Resizing The Organization 22 potx

Consequences For spouses Deterioration of marriage for example, divorce, separation Decreases in standard of living for example, loss in income, decreases in spending Changes in labor fo

I MPACT OF L AYOFFS ON F AMILY , F RIENDSHIP , AND C OMMUNITY N ETWORKS 191

Table 9.1 Consequence of Layoffs to Outsiders.

Consequences

For spouses

Deterioration of marriage (for example, divorce, separation) Decreases in standard of living (for example, loss in income, decreases in spending)

Changes in labor force participation (for example, start work, increase work hours)

Geographical mobility (for example, to find new job or cheaper community)

For children

Difficulty concentrating in school and lower academic performance Exposure to negative information about work and a decreased work ethic

Increased social problems with peers (for example, hostility and withdrawal)

Decreases in economic well-being (for example, increased work hours, decreased college attendance)

For friends

Negative changes in affect and mood of the relationship Decreased financial resources with which to pursue leisure activities Decreased contact and intimacy of friendships

For communities

Increases in local unemployment rates Loss of community tax revenues Declines in real estate values Decreases in corporate citizenship behavior

Team-Fly®

current wages of the other spouse and current savings, loss of work can mean depletion of savings and dramatic decreases in the stan-dard of living Particularly when layoffs are widespread in a com-munity, layoffs can lead to bankruptcy, home foreclosures, and tremendous scaling back of expenditures Although the most dra-matic of these negative consequences (bankruptcy and home fore-closure) typically occur in less than 10 percent of households, that figure is not negligible (Leana & Feldman, 1992)

Not surprisingly, the layoff of one partner increases the need for the other spouse to start working, work longer hours, or take

on a second job Particularly if the laid-off spouse is the major breadwinner, the other spouse may have to increase his or her labor force participation to make ends meet (Hochschild, 1989, 1997)

Although the increases in spouses’ labor force participation rates have received the most attention in the unemployment liter-ature, less research has been conducted on spouses’ loss of valued activities as child care providers and homemakers Newman (1993) found, for instance, that many wives of laid-off workers genuinely enjoyed their roles as mothers and homemakers For them, having

to work outside the home was not only a matter of taking jobs in which they had little interest, but also a matter of losing time for roles they cared for deeply

Changes in Family Dynamics

When spouses of laid-off employees are forced back into the labor market or into increased hours of work, they start contributing a greater proportion of the earnings to the family and hence feel en-titled to more power in how that money was spent This often shifts the dynamics of power in the family, particularly in families where the husbands had been the major decision makers about family fi-nances Women gain more power in how decisions are made in the family, and that power largely sustains itself even after spouses be-came reemployed (Goode, 1994)

Another dynamic that can occur in the aftermath of layoffs is resentment about the sharing of household duties As women take

up the slack in terms of earning money outside the household, they often hope that their husbands will take up the slack in terms

of household chores and child rearing—and are frequently

disap-pointed in the amount and quality of effort their husbands make

in return Thus, newly employed or increasingly employed women perceive they are working a “second shift” when their husbands are barely working one (Hochschild, 1989)

Need to Relocate Geographically

Another negative consequence many spouses experience as the re-sult of their partners’ layoffs is the need to relocate geographically

In some cases, couples have to move to get new employment; where layoffs are widespread in any given community, moving ge-ographically may be one of the few ways out of the predicament of unemployment (Brett, Stroh, & Reilly, 1993; Leana & Feldman, 1995a, 1995b; Stroh, 1999) In other cases, couples may move to different communities because the cost of living there is lower For example, it is not unusual to see out-migration from large urban areas experiencing high unemployment rates to more rural areas, where the costs of housing are much cheaper (Feldman & Bolino, 1998)

Such movement may be economically rational, but it can often

be psychologically traumatic Particularly for couples who have spent their entire lives in one community or whose extended fam-ilies live in that community, moving far away for employment op-portunities is a wrenching experience Couples such as these are moving away from their social support networks at exactly the time when they need them the most (Eby, Allen, & Douthitt, 1999) Thus, while the duration of the marriage may not directly suffer in the aftermath of layoffs, the quality of the marriage relationship may indeed deteriorate

Moderating Factors

Not every spouse will experience all of the disruptions identified, and not every spouse will experience those disruptions with the same intensity and sense of deprivation Surprisingly little research has been conducted on moderating factors in the reactions of out-siders to downsizing; what research has been conducted in this area has focused almost exclusively on the reactions of survivors (the coworkers of laid-off employees) (Brockner, 1990) We consider factors that we believe are likely to have an impact on the degree

to which spouses of laid-off employees experience these reactions (see Table 9.2):

• Percentage of family income earned by the laid-off employee

• Salience of the breadwinner role to the laid-off employee

• Number of dependent children in the family

• Life stage of the spouse

• Personality characteristics of the spouse

Table 9.2 Moderating Factors on Reactions

to Organizational Restructuring.

Moderating Factors

For spouses

Percentage of family income earned by the laid-off employee

Salience of the family breadwinner role status to laid-off employee Number of dependent children in the family

Life stage of spouse

Personality traits of spouse

For children

Age of the child

Degree of disruption to daily routines

Community wealth (for example, local unemployment rates)

Quantity and quality of part-time work experiences

For friends

Basis of friendship (for example, work versus nonwork)

Length of friendship

Level of community affluence

For communities

Diversity of the local economy

Physical distance to communities with greater employment

opportunities

Degree of state and federal governmental assistance

Community redevelopment efforts on the part of local business leaders

Percentage of Family Income Earned by Laid-Off Employee

The amount of disruption to the spouse is likely to be moderated

by the percentage of family income earned by the laid-off em-ployee When the laid-off employee is the sole wage earner, the dis-ruption will be greatest In contrast, when the laid-off employee is

a “trailing spouse” or makes substantially less than 50 percent of the family income, the disruption caused to spouses by layoffs is likely to be much more muted (Eby et al., 1999)

Salience of the Breadwinner Role to the Laid-Off Employee

Recent research suggests that the amount of disruption that laid-off employees experience in unemployment may be partially due

to the salience of the breadwinner role to them When laid-off em-ployees keenly feel their responsibility to be the major breadwin-ners in the family, the loss of unemployment is crushing financially and emotionally (Eby et al., 1999)

In contrast, when the laid-off employee does not highly iden-tify with the role of major family breadwinner, job loss results in much less depression, anxiety, and frustration In turn, the spouse

is likely to suffer fewer negative spin-off effects as well When the salience of the breadwinner role status to the laid-off employee is low, the negative emotional consequences for the spouse will be tempered, too

Number of Dependent Children

The number of dependent children in the household may mod-erate the relationship between unemployment of one spouse and negative outcomes for the other For example, when an unem-ployed worker has several children under age eighteen still living

at home (particularly children not yet in high school), a spouse who is forced into more hours of work is likely to suffer the great-est sense of deprivation Younger children need more parental su-pervision and more emotional support, and after-school day care arrangements and backup plans have to be made

When a laid-off worker has only one or two children, the dis-ruption to the spouse may be lower Fewer children mean less fi-nancial drain on family fifi-nancial resources and less difficulty in arranging for day care and after-school activities as well Although this question has not yet been directly addressed, it may be the age

of the youngest child rather than the number of children that

makes the most difference here A very young child may make even part-time employment for the spouse much more difficult to ob-tain and to susob-tain

Life Stage of Spouse

Previous research on layoffs suggests that the life stage of an em-ployee influences how negatively he or she responds to unemploy-ment and how quickly he or she bounces back (Leana & Feldman,

1992, 1995a, 1995b) In general, that research suggests that mid-career employees and those in middle age experience layoffs most negatively and take longer to get reemployed They often perceive themselves as too old to get retrained and too young to consider retirement Moreover, they often experience age bias in getting reemployed in comparable jobs (Feldman & Leana, 2000) Here, we suggest that the life stage of spouses may also influence the extent to which they experience negative spin-off effects from their partners’ layoffs Specifically, middle-aged spouses are likely to experience the layoffs of their partners most severely Middle-aged spouses (especially those who have been out of the workforce for twenty years) may not have sufficient skills, or sufficiently updated skills, to obtain well-paying jobs easily (Newman, 1993) In contrast, younger spouses have more energy and flexibility to start (or restart) their careers, while older spouses may need to work only part-time for a few years until their partners become eligible for pension or social security benefits (Feldman, 2000; Feldman & Turnley, 2001)

Personality Characteristics

There is some evidence that personality traits may work to mitigate the negative consequences of layoffs on spouses For instance, “har-diness” refers to the ability of individuals to overcome barriers to goals and persevere in the face of adversity (Kobasa, 1979) Those who are psychologically hardy are more likely to be able to main-tain their equanimity in the face of major stressful life events such

as job loss (Leana & Feldman, 1992) The work of Barrick and Mount (1991) suggests that some of the “Big 5” personality traits (extraversion, agreeableness, openness to experience, neuroticism, and conscientiousness) may also help temper negative reactions

to spousal unemployment For example, openness to experience and agreeableness are related to positive attitudes toward job

searching, and extraversion and conscientiousness are related to success in landing job offers (Boudreau, Boswell, Judge, & Bretz, 2001; Bretz, Boudreau, & Judge, 1994)

Impact of Unemployment on Children

Recent research by Barling and his colleagues (Barling, Dupre, & Hepburn, 1998; Barling, Rogers, & Kelloway, 1995; Barling, Zacharatos, & Hepburn, 1999) suggests that children are more cognizant of the employment problems that their parents face than their parents realize and that layoffs create a distinct set of nega-tive consequences for children too (see Table 9.1)

Consequences of Layoffs for Children

There are four important consequences that downsizing can have

on children of laid-off employees:

• Difficulty concentrating on studying and lower academic performance

• Exposure to more negative information about work and a decreased work ethic

• Increased social problems with peers (hostility, withdrawal)

• Decreases in economic well-being, resulting in either

increased work hours while still a student or lower enrollment rates in college

Poorer Academic Performance

Layoffs of parents can result in lower academic performance (as assessed by grades) for at least two key reasons First, layoffs can re-quire students to engage in more hours of part-time work, which detracts from their level of school achievement (Barling et al., 1995; Greenberger & Steinberg, 1986) Second, job loss can lead

to more friction in the household, making it more difficult for stu-dents to concentrate and focus on their school work (Loughlin & Barling, 1998; Steinberg, Fegley, & Dornbusch, 1993)

Decreased Work Ethic

Another negative consequence of layoffs for children is a decline in their work ethic For example, children may identify highly with the parent who loses a job and may feel a sense of injustice vicariously

As a result, those children may lower their own levels of aspiration, since they now perceive the connection between hard work and job security to be much more tenuous (Loughlin & Barling, 1998; Shanahan, Finch, Mortimer, & Ryu, 1991) In general, it appears that teenagers are most negatively affected by their parents’ job loss in terms of aspiration levels; teenagers are highly impression-able, and individuals typically form their work values and career aspirations during this time period (Goffredson, 1981; Krosnick & Alwin, 1989; Loughlin & Barling, 1998)

Increased Social Problems with Peers

Another unfortunate negative spin-off effect of layoffs is a decrease

in the quality of children’s relationships with friends and peers Particularly in small communities and particularly among teen-agers, layoffs and job loss may become widely known throughout

a child’s friendship and school networks Sometimes experiencing shame and embarrassment vicariously through their parents, chil-dren of laid-off workers become more withdrawn and uncommu-nicative with their friends (Barling et al., 1999) In addition, teenagers may provoke fights with their friends as a means of jus-tifying their distancing themselves from their peer group (New-man, 1988, 1993)

Decreases in Economic Well-Being

The most palpable negative consequence of layoffs for children is

a decrease in economic well-being At the most superficial level, layoffs often require families to cut back on vacations and toys For teenagers, parental unemployment can mean decreases in the amount of discretionary spending on clothing, eating out, movies, mall shopping, and recreation

Parental unemployment often results in increased pressure on teenagers to start working part time or to increase the number of hours they already work (Stern, Stone, Hopkins, & McMillion (1990), and increased work hours can result in lower levels of aca-demic achievement in school Although there is little evidence that working as a teenager is linked to delinquency (Gottfredson, 1985), there is also little evidence that working as a teenager sys-tematically builds character either (Stern et al., 1990) Although some percentage of a teenager’s income does go, directly or

indi-rectly, into supporting the nuclear family, a large percentage of teenagers’ income is used to support discretionary purchases, such

as telephones, cars, and entertainment, for themselves (Green-berger & Steinberg, 1986)

National data indicate that teenaged children from families with less family income are less likely to enroll in college or con-tinue on to graduate school Of teenagers whose parents’ income was less than $20,000, only 37 percent completed a bachelor’s de-gree within five years of high school graduation In contrast, 61 percent of children from families with incomes of $60,000 or more completed a bachelor’s degree within the same time frame (Na-tional Center for Education Statistics, 1998) It appears, then, that wealthier parents not only raise their children’s aspiration levels, but also are more likely to pay for their children to go to college

on a full-time basis

Moderating Factors

Not every child of laid-off parents experiences all of these negative consequences of downsizing, nor does every child experience these negative consequences with the same intensity Little empirical re-search has been conducted on potential moderating variables Based on research in allied areas, we consider four factors that are likely to exacerbate (or mitigate) the negative fallout that down-sizing has for children of laid-off workers (see Table 9.2):

• Age of the child

• Degree of disruption to daily routines

• Community wealth (for example, local unemployment rates or importance of affluence to status with peers)

• Quantity and quality of their own part-time work experiences

Age at Time of Layoff

In general, the effects of layoffs appear to be stronger on older children and teenagers than they are on young children Older chil-dren are more likely to understand the employment problems that their parents are discussing and are more likely to be asked to cut back their spending or increase their work hours In addition, older children and teenagers are more likely than their younger

siblings to suffer awkwardness with peers and teachers, since older children are more aware of what goes on in families other than their own (Harvey, 1999; Kokko & Pulkkinen, 2000)

Degree of Disruption to Daily Routines

Analogous to the discussion of spouses, how much children are ad-versely affected by layoffs will be exacerbated, or lessened, by the amount of disruption to daily routines that their parents’ layoffs cause For children from one-parent households whose sole wage earner is unemployed, the degree of disruption of daily routines

is likely to be immense, particularly if unemployment continues for several months or more and the family is forced to relocate ge-ographically or change residences In contrast, for children whose laid-off parent is not the major wage earner or whose unemploy-ment lasts only several weeks, the degree of disruption to daily rou-tines may be minimal As is the case for laid-off workers themselves (Kinicki & Latack, 1990; Leana & Feldman, 1992), the degree of disruption in daily routines is likely to be a major determining fac-tor in how much stress children of those workers experience

Community Wealth

It is also likely that the wealth of the community will influence the extent to which a parent’s layoff has negative consequences for the child’s psychological well-being For example, in communities where unemployment is widespread and conspicuous consumption

by teenagers is low, there is less likely to be any stigma attached to being the child of an unemployed parent In contrast, in commu-nities that are affluent and in which children are partially evaluated

by their peers on the display of material wealth, the discomfort teenagers feel because of a parent’s unemployment is likely to be much greater (Newman, 1988, 1993)

Quantity and Quality of Part-Time Work

The evidence suggests that both the quantity and quality of part-time work will moderate the extent to which children of laid-off workers experience negative outcomes as a result of a parent’s un-employment (Barling et al., 1995; Barling et al., 1999) In terms of hours worked, the research suggests that the longer the hours worked per week, the greater are the negative consequences for teenagers; this is particularly true when work hours exceed twenty