Firing someone from job owing to the recent financial crisis would have several undesired aftereffects. To list a few of them,
- As rightly pointed out by an article in Knowledge at Wharton by title 'Job Cut vs. Pay Cut: In a Slowing Economy, What is Better for India?', losing a job creates an image of incompetence in the mind of family and friends. Even more dangerous is that it would lower the self-esteem of an individual and that can lead to further decline/irreparable damage to his/her self-image and efficiency.
- Losing a lucrative job would plunge the person in a quagmire of depression, affecting the mental health of the person and his family/friends.
- As an extreme step, the employee may commit suicide also. Several news about suicide by people due to loss in the stock-market has come recently.
- Now the economic aspect: losing a job means losing the purchasing power which means low level of effective demand. This would translate into a glut in the economy and ultimately will deepen the depression.
- When employees from a particular industry/sector lose job at a large scale, it creates a problem of unused skill. These employees have specialised a particular job. A drawback of specialisation is that one loses touch with other common tasks which fall outside the gambit of this sector/industry. Such employee feel the punch the hardest as they found it very hard to get and do well in some other sector/industry. Though they're good at what they know, they're worthless in such a situation, a kind of paradox.
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