Severance: it's means you got canned but if you got somea that way back, like circa Bear going down, before the next level shit of everyone getting axed, it was safe to assume you a) got a decent amount it and b) weren't looking for a new job in the scariest environment imaginable. So, it was only natural that you didn't freak out or take the first new gig you were offered, whether or not involved standing on a street corner. Also? You probably didn't change your lifestyle much, right? If you answered yes to any of the above, Paul Joegringer knows how you feel:
Paul Joegriner hasn't worked since March 2008, when he was laid off from his $200,000-a-year job as chief executive officer of a small bank. But you wouldn't know it by appearances. His wife, Marzena, shuttles their two young children to private school every morning. The family recently vacationed in Virginia Beach, Va., and likes to dine on Porterhouse steaks. Since losing his job, Mr. Joegriner, 44 years old, has had several offers. He's turned each down in hopes of landing a position comparable to what he held before. By Mr. Joegriner's own calculations, the family will be out of money in six months if he doesn't find work. "It will be D-Day," he says. "But on the outside, no one has any idea that we're in trouble."
Except for anyone reading the Journal today. Moving on, Chuck Hipsher can also empathize:
He met his wife at the ad agency, and the two had a $40,000 wedding. Kelly Hipsher, 32, was laid off in October 2007 and found out she was pregnant in February 2008. A week later, Mr. Hipsher's pink slip followed. Two months after that, the out-of-work couple moved to Greenville, S.C., to be closer to family and get a fresh start. Together, they had received about $60,000 in severance. "Now we have $600 to our name," says Mr. Hipsher. Although their rent was cheaper, Mr. Hipsher says the family continued to spend like before. They moved with three cars -- two BMWs and a Chevy Silverado. They continued to buy cases of $36-a-bottle wine. They spent $250 a month on a cleaning lady, and Mr. Hipsher dropped $50 a week on flowers for his wife. The couple still dined out regularly.
As can an asston of other people, apparently:
Mr. Joegriner and Hipsher are members of what might be called the severance economy -- unemployed Americans who use severance pay and savings to maintain their lifestyles. Many lost their jobs in 2007 and 2008, and thought they'd soon find work. Now, they're getting desperate. Last week, lawmakers passed a bill extending unemployment benefits up to 20 weeks. Unemployment benefits, which typically last about 26 weeks, were expected to run out for 1.3 million people by the end of the year, according to the National Employment Law Project.
But maybe there'll be some sort of divine intervention? Maybe Jimmy Cayne, as sort of tooth fairy character, will swoop in and pass out some money to tide everyone over? Are there really only two ways for this to play out? How can that be?
"There is an end date when that severance is going to run out," says Ellen Turf, chief executive of the National Association of Personal Financial Advisors. "At that point, the only life preserver is unemployment or getting another job....It's an awful situation."