Mass Layoffs in Illinois: The Basics

Before our kids were born, my wife worked at an ad agency here in Chicago. Last month, the agency she worked for lost its biggest account1. Last week, the layoffs came: 100+ employees in the Chicago office, roughly 3% of the company’s worldwide staff, according to news reports. It’s a brutal cut.

Notably, this particular incident wasn’t a product of the recession or the global economy or anything like that. From the looks of things, it was a simple corporate falling out.2 These two companies had worked together for decades, and one of them decided it was time to move on. Which is a good reminder to us all: these things happen. Regardless of the market forecast, accounts can be lost, and adjustments have to be made.

My heart goes out to those whose reality has changed. God knows I know what it’s like. My mind, on the other hand – which for better or worse views the world through Labor & Employment-colored glasses – thinks maybe its time we talk about what to do when you’ve got to let a lot of people go.

There’s a lot of ground to cover, so today’s post is going to just go over the basics of what the laws require. Future posts this and next week will discuss more specifics: what goes in the notice(s), exceptions to these requirements, how to calculate when the notice should be given, etc.

Continue reading »

1. The account she worked on, incidentally [↩]
2. Ok, it is advertising, so there was actually a lot of drama involved, but none of it related to the recession. [↩]

Nobel Prize Goes to Labor Researchers

Earlier this week, while we were all celebrating the discovery of America, the The Nobel Foundation announced the winners of this year’s Nobel Prize for Economics. The three Laureates – Peter Diamond, Dale Mortensen, and Christopher Pissarides – were honored for their pioneering contributions to our1 understanding of “search frictions” in the marketplace, specifically with regard to inefficiencies in the labor market.

Search theory is a way of understanding why there can be a surplus of both supply and demand in a given market. Why, for instance, are unemployment rates so high at a time when so many companies say they need workers?

The Prize winners developed a theory, which now bears their names, to explain how external factors – the increased efforts of other job seekers, the matching of candidate skills with employer needs – can add cost barriers to the efficient, supply-and-demand equilibrium of the job market. The theory provides analysts with a starting point to model the job market, and hopefully figure out how to unstick a log jam in the seek-and-find dance of recruitment on a macro level.2

More information on the Laureates and the Prize can be found here.

1. I use that term loosely [↩]
2. One of the most talked about findings of the Laureates’ research is that increased unemployment benefits can create a barrier to finding a job, because it makes unemployment less burdensome. [↩]

Willing to Relocate? Bring a Coat.

What if I told you there was a magical land where the mortgage crisis never happened, where banks, people, and the government were all flush with cash, taxes were going down, industries were moving in and home prices were reasonable?  What if I told you there was a place with 4.2% unemployment and 9,000 available jobs, just waiting for resume submissions? 

If you’re like I was, you’re now asking what language they speak in this Utopia.  Well, it’s English.  Moostly, ya noo. 

Yep, jobless midwesterners, break out that Bison penant  - North Dakota wants you!

A report from Marketplace details how North Dakota is soliciting workers from hard-hit midwestern states like Ohio1 and Michigan2 for its booming work needs.

According to Marketplace, the Flickertail State is reveling in a combination of planning and timing – their banks steered clear of the subprime mess, and they lured companies like Microsoft to set up shop (if Jeff Krause is right, though, let’s hope it’s not an Office 2007 distribution center or something). 

While all that was going on, the coasts suddenly realized there was a huge land mass between them that could be used to create renewable energy, and North Dakota added a whole new industry to its list of hiring sectors. The state currently has a $700 million surplus and just lowered its taxes.

Will it be a switch from what you’re used to?  Sure, especially if you’re coming from a big city.  But don’t judge the state too quickly.  Here’s what one person featured in the story had to say about her new home:

Oh, Bismarck is beautiful! It’s clean, and there’s a mall, and it’s a nice mall, and has some of my favorite stores. 

Wait – even their malls are surviving?  Man, when can I move?

1. 11% unemployment [↩]
2. 15% – highest in the country [↩]