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  D.F.'s Column Archive
February 1, 2006
No Way To Measure Pajama-Wearing Job Creators

Ford is eliminating 25,000 jobs. Kodak is cutting 12,000. Kraft Foods is slashing 8,000. Three companies, 45,000 jobs.


Whoa. So how much of a job-losing trend does this portend for the larger economy?


Well, 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.


That’s a 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?


Actually, 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.


Why don’t 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.


In the 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.


But the 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.


IBM didn’t 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 from IBM.


When Ford, 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.


And you can’t get any less flexible than must-pay-Bob-every-two-weeks-forever.


In all 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.


The massive 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.


The next 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 garage.

© 2006 North Star Writers Group. May not be republished without permission.


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