I read a story on the front page of The New York Times the other day that healthy companies are laying off employees to prevent a recession. This raises the question:
By firing people is it possible to cause the very recession you're trying to prevent?Take the case of the Extra Creamie Yogurt Co. The powers that be at Extra Creamie met to discuss how to avoid a predicted drop in sales.
"Gentlemen, we must try and steer clear of this business downturn. As a stop-gap measure I propose that we terminate 1,000 employees. This will give us some leverage if the good times don't roll by."
"An excellent idea. We've been overstaffed for years, and it's about time we took the bull by the horns and chopped off some heads below the knees."
"Objection. If we get rid of 1,000 people we would be contributing to the disaster we want to prevent."
"That's ridiculous. All we're trying to do is protect our bottom line. I say we lay off 1,500 workers every Thursday. In that way we'll scare those who are left behind and they will produce twice as much yogurt as they did before."
"Gentlemen, let us suppose that every company fires a percentage of its staff. The purchasing power of the whole country could be put on hold and people will have a serious cash-flow problem - so serious that no one will ever buy a cup of Extra Creamie Yogurt again."
"You can't have a recession THAT serious. Consumers want our yogurt."
"These are tougher times. It appears that the United States has talked itself into a recession and everyone is pushing the panic button."
"I have been in stormy seas before. They can get very ugly if you don't reduce the size of the payroll. Our actions will be remembered by our stockholders when they talk about the great plop of 1990."
"What is a recession? It's nothing more than a lack of customers in a store. It's empty seats at McDonald's. It's a showroom full of new, unsold cars. It has nothing to do with yogurt."
"Gentlemen, I say we keep all our help and fight the recession from within."
"No way. Lop off their heads. Someone read the list of the condemned."
"That's me. You can't fire me - I'm management."
"Companies save money during a preventive recession by dumping managers."
"I demand an appeal."
"George, you can do whatever you feel comfortable with. In the meantime, please accept this quart of Extra Creamie Yogurt as your severance pay. Preventive recession is a dirty business but somebody has to do it."