"This country is hard on people."

It’s March 1, 2023, and here’s the rundown:

• Layoffs: The result of corporate peer pressure?

• “This country is hard on people.”

• Numbers and links

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Layoffs: The result of corporate peer pressure?

Are tech companies laying people off because everybody else is doing it?

Image: Statista

You’ve seen the headlines: Tech companies are laying everybody off. After a decade+ of unfettered growth, fueled by low interest rates, competition-gobbling monopolistic behavior, and the ability to suck up personal data, repackage it, and sell it thanks to a lack of any sort of cohesive consumer protection laws, companies like Meta, Amazon, and Alphabet are feeling the need to cut costs.

The billions upon billions simply weren’t enough, you see, and now it’s time to cut costs and fire thousands of people. Of course, this happens all the time. Often, companies do it when the economic situation is getting tough, too. That doesn’t quite explain the layoffs occurring in the tech sector in recent months, however, as the economy has been pretty okay, despite many beliefs to the contrary.

What we’re probably witnessing is a come-down from the cocaine high of the pandemic, when everybody was sick and depressed and Googling old classmates and eating and alone and buying stuff and…well, you all know what it was like. But now, we’re going through a re-adjustment period of sorts.

As for all those layoffs? They are mostly confined to the sector for now, which is why we’re still seeing really strong jobs numbers. So, what is happening at tech companies, then? Here’s an interesting take from Jeffrey Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior at the Stanford Graduate School of Business, in an interview with “Business Insider”:

“A lot of companies were hiring during the pandemic, so everybody decided to hire. Now, companies are laying off, and everybody decided to follow each other and lay people off. A lot of this is just imitation….

A lot of companies doing layoffs cite the economic downturn, but many of them aren't going to run out of money if they avoid layoffs. This is a choice.

When people no longer have jobs, their purchasing power and purchasing activity goes down. So these layoffs help create the very economic downturn that they're supposedly protecting against.

The companies also try to justify the layoffs by saying there's been a drop in demand, but you could argue that one of the reasons for that is that all this talk about layoffs has scared everybody. That means fewer companies want to advertise, for example, which affects companies like Meta and Google. So it becomes a self-fulfilling prophecy.”

Essentially, layoff fever in the tech sector is a sort of contagion — one company sees it happening, gets freaked out, so it follows suit, and so on. What remains to be seen is whether the contagion breaks out of the tech sector, which it very well might. This is the weird psychological element at play in our economy: It, in large part, is dictated by sentiment.

If people get scared of a recession and act accordingly, it can put us into one. If they feel good, it can likewise influence their behavior and, in aggregate, keep the good times rolling.

But in the tech sector, where we keep hearing about layoffs, it appears that companies are caving to corporate peer pressure. The pandemic was a boon, so they hired a bunch of people, and now that we’re coming down from the high, they need to cut people loose.

Is it about money? Maybe, but as this story discusses, Salesforce is paying Matthew McConaughey $10 million per year for some reason while also firing 8,000 workers in January. So…is this really about fiscal responsibility?

Then again, these companies don’t exist solely to employ people. Hopefully, some of them go out and create the next big thing, be it a Salesforce competitor, a startup that sucks massive amounts of carbon out of the atmosphere, or a vehicular autopilot that actually works.

But as it relates to the layoffs? A sort of labor market contagion in the tech sector does make sense for now. Let’s just hope the dominoes don’t spill out and cascade into other sectors as well.

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“This country is hard on people.”

A small line from a classic film really stands out.

I recently watched “No Country For Old Men.” You know, for some light viewing. I had seen it before, but have been on a bit of a Cormac McCarthy kick, so figured I’d watch it again.

It’s a complicated movie. But the scene above stood out to me, and one line in particular:

“This country is hard on people.”

In the movie, the character means that the specific part of the world that the story takes place in is hard on people — or does he? — but it got me thinking. West Texas is, undoubtedly, hard on people. But we, as a nation, are pretty damn hard on people, too. Harder than we need to be, anyway.

One way that I think this holds true concerns childcare. I did a story a little while ago about childcare, and how people are contending with the costs. I pay for childcare, so I was interested in digging into the topic a little more. I spoke to a bunch of people and came to this conclusion: It doesn’t work.

The way we do childcare in the U.S. It doesn’t work. As one economist told me, “it’s a market failure.” We don’t have enough childcare providers, the ones we do have cost too much, and it’s leading to unwanted outcomes, like people sitting out of the labor force, etc. It’s a mess.

I asked the economist if we, the U.S., were an aberration in terms of opting for a market-based approach as opposed to just providing a top-down childcare system. He told me, yes, we were, and there really isn’t a solution to it. It’s more or less the same story with healthcare — what we’re doing doesn’t really work. A big percentage of the population is priced out of the market completely. There are places where hospitals shut down. We put people in debt for decades for little more than some simple job training or qualifications (when you think about it). There’s simply no access to the market for a lot of people.

This isn’t necessarily an argument for a single-payer healthcare system or a national childcare system — which, after talking to enough experts, I do think is probably the only viable solution to these issues, as seen everywhere else around the world — but these do represent a couple of the ways that we are “hard on people.”

I’ve expressed this sentiment many times in this newsletter/blog/stream of consciousness here called NPNR, and I’ll say it again: We really go out of our way to make things harder and more expensive for ourselves.

That said, I am also a believer in personal responsibility. That is, I think we should take care of our own issues as best we can, but we also have a personal responsibility to function as a part of society and work toward its welfare.

I think we should all do what we can, with what we have, where we are, to move the ball downfield. Many of our friends, family members, and neighbors are unable to do much. Others simply don’t want to. I get it. It’s frustrating for us all, especially when we need to pool our resources and energy to achieve certain outcomes. It’s not always going to be fair.

But I also think that we can work together, collectively, to solve problems. By refusing to do so — only in some circumstances, by the way, because we do have single-payer healthcare systems for certain segments of the population — we make things a lot harder than they need to be. It’s taking its toll.

Suicides are up, there’s a mass shooting every day, and people are turning to drugs in huge numbers. It’s bleak.

This isn’t new, either. It’s probably become more apparent since the Great Recession, though.

Part of this is kowtowing to corporate interests. Maybe most of it, I don’t know. Some of it is a hard-held belief among many people that we Americans are simply cut from a different cloth than the rest of the world (which may or may not be true, but it doesn’t help us break through the line, to keep up with my football analogies).

There are a lot of things at play. I suppose this is all to say that I think we can do better, and we can stop putting so many people through the meatgrinder if we start considering, first and foremost, the toll modern life is taking on many households. As some hippies say, “people before profits,” and all that.

I’ve been around the world, too — things aren’t perfect in France or Costa Rica or New Zealand. But in many countries, they are less complicated, and services can be much easier accessed. That’s something to keep in mind: The U.S. is an extremely complicated country. It’s geographically monstrous, with a wide swath of interlaced cultures, a diverse demographic makeup, and distinct regions that may as well be their own country. All things considered, it’s amazing it works as well as it does.

All this said, we have our problems, and there is definitely room for improvement. This is, after all, a big experiment of sorts. I think that we all do want to work toward the best outcomes for the biggest percentage of the population — we seemingly just disagree on how to get there.

As for “being hard on people” — I do think that life in the U.S. is harder than it needs to be. There may be some positives to that (maybe we’re “stronger” because of it? I don’t know). But the question is this: Do those potential positives outweigh the costs?

Doing things the hard way is a core tenant of this here newsletter. So, I clearly think that there’s some merit to putting in the effort to do things right and sustainably. But I’d argue that on a broad scale, that’s not what we’re doing, or even what we’re aiming to do. We can do better.

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Numbers and links

• 25 million: The lives saved by The U.S. President's Emergency Plan for AIDS Relief, a $100 billion program implemented by the George W. Bush administration. (NPR)

• 37%: The increase in child labor violations discovered by the Department of Labor in 2022. (Financial Times)

• The Build-Nothing Country: We can’t build anything, anywhere, and it’s causing a lot of problems. (Noahpinion)

• WTF: “The United States is already the most dangerous developed country in the world for women to give birth, with a maternal mortality rate of 23.8 per 100,000 live births — or more than one death for every 5,000 live deliveries.” (The New York Times)