COVER

Hunkering down

A majority of us consider layoffs a ‘prudent’ move

KATHERINE MACKLEM December 31 2001
COVER

Hunkering down

A majority of us consider layoffs a ‘prudent’ move

KATHERINE MACKLEM December 31 2001

Hunkering down

A majority of us consider layoffs a ‘prudent’ move

KATHERINE MACKLEM

Asked how many times he’s been laid off, Lyle Olson starts counting out loud. “One, two, three—three times. And I’ve been on job-share another three times,” says the 45-year-old welder from Edam, Sask. He has lost holiday pay on two more occasions from companies that were close to bankruptcy, and he once quit a job rather than bounce out a friend who was about to be laid off. “I’ve taken a beat-

ing,” he says. Olson, who works in the notoriously cyclical oilpatch, fears he may soon be laid off for a fourth time. Overtime shifts have been cancelled and the crew he works on—already a third of its former size—was sent home a week early for the holidays. “Yes,” he says, with surprisingly little rancour, “lam threatened.” There’s not even a sigh. It’s just the way it is. Layoffs are a part of life. Business is driven by the ups and downs of the economy—and the labour force follows ex-

actly the same track, says Olson, who with his wife, Sharon, has four children aged 11 to 19, and cares for three foster kids. What’s more, he says, companies that let employees go are usually doing the right thing: “There comes a point when you have to lay off.”

In that view, he has a surprising amount of company. Asked in the Macleans/CBC News year-end poll if they think layoffs are prudent and necessary, or irresponsible and shortsighted, a majority of respondents (53 per cent) say prudent. Even among those who worry they may lose their jobs—particularly in the 18to 24year-old crowd—the number of people who say cuts are prudent is higher than the number who call them irresponsible. Allan Gregg, chairman of the polling firm The Strategic Counsel, expected respondents to take the opportunity with this question to pillory the corporate world. Instead, he’s “astounded” by the strong pro-business response.

IN TRYING TIMES

Taking care of business

Q: When businesses lay off staff because of falling demand for goods or services, do you see that as... ?

A tough year

Two questions repeated from last year reveal a gloomier outlook among Canadians

Q: Are you more optimistic or more pessimistic about the future than you were a decade ago?

Q: Are you more or less confident about your ability to look after your own economic interests compared with a few years ago?

Workplace uncertainty

Percentage concerned that they or someone in their household will soon lose their jobs: 42

The economy is souring. And with it, so is the mood of Canadians. During the past year, we’ve become increasingly pessimistic and lost confidence in our ability to manage our economic future. For the past three years—years marked, for the most part, by growth—concerns about health care and education have eclipsed economic worries as the most important issues facing Canada. But the tide has turned. While only one in 10 respondents cited the economy as the most significant issue in 2000, this year it’s one in four. Health care and education still top the list, but with just two-thirds of last year’s support.

People are heading into the coming recession “eyes wide open,” says economist Judith Maxwell, president of the Canadian Policy Research Networks. Canadians now understand much more than ever that the economy operates in cycles—a lesson driven home during the painful recessions of the early ’80s and ’90s. “If I think back to the 1970s,” Maxwell says, “we had this sense of immunity. We thought we’d beaten the business cycle.”

Of course we were wrong. Today, three out of five Canadians know the economy is heading into a recession. Women, typically the more cautious gender, feel it more strongly than men—63 per cent versus 54 per cent. Clouds loom on the horizon, and a disturbing discord emerges: even though things feel better now, we fear they will get worse. While more of us say our personal financial situation is better than it was 10 years ago, we’re less confident than ever in the past decade that, as individuals, we can take care of our economic interests.

Yet we feel we have nowhere else to turn to do that job. Canadians in strikingly high numbers—at 81 per cent—look primarily to themselves to take care of their economic interests. Just three years ago, we expected business and government to play larger roles, although even then a solid 71 per cent of Canadians depended on themselves. We’re simply being realistic now, Gregg says. “For 20 years, we’ve been told that government is slothful and inefficient,” he adds. “And we’ve been told that business has got to go with the dictates of the marketplace. People are saying, ‘That’s just the way it is.’ ”

We’re being reasonable—and accepting of things that have a significant impact on our lives but are seemingly out of our control. There is no lambasting of the powers that be—those politicians and business leaders who in previous decades were seen

to be manhandling the controls of destiny. Even labour is onside. “Workers accept layoffs as a reality,” says long-standing labour leader Bob White, now president emeritus of the Canadian Fabour Congress. “Militancy was never determined by fighting against layoffs. It was always trying to minimize the impact of layoffs.” Workers are concerned about what happens to them and their families in a downturn, he adds, but they understand it. That, however, “doesn’t mean they like it.”

Blair Byrne is among the 38 per cent who consider layoffs in a shrinking market to be irresponsible and shortsighted. The spinoff effects of downsizing are unacceptable, says the 53-year-old, semi-retired Victoria resident. “You’re not gaining anything,” he says. “You’re putting more people into lower income groups and on welfare.” Byrne, who made a living driving taxis, buses and trucks, is troubled by severe arthritis. He and his wife run a small handicapped-care facility in their home. Years ago, he says, he thought many workplaces were overstaffed. But he has changed his mind, and now believes that “to just go and lay off everybody because the economy has taken a downturn is not the answer.”

Recent weeks have brought tidbits of positive economic news: the markets turning back up, consumer spending encouraged by the lowest interest rates in 40 years. But Ottawa economist Michael McCracken cautions against taking too much comfort. “Is what we’re seeing now the dead-cat bounce?” he asks, evoking the image of a market and economy currently incapable of real recovery.

Canada, McCracken says, is in a dangerous situation because the economy is still drifting downward. A rising unemployment rate, regardless of the low level it is moving away from, makes consumers apprehensive. As well, his studies show that Canadians’ disposable income—the amount of money households have to spend and save after taxes—is “beginning to show rough edges.” Only in 2000 did that key economic measure of consumer spending recover from two decades of taking a beating, finally regaining the level it was at in 1981. But the surge may be shortlived. “I am concerned,” McCracken says, “that we’re going back into a period of weakness. I don’t see any turnaround happening through some magical tool.” Or any reason for the majority of us to change our minds about the tough times ahead. G3