This weeks personal finance brain trust question was a tough one that caused many of our bloggers to not contribute because there really isn’t a good answer to it. I knew it was going to be a tough one.
DHL just announced massive layoffs that will cripple the town of Wilmington, Ohio and the surrounding area.
What advice do you have for the DHL employees, businesses and people of Wilmington, Ohio to be able to deal with this?
WC – A 27-year-old writer living in Chicago and writing about personal finance through The Writer’s Coin.
This is a tough one because I don’t know that I have an answer for the people who are now out of a job at DHL. My answer is more about what you can do before this happens, and I think it has to do with what’s happening in the auto industry and in Detroit.
You have to diversify your skills. If you’re really good at something, then by all means go out there and do it well and you should be fine. But always make sure you’re expanding your skills. Don’t let this happen to you where a shipping company says “You’re fired” and all you can do is something related to shipping (or the auto industry). Picture yourself doing something else—if you can’t then you need to re-evaluate what you’re doing.
This is another reason to always push yourself at your current job (another being that it makes you a better worker), so that you get better as time goes on. This makes you less expendable and, if you do lose your job, better positioned to find a new one.
Patrick Bryan – Living in Northern Ireland, Patrick helps people in a very different environment and economy but yet, much is universal and much is the same. Visit Patrick’s Northern Ireland blog on debt.
It is the sheer scale of the job losses in Wilmington that is staggering – 7,000 jobs in a town of just 12,000 people. It is hard to imagine how a small community manages to recover from a shock like this, and I’m afraid that there could be some hard times ahead for both the former DHL workers and the local shops and businesses which rely on the money they spend with them.
If you have lost your job my advice is to first do a serious appraisal of your financial situation and where possible cut out all unnecessary expenditure immediately. Cut back on Christmas, sell the second car, hold off booking the family vacation for next year. Second – consider if you should relocate elsewhere – is there a job you can do in another country/state? It might be tough moving away from your friends and neighbours but you must at least consider this option as it could be the quickest route back to financial security.
For those who want to stay (and I can’t blame you, I believe Wilmington is a beautiful town with a close-knit community) then you need to think about what you can do to make yourself employable again. Can you retrain for another trade or profession? What service do people need right now in your local area and are willing and able to pay for? If you have always harboured a desire to do something else with your life then this is your chance – to go back to school or learn a new trade, or start a business. Bear in mind that there might not be a lot of money being spent in your town for a while so perhaps there is either something you can do which involves selling your product or service on a wider scale? The internet and ecommerce is a great liberator in this respect and enables many businesses to operate without any major constraints on location in relation to their customers.
I live in Northern Ireland which over the past 40 years has gone through the cycle of suffering a large number of job losses from a number of large employers (shipbuilding and heavy engineering), through to a period of economic regeneration to create the relative prosperity enjoyed now, and the best solution for job creation (which took a lot of trial and error to arrive at), was for the government to provide relatively small but numerous sums of grant money to encourage local people to create small to medium sized businesses which created jobs in their community. This spread the risk of one business or sector going into decline, and also avoided the prospect of multinational companies such as DHL cutting off limbs in an economic downturn as has happened in this case. Let’s hope the new administration has some grant money available to help towns such as Wilmington, Ohio rebuild their shattered economy and in future provide more local control over job creation.
Steve Rhode – A personal finance blogger and founder of the Myvesta Foundation, a global social enterprise that helps people find solutions for money troubles. You can ask Steve your debt related question through GetOutOfDebt.org and he’ll help you for free.
What Do You Do When The Town Is Laid Off? - Personal Finnance Bloggers Question of The Week by Steve Rhode
The DHL cuts create an economic dust bowl like that faced by the residents of Oklahoma and the High Plains back in the 1930s. The Dust Bowl exodus was the largest migration in American history within a short period of time. People had to move because the ground was no longer fertile and food and income were scarce. It didn’t rain in that part of the country for nearly a decade of blowing dirt and dust storms.
In hindsight one can see that a region or town that is so dependent on one employer is playing with fire. It is one thing when ten local businesses fail that employ a total of 100 people but it is catastrophic when one employer fails and takes 7,000 jobs with it.
This is a time and opportunity for government to provide assistance to local residents to allow them to create small business opportunities in the soon barren community. It is the good side of government and a role that it can play to make a real difference in the area.
The thought that another similar employer is going to be located and enticed to fill the now missing jobs, is an unrealistic expectation.
While residents may want to stay and fight for a better future, at some point the reality of having to put food on the table, make the car payment and pay the mortgage become a reality. And at times like these, these emergency days, this is the time that people, rightly or wrongly, turn to credit cards to make it through. Payments will be expected, life goes on and income must be replaced.
Such a mass exodus out of town creates other problems as well. With so many homes going up for sale as people leave the Wilmington, Ohio area, housing prices will plummet. There will not be enough buyers for the homes on the market. Homes will languish and eventually be foreclosed on.
The largest mistake people in Wilmington will probably make is to use up their credit and spend down their savings in hopes of finding a good solution to stay. That will only leave people broke and trapped in a dying community.
There is no good answer for the people of Wilmington, Ohio that will leave them without the need for sacrifice or loss. With the drying up of DHL it is much like the Dust Bowl drought. It would be best to learn from history and not repeat the same mistakes learned by the residents of the Dust Bowl or those from economically ravaged steel towns that have yet not come back.
With unemployment rising all across America it may no longer be a choice of finding work where you want to live but living where you can find work. Like the Oakies of the Dust Bowl that loaded up the Model T Ford for the drive west in pursuit of jobs, so will many Wilmingtonites migrate to other corners of the country, in search of jobs and in search of financial dignity.
Wilmington, Ohio can come back in the future but it will first go through a period where it will wither and die back. Government intervention may be a solution to revitalize the area but those programs will take time. Spring does not come immediately.
But in the future where there might not be hope right now, opportunity will rest in potential. What one person sees as an empty town, another creative soul might see as a blank canvas of new and better things. Downtown storefronts might turn into unusual residences with character. Local pizza shops, service and craft stores may open and from the ashes a future new Wilmington may be born.