Earn What You Spend

From the WSJ:

Meanwhile, the number of U.S. workers filing new claims for state unemployment benefits soared last week to match the quarter-century high reached in December, suggesting layoffs continued unabated into the new year.

Initial claims for jobless benefits jumped 62,000 to 589,000 after seasonal adjustments in the week ended Jan. 17, the Labor Department said in a weekly report Thursday. That matches the highest level since November 1982, when claims were above 600,000. Claims were also at 589,000 in the Dec. 20, 2008 week.

This retrenchment is continuing unabated in virtually every sector and section of the country.  What I find interesting about these numbers is that a number of these firms did not immediately need to layoff their workers.  Rather, they are taking precautionary measures as we go deeper into this recession.  The key to surviving a recession like this is having the liquidity to come through, and trimming payroll is one of the quickest, most effective ways to balance a business’ cash flow.  

But is that the wisest decision?  Not necessarily.  A common story I’m hearing these days is that the average worker is doing all the work they used to do, plus that of two or three laid-off workers - and all of this for less pay.  Work quality consequentially suffers.  Your customers or clients are less likely to spend money on your services or products if they feel like the quality is going down.  It’s a vicious cycle - now, more than ever, is the time to make your company indispensable.