While the security of a cubicle, a paycheck and a 401(k) plan may sound pretty tempting right now, corporate America is just about the riskiest place you can go.
Sure, Big Brother may pay your bills for a while, but when that big ship goes down, you may find yourself lost at sea without a paddle. (Just ask the UAW.)
Check out these stats:
The United States lost a total of 605,000 jobs in the first eight months of 2008, including 84,000 in August 2008, according to The Center for American Progress. Since October 2007, the United States lost on average 23,600 jobs each month after gaining an average of 116,100 in the 12 months before that and 184,000 in the prceding 12 months. In August 2008, the unemployment rate hit 6.1 percent–the highest level since September 2003, the center reported.
And the news keeps getting worse: More than 240,000 Americans lost their jobs in October 2008, the Labor Department reported last week, and the unemployment rate jumped to 6.5 percent, a 14-year high, from 6.1 percent in September.
Get the picture?
These days, running to the safety of corporate America makes about as much sense as hitching a ride on The Titanic–after it hit the iceberg.
Your own small business, by contrast, may be just the lifeboat that you’re looking for–especially if your company provides a product or service that the big boys are now looking to outsource to independent contractors.
Shortly after I quit my job as a business reporter at The Miami Herald in 1990, I set up shop as a home-based freelance writer and began offering my journalism services to business magazines and trade publications.
Then the recession hit.
For me, the timing couldn’t have been better. Rather than pay a full-time staffer $40,000 or $50,000 a year plus benefits, national magazines jumped at the chance to hire me for $1,000 a month to write a story–no payroll taxes, benefits or strings attached. Quality journalism for $12,000 a year? That was a no-brainer for clients like mine.
But while corporate America was getting a great deal, so was I. When I left The Herald, I was making $38,000 a year plus benefits as a full-time reporter. As a freelance writer, I picked up the phone and, within a few years, had assembled a core group of eight to 10 newspaper and magazine clients that each paid me about $1,000 a month. Though I was putting in twice the hours I’d been logging at my full-time newspaper job, I was also making twice the money. While I had to pay my own taxes and find my own health insurance, I was certainly better off than I’d been before. And I also got to work from home with my kids.
Now I’m not saying that this strategy can work for everyone–especially not sales clerks and factory workers who can’t retail their services on a freelance basis. But it never ceases to amaze me in times like these that certain people who dipped a toe in entrepreneurial waters when times were flush–like the Silicon Valley engineers interviewed in a recent Wall Street Journal story–decide to leave their positions at startup companies for “safe” jobs at Fortune 1000 conglomerates with steady pay and benefits. These are the same corporations that wouldn’t think twice about laying off 8 percent of their work force in one day and wouldn’t know a 10-year employee from a number on a spreadsheet.
Looking back on my five years at The Herald, I don’t think there was a single week when I didn’t hear some rumor of an impending layoff. Fortunately for me, I had already left The Herald and gone into the internet business before my old industry got smacked by the perfect storm. Some of my friends from the newspaper business have fled to fields like law, finance and public relations; others have stayed in the industry as reporters and editors and now are fighting for their jobs.
My point is this: When a recession strikes, there’s no place to hide. And people who are foolish enough to think they can flee to the safety of a large employer may very well end up like those thousands of New Orleans residents who got stuck in the Superdome during Hurricane Katrina. In volatile times like these, there’s only one sure-fire strategy to pursue–and that’s to spread your risk among multiple clients.
The big guys call it portfolio theory. I call it small business survival.
This entry was posted on Monday, November 17th, 2008 at 6:58 pm and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.6 Responses to “Time to Run to Corporate America for a Job?”
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November 18th, 2008 at 12:35 pm
I agree with you 100%. Feeling confident that someone out there thinking like me.
November 18th, 2008 at 11:49 pm
I’ve been working as a copy editor at a newspaper for 13 years, and would like to find out more about freelancing from home. Any suggestions?
November 23rd, 2008 at 8:16 pm
I love this blog. Thanks for the wonderful insight. These are such crazy times. Another great resource I found for professional women is w2wlink. The site has wonderful articles and networking circles where you can share topics like-entrepreneurial, corporate fast track,work life balance etc. This is a great article about making yourself more marketable which something we all need to do in this economy http://www.w2wlink.com/Articles/Yourself-Employable-artid130.aspx.
November 24th, 2008 at 11:18 am
I have been freelance and sole support of my family (house, car, insurance, the niner) for 28 years. I have ridden out two recessions and now am in this whatever-it-is mess. I would add two observations to this post. First–notice it took the poster “years” to bring those thousand-buckers on board. And, two, when people are being tossed overboard in bundles like now–they are all trying to pick up freelance at least until they can find real jobs again. The competition increases along with the perceived opportunity, which I personally doubt exists, unless you get a contract from your old employer. If companies who have laid off employees are going the contracting route instead of using last year’s brochure or stalling on new commitments, they are probably delighted to learn that the cheeseballs advertising on Craigs have driven freelance rates into the john. Aren’t I the perky one? Oh, well…
December 10th, 2008 at 3:50 pm
I’m afraid I agree with Star. I was laid off three years ago, and the first two years I managed to couple together contracts and a media fellowship to keep my life afloat. But with the massive job losses in media, this year has been abysmal and from what I can tell, next year may be worse. Given the recent Tribune Company bankruptcy as a sign of more to come, I fully expect one, maybe two, national newspapers (NYT and WashPost) to survive the next five years as print publications, and probably NO newsmagazines. Freelance rates for online work are pathetic. I’m happy for the writer of this blog who has done so well after leaving her job 18 years ago, a time I worked at the Washington Post and media was expanding. But now??? Good luck everybody, it’s c-c-cold out here in the real writing world.
April 8th, 2009 at 4:53 pm
This is never easy.