Evaluating the impact of layoffs at work for families
Work layoff has been common management practices, especially when the organization does not have enough finances to pay for the workers due to declined revenue collection. A layoff can be understood as a management practice that involves discharging staff of their duties. Organizations may decide to lay off their workers for many reasons, such as the need to reduce staff to lower costs on expenditure, takeover or merger of a company, work redundancy, and reduced revenue collection and market share. It is seen as a strategy to bypass tough economic times. According to a survey conducted by Lemieux (2020), more than 15% of Canada’s employed workforce has been dismissed from their jobs since the beginning of 2020. This was mainly attributed to the impact of the Coronavirus pandemic, as the number of organizations’ customers declined, leading to low revenue collection by the organizations. However, some organizations layoff their workers as a strategic move to gain a competitive advantage over their rival companies. A layoff of workers has psychological, emotional, and economic impacts on the affected employees and their families. This paper examines various pieces of literature to understand the impact of layoffs on families.
Literature review
At least 70% of people who work in organizations have parental responsibilities. These people are looked upon by their children and other family members to provide for the family’s needs. Studies also indicate that less than 20% of those in the formal labor industry have businesses that can subsidize their income. This implies that in case of layoffs, both the workers and the families are affected. Layoffs have been a common practice by organizations to cut down their costs and to position themselves in the industry strategically. When this happens, many people are significantly affected. Several scholars have conducted studies to investigate various impacts of layoffs on the families.
Brand and Simon Thomas (2014) conducted a study to establish how layoff affects families with a single parent. The study found that parents and their children feel depression mixed with sadness and anger shortly after learning about job dismissal. To some people, working provides meaning to life as it allows an individual to connect to other people and gain respect in society. Both the parents and the children are often left frustrated on the next step to take. This has been supported by another research study conducted by Higler (2016), which associated job loss with depression, anxiety, and loss of interest in life. The study established a large standard deviation in self-esteem among those who lost their jobs, which indicated a loss of self-esteem among dismissed workers. These negative emotions can significantly impact the mental wellbeing of the families. Aamodt (2010) associates unwarranted behavior and suicidal thoughts with stress and depression that result from job loss. The argument is that psychological stress and anxiety following job loss impacts an individual’s mental, resulting in suicidal thoughts and negative behaviors. Landy and Conte (2013) found that some victims of involuntary job termination tend to develop low self-esteem. They perceive themselves as worthless and begin to develop withdrawal behavior. The same feeling of worthlessness may also be held by the children who might see their educational career shuttered, which may further lead to depression.
Job loss affects the family relationship. A study conducted by Doiron and Mendolia (2012) found that job loss increases domestic conflict and the chances of divorce. This is because certain assumptions are made during divorce negotiations, including family income and the existing investment. Job loss that includes the males poses a higher significant impact on marriage because men are considered the primary earners. Their job dismissal is always accompanied by the most significant shock in the family (Persson & Rossin-Slater, 2018). The study established a more than 30% higher risk of divorce when men lose their jobs than women. The emotions that accompany job loss, such as depression, anxiety, anger, low self-esteem, and the shame of being shipped off from a job one likes, can shake up marriages and relationships with the family. Stress and anger of the layoff victims are responsible for their negative behavior towards people within their social circles. As a result, spousal negotiation is often affected and marred with constant quarrels among the spouses. However, there is little effect on the husband-wife relationship when the wife is the layoff victim (Doiron & Mendolia, 2012). Besides divorce, there is evidence showing the role of family role inversion after a layoff. In a typical society, people hold the belief that the primary role of women is to take care of the family. This role tends to shift when a man loses the job due to company layoffs while the woman still works; the role reverses (Komarovsky, 2004).
The layoff has a significant impact on children’s educational progress and physical development in the affected families (Higler, 2015). Children often look after their parents for financial and emotional support and provide them the necessary resources they need to pursue their life goals. When parents are unable to provide for the children’s needs, the children are often left frustrated, which can significantly impact their educational development. Studies show that jobless parents do not support their children in their homework; neither do they offer the right emotional support (Ruiz-Valenzuela, 2015; Hilger, 2014). Besides stress and depression following job loss, these parents are primarily focused on finding their next jobs. Another study by Deb et al. (2011) also indicates low dieting among families facing financial problems following job loss.
Victims from layoff reported severe health problems such as frequent migraine, heart trouble, sleeplessness, high blood pressure, loss of appetite, and stomach upsets (Landy & Conte, 2013). Luo and Thee-Brenan (2009) found out that 48% of the employees experience mental illness after losing their job, with at least 46% percent mentioning that they are ashamed of their new status of being unemployed after downsizing. These contributed to frequent hospitalization. Sometimes individuals resort to alcohol and drug intake to relieve themselves from the pressure and stress that comes with layoffs. This further increases the risk of acquiring other disorders such as asthma and mental illnesses. This stress is passed to the family members who will have to dedicate their time to the downsizing victim. Family members have to put on hold typical goal setting and decisions as the number of decisions to be made limited due to financial constraints (Landy & Conte, 2013). Besides, some employers provide medical covers as part of employee work benefits. When one loses his job, he also loses the benefits that come with the job. According to Fieldman (2003), parents who include their children under their medical cover provided by the employers as part of benefits lose with job loss. With the rising cost of health in the United States, job loss can significantly impact the families’ health covered under health benefits provided by employers.
Conclusion
Every year, thousands of Americans in the labor market becomes victims of employee downsizing. Even though layoff is one of the strategies adopted by corporate organizations to bypass tough economic times, the practice has a lot of negative impact on the victims and their families. The pieces of evidence examined in this paper indicate the emotional and mental impact of layoffs on families. It affects both parents and children alike. Stress and depression are common disorders that come with job loss. There are also issues such as management of children’s educational and health needs and maintaining family relationships. When employees are mentally affected and cannot support their children’s educational needs, they lose essential talents. Managers should resort to other strategies, such as cutting down wages to reduce such adverse impacts.
References
Aamodt, M. G. (2010). Industrial/organizational psychology: An applied approach (6th ed.). Belmont, CA: Wadsworth.
Brand, J. E., & Simon Thomas, J. (2014). Job displacement among single mothers: Effects on children’s outcomes in young adulthood. American Journal of Sociology, 119(4), 955-1001.
Carrington, L. (2016). A qualitative phenomenological study of employee perceptions of the impact of layoffs.
Deb, P., Gallo, W. T., Ayyagari, P., Fletcher, J. M., & Sindelar, J. L. (2011). The effect of job loss on overweight and drinking. Journal of health economics, 30(2), 317-327.
Doiron, D., & Mendolia, S. (2012). The impact of job loss on family dissolution. Journal of Population Economics, 25(1), 367-398.
Feldman, D. C. (2003). The impact of layoffs on family, friendship, and community networks. Resizing the organization. Managing layoffs, divestitures and closings, 188-219.
Hilger, N. G. (2012). How does family income affect college enrollment? Evidence from timing of parental layoffs. Working paper, Harvard University.
Hilger, N. G. (2016). Parental job loss and children’s long-term outcomes: evidence from 7 million fathers’ layoffs. American Economic Journal: Applied Economics, 8(3), 247-83.
Landy, F. J. & Conte, J. M. (2013). Work in the 21st century: An introduction to industrial and organizational psychology (4th ed.). Hoboken, NJ: Wiley.
Lemieux, T., Milligan, K., Schirle, T., & Skuterud, M. (2020). Initial impacts of the COVID-19 pandemic on the Canadian labour market. Canadian Public Policy, 46(S1), S55-S65.
Luo, M., & Thee-Brenan, M. (2009). Poll reveals trauma of joblessness in US. New York Times, A1.
Noer, D. M. (2009). Healing the wounds: Overcoming the trauma of layoffs and revitalizing downsized organizations. John Wiley and Sons.
Persson, P., & Rossin-Slater, M. (2018). Family ruptures, stress, and the mental health of the next generation. American economic review, 108(4-5), 1214-52.
Ramlall, S. J., Al-Sabaan, S., & Magbool, S. (2014). Layoffs, coping, and commitment: Impact of layoffs on employees and strategies used in coping with layoffs. Journal of Management and Strategy, 5(2), 25-30.