Losers Magazine (tm) Article No. 14 (10/6/95) by Carl E. Person

How to Survive as a Victim of Downsizing

Ok, so you've been downsized. What does it mean? Let me try to put your problem into perspective.

You had years of faithful work for an employer upon whom you relied to provide a substantial retirement income and peace of mind in later years.

You did what you thought the employer wanted, and in fact you were correct, only that the corporation (probably a major corporation) somehow changed its mind and the rules in midstream, from your standpoint.

To be frank, you recognized that you were earning more than you could earn elsewhere and sort of wondered what made you so lucky, and were afraid for years that someone would find out this truth, that somebody else could do the work for less, and probably do a better job (... well, you may not be willing to concede this right now).

You saw many others working for more than they were worth and felt that you had made the right career choice, even though there were some personal restraints which went along with your choice. In fact, these restraints prevented you from doing what you r eally wanted to do, and made you somewhat unhappy. You felt chained to the job, but then you only had to put in 12 more years and you could have then opted for retirement.

Is this basically what happened?

From the corporation's standpoint, it wanted to hire younger persons and/or persons in another country or in another part of the United States, at lower salaries of course.

You were getting old in your ways and some new blood was needed, to boost sales, marketing ideas and profits.

The nation's laws prohibited discrimination against an employee on the basis of age, but the nation's laws don't prohibit an employer from moving his plant outside of the U.S. and hiring 16 year old male workers, if it wants. In fact, our government poli cy (expressed in its tax laws and NAFTA) favors moving jobs out of the U.S., including yours.

You wonder, is there anything which can be done about it.

Well, I would look at union contracts, your own employment contract, if any, and any agreements by which your former employer obtained tax benefits in exchange for a promise to remain in town. But I wouldn't expect too much there. If you are lucky, you might be able to do something.

On the other hand, let's assume that you are now on your own, having been cast aside, what should you be thinking about and doing to take charge of your employment, financial and retirement future?

You probably are not at an age which is suitable for employment by another big business, with obvious exceptions in instances where your skills are in great demand. The economic penalties for the hiring of older persons is just too much to expect that you would be treated equally with younger applicants, and besides you wouldn't be willing to work for what the younger applicant is willing to take.

Well, what should you do? Let me put it another way and ask what would I do if I were in your shoes?

My first thought would be to stop spending as much money as possible. Reduce your overhead. Put your home, if any, on the market to try to reduce your standard of living and obtain some needed cash savings. Don't buy a new car. Fix up the old one, or b uy a used car.

Try to budget the amount you have available to spend and stay within the budget.

Look for some immediate type of economic opportunity, whether it be as an independent contractor or employee. You probably will not like what you can get or do, but I would try to stabilize the economic situation by getting some income and trying to live within these reduced means. I compare this situation to a small business when it finally reaches break even, meaning it can last forever as long as it is breaking even, or in medical parlance, when a sick patient is stabilized by bringing the illness unde r control so that things are getting no worse.

Once you are able to stabilize matters, you can try to implement plans for improving your situation.

I am a great believer in working for myself and not working as an employee. Accordingly, you must forgive me if I skip the tedious details of explaining how you should look for a job opportunity. I'm going to assume that you will take care of this detai l, or decide to skip it altogether.

My first thought is that you should start learning about the computer and acquire one for yourself as quickly as possible, assuming you are not already computer literate and the owner of a computer (486 or better).

The fact that you are accessing this electronic magazine article on internet leads me to believe that you are computer literate.

If you have available capital, you might be able to buy into or finance your own business opportunity. I don't have much to say about that except to say be careful. Know what you're getting into, and don't bet too much of your savings in any new venture , especially under your present circumstances.

For those who have no significant savings to invest in a new business (because you'll need whatever you have to cover your personal expenses until you can stabilize your economic situation), it is clear that you will have to create some type of service bu siness (or perhaps sell newspapers or frankfurters). I wouldn't laugh at the frankfurter business. I understand that in New York City and Long Island there are many roadside frankfurter stands run from used Post Office trucks (or the like) pulling in $1, 500 per week or so for the owners, some of whom might well be downsized doctors or lawyers.

To do this sort of thing, especially when some of your customers might be your former patients or clients or business associates, takes a lot of guts or a good disguise.

Taxicab drivers in New York City working 16 hours per day and owning their own medallion pull in about $1,500 per 6-day week ($200 to $300 gross per day), out of which they pay $120 for gas and oil, perhaps $20 for repairs (I'm guessing on this one); and 8% interest per annum on the $150,000 to $200,000 loan from Citibank with which they bought the taxicab medallion. Driving a cab is truly a job of last resort in NYC, because of the great amount of competition by new immigrants with some knowledge of Eng lish (coming from Haiti, India, Pakistan, and Bangladesh for the most part) who are willing to work for about $6.00 per hour after all expenses are taken into consideration, including $98 per shift to rent the taxi (with its $250,000 medallion).

My thoughts, instead, are in another direction. I would buy a used Post Office truck at auction, for about $100; put in tools and small equipment; buy a cellular telephone; hire unemployed youths to pass out flyers in a neighborhood of single or 2-family homes offering to do handyperson work of any type (short of license-required contracting) for $20 per hour in cash. I cannot see how you could do anything less than fill up 10 hours per day of productive work, earning $200 per day in cash or $1,200 per we ek for a 6-day week.

In other words, that is my choice of economic activity of last resort. There are various others, but this is an obvious activity. It fills a need which any businessperson or middle-management employee of big business has, to get someone else to do the s o-called lesser or tedious work, to free up such businessperson or middle manager to do the more important things he/she has been selected in life to do, until he/she is also downsized.

Also, I would get on internet and try to see what business you can scrape up by offering your services in a website.

For persons who want to become an employee, once again, I have a much better idea, a type of employment which can lead to the top in someone else's business. Here's what I mean.

Small businesspersons like myself (and I do consider my practice of law as a small business) cannot find persons who have sufficient skills to be of much use to them on a fulltime basis, and I (and other small businesspersons) cannot afford to hire one fu lltime person for each needed skill.

However, if a person comes along who has multiple skills of the type I can use, I (and other small businesspersons) would be very interested in hiring such person, with the hope that he/she can make my business prosper, and prosperous enough to make the e mployee a part owner or partner by reason of the expansion.

This field of employment I have named the personal assistant, and I have written a pamphlet on it which you can access through the pamphlet option in LawMall (tm). The pamphlet is entitled something like HOW TO ASK FOR A RAISE - AND GET IT! - a title whi ch hides the fact that the pamphlet is a hot to booklet to tell persons like yourself what you need to know to become of use to prospective employers such as myself.

Take a look at the things you should learn how to do. If you can learn these things and apply them, you would be a very valuable employee and potential owner/partner of many small businesses in the United States.

In other words, through the personal assistant field (which you will not hear about other than through my materials in Lawmall), you have a way of becoming economically useful to yourself, to one or more small businesspersons, and to the economy. I consi der this the best employment opportunity for many persons who are downsizees, underemployeds, unemployeds, to help unprofitable small businesses.

I recommend that personal assistant be paid in the neighborhood of $600 per week to begin, with an additional $100 per week increase for each hour per day, on the average, they can save for their employer.

If personal assistants as I describe them were used by one out of ten small businesses, the impact on the U.S. economy would be greater than almost anything else which could be done, other than making capital competitive, freeing up education from the res traints, and reforming the political process.

Let's assume that the average personal assistant would make $40,000 per year, and that 1,000,000 small businesses out of the 10,000,000 or more small businesses employed one personal assistant, and assume further than the expenditure of $40,000 for one pe rsonal assistant had an impact on the employer of an additional $400,000 in business (at the ratio of $10 in new business for every $1 paid to the personal assistant). This would mean an impact in the gross domestic product of $400,000 times 1,000,000 or $400,000,000,000 (yes, $400 billion per year).

The reason that no such field exists today, although I had received all necessary government approvals, including student loans, for training of the personal assistant, is the costs and delays involved in getting the various government agencies and accred iting organizations to give their approval to this new field. They provided no more resistance to my new ideas than they normally provide to any other suggested improvements, which is the problem, of course.

Without regulation, I could have started the personal assistant field, as I did with the paralegal field back in 1972, but with regulation, applicable only to for-profit career schools, I did not have sufficient capital and personnel to cope with the bure aucracy, and I finally had to let the field die before it had a chance.

Nevertheless, the idea remains, and can be implemented by individuals even if I was not able to implement the idea en masse.

For those that don't want to be self-employed handypersons or employed personal assistants, you should try to identify what services you have, and who may want to use them, then adopt a marketing plan for yourself with greater skill than you ever did for your former employer.

The old saying of finding a need and filling it remains true, but you have to recognize that if nobody knows that you're offering the service you won't get any takers.

I think the growth of small business, especially for individuals offering their services for short periods of time, such as a few hours or a few days, will center around specialized websites, but you will have to expand your marketing beyond the web, beca use the web has not yet reached critical mass where you can earn a living from the web. It is convenient, but not sufficient.

If you have any questions about how to get started, please e-mail your questions to me at carlpers@ix.netcom.com, and I will get back to you with whatever help I can think of.

Copyright © 1995 by Carl E. Person. Permission is given for non-commercial users to send a copy of the data processing file for this work by electronic means to a specific individual for his or her own use, and then only if the entire file is sent, including this copyright notice, but no permission is given for anyone to copy or transmit this file for or to any person for public viewing or downloading. It is intended by the author of this work that the work shall be made available in electronic fo rm only through LawMall (tm).