payroll. He invoices clients, collects fees and files quarterly. He’s
making a perfectly good living, but since he’s not on a payroll, the BLS
doesn’t count him.
layoffs by the massive companies are news, and they should be, but not
because they portend the end of the economic world. They are part of a
transition from an economy based on the big and secure to the small,
agile, risk-tolerant and pajama-modeling.
time you need help with something technical and you call customer
service, you may – without even knowing it – get the owner of the
company on the line. You probably don’t care to know, as long as he
takes care of you. As for what he’s wearing, you really don’t
want to know that. Just be glad he doesn’t have a web cam in that
© 2006 North Star
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