Strangled By A Safety Net

The year 2019 has been an anxious one for the American worker. In March, a report from the outplacement firm Challenger, Gray & Christmas noted that corporate layoffs had hit their highest level for a first quarter since 2009—a 35.6 percent increase from 2018. As a result, 190,410 workers were left out in the cold…

Strangled By A Safety Net

The year 2019 has been an anxious one for the American worker. In March, a report from the outplacement firm Challenger, Gray & Christmas noted that corporate layoffs had hit their highest level for a first quarter since 2009—a 35.6 percent increase from 2018. As a result, 190,410 workers were left out in the cold between January and April, even as the fascist in the White House continued to tout low unemployment numbers and crow about “jobs, jobs, jobs.” Media giants like Gannett and Verizon and digital upstarts like BuzzFeed and Vice Media accounted for at least 1,650 of these lost jobs. (Full disclosure: I was laid off alongside 249 Vice coworkers in February 2019.) And the trend shows no sign of abating: digital and print media outlets have continued to shutter, while Ford announced in May they’d be reducing their global white-collar workforce by 10 percent, including 2,300 job cuts in the United States alone.
Almost 80 percent of American workers live paycheck to paycheck, which means that in the event of a layoff they have no savings to fall back on. Many will have to apply for unemployment compensation, which most states award to workers who have been in their job for a specified length of time (such as at least a year). The benefit is usually much less than the worker’s full paycheck was. The better option is to leave with severance pay—which the Department of Labor defines as a sum “granted to employees upon termination of employment” and is usually based on years of service. As the DOL makes clear, severance isn’t a right that’s enforceable by law outside of a union contract. And although there is one useful legal tool for workers without severance contracts, it only applies in certain cases. The WARN Act (Worker Adjustment and Retraining Notification) is a federal statute that requires companies with over a hundred employees to give workers at least sixty days’ notice prior to a plant closing or mass layoff, which is defined as affecting more than fifty jobs. Failure on management’s part to give appropriate notice entitles workers to sixty days’ worth of wages and benefits. But the WARN Act generally does not protect part-time employees, or those who have been with the company for under six months; in addition, the Labor Department notes that “regular federal, state, local, and federally-recognized Indian Tribal government entities that provide public services are not covered,” either.
For workers lucky enough to have the option, accepting a severance payout may preclude them from filing right away for unemployment benefits, depending on the state. In New York, for example, where the vast majority of 2019’s newly unemployed digital media workers are located, individuals who continue to receive the exact same benefits they did while working will be ineligible for unemployment (unless their weekly severance pay is less than the maximum weekly unemployment insurance benefit). For those whose severance is structured in the form of weekly or biweekly “paychecks,” that means they’re unable to apply for any extra help until the pot runs out. At that point, they will either need to find a new job post-haste or become intimately familiar with the ins and outs of their state unemployment agency before their next rent check is due. Not to mention costs like health care—while laid-off workers who qualify for COBRA can temporarily continue on their employer-sponsored health plans, the premiums are often prohibitively expensive, especially for those newly facing financial hardship.
It’s true that individuals are sometimes able to negotiate for a better deal, but ultimately, without a union contract, even the most beloved employee is still at the mercy of the overlord in the corner office once they’ve decided it’s time for heads to roll.
Flight of the Golden Parachute
When the topic of severance packages comes up in polite conversation, it’s usually not in response to a news story about a group of workers who have unexpectedly had their livelihoods yanked out from under them. It’s because some swinish CEO or another has vacated their position and been rewarded for years of corporate malfeasance with an enormous parting gift. These golden parachutes are par for the course among a certain echelon of C-suite executives, whether they’ve put in thirty years or, in cases like that of former Merrill Lynch CEO Peter Kraus, a mere three months. The sums conjured up for their departures are enough to make Rupert Murdoch’s wizened human flesh mask blush—or send a normal person running toward their nearest guillotine wholesaler.
When former General Electric CEO Jack Welch—who became known in the early 1980s for popularizing mass layoffs as a demonstration of “corporate competitiveness”— left the company back in 2001, he collected an eye-watering $417 million in severance. According to a recent discussion among workers on The Layoff forum, a regular, non-CEO GE worker’s severance deal can be comparatively paltry; with some luck, they will receive one week’s salary per year of service—and perhaps as high as three weeks’ per year, if they’re really lucky. According to Glassdoor, engineer salaries at GE range from $53,652—$127,281. That may be a comparatively sweet deal considering the sorry state of severance pay in this country, but even in the best-case scenario, those numbers fall just a little short of what ol’ Jack raked in.
More recently, when Yahoo! CEO Marissa Mayer decided to bail after the company was taken over by Verizon in 2017, she was handed a $23 million severance package—and over $236 million worth of stock. The following year, Verizon slashed 7 percent of its global workforce, doling out 10,400 severance packages worth up to sixty weeks’ salary and benefits for those who voluntarily quit. But the company was later sued by two former employees who accused it of misrepresenting the amount of severance they would receive. It’s safe to assume Mayer did not have this problem.
While individuals are sometimes able to negotiate a severance deal, but without a union contract even the most beloved employee is still at the mercy of the overlord in the corner office.
Even if you’re of the mind that all CEOs are bad people, it is a bit galling to see just how well some especially bad people have made out. In 2016, after the now-infamous Access Hollywood tape heard ’round the world—in which Donald Trump made vulgar sexual comments about assaulting women as then-host Billy Bush tittered in the background—Bush lost his plum Today Show gig and was shown the door to the tune of $9 million.
When Fox News begrudgingly forced out conservative talk show buffoon Bill O’Reilly in 2017 following yet another series of damning sexual harassment allegations, his $25 million severance payout must have softened the blow. O’Reilly’s buddy Roger Ailes, the monstrous former CEO and chairman of Fox News, also stepped down in disgrace in 2016 after Gretchen Carlson, a former Fox & Friends host, sued him for sexual harassment and other women came forward with more allegations. Poor Roger was left with only $40 million to take away the sting. (Ailes died in 2017.)
Such excesses have not all gone unchallenged by the rank-and-file. After an October 2018 New York Times report revealed that two Google executives, Andy Rubin and Amit Singhal, had been awarded a collective $105 million in severance despite leaving the company amid a storm of sexual harassment allegations, the backlash from workers was swift and powerful. Though not unionized, twenty thousand Google employees staged walkouts in multiple cities to protest the payouts and other unsatisfactory sexual misconduct policies; in response, Google agreed to end its forced arbitration policy, end pay and opportunity inequality, and share an internal report on sexual harassment incidents. The victory didn’t take any money out of the two scumbag executives’ groaning wallets, but it did make concrete changes to the toxic culture that had allowed them to operate with impunity. No good deed goes unpunished in the marketplace, however, and organizers of the walkout later alleged that they’d faced retaliation from the company for the protest. At least one of them ended up leaving Google as a result.
There’s no end to this rogue’s gallery,
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