Effects of Layoffs the Big Picture
How Layoffs Affect Standard of Living
A layoff can affect not only the person laid off, but many around them, including family, friends and neighbors. There is a trickle down effect when someone is suddenly without income.
Depending on the length and severity of the situation, your personal relationships can be strained to the breaking point.
May affect others' standard of living if you were helping out a family member or donated to charities
May affect your children's standard of living, depending on how bad things get, a child's self esteem could be damaged by a sudden decline from what they are used to - maybe you no longer have money for activities or summer camp, or lessons. Maybe no more birthday parties, this could greatly affect a child socially.
May affect your neighbor's standard of living if your house goes into foreclosure & brings down the property values in your neighborhood.
The following are some things you may have to deal with that will greatly affect the quality of your life and your standard of living during a period of unemployment due to layoff:
Constant calls from creditors. Trying to negotiate with creditors, trying to decide how to ration your savings / cash on hand. Juggling bills. It is a full time job trying to plan money / bills and trying to find a new job. Thinking about the logistics of moving if you lose your house - can you afford a storage unit for your belongings? Can you afford a U-Haul rental? Do you have a place to go?
Doing without nonessential personal belongings, deciding what to part with to try to raise money.
Possibly having to take steps backward instead of forward career wise if you have to take a lesser or lower paying position. This could affect your standard of living for years to come.
Living in constant fear that one illness or accident could send you into bankruptcy, which will affect your standard of living via your credit score (by which all things are judged) for ten years. The stress and insecurity is enough to increase the likelihood of illness or accident.
Sometimes friends and neighbor's tend to fall away, they feel uncomfortable and don't know what to say to you. Not being able to participate in activities with friends (due to lack of funds) adds to the feeling of isolation and rejection.
Knowing your standard of living may never be the same as it was, or it may just take years to dig out of the hole to get back to where you were is depressing.
Missed opportunities for investments, lost interest you could have made on savings or CD accounts. Stalled, or worse yet - no retirement accounts. Your retirement may be delayed, or you may have to make major downgrades in your plans.
Realizing how little control you really have over your life situation is very scary. Timing and luck are big factors, at least as much if not more so than personal responsibility. You can do everything right - show up for work on time every day, do an awesome job, build up seniority and think you have job security - and have it all taken away in an instant.
