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2 - A Culture of Fear

Every organization exists in a broader cultural context. If the problem of fear were true of only a few employers, certainly their employees would abandon them to find more pleasant and meaningful work elsewhere. It is only when things are bad all over, and employees sense that there is no place else to go, that a problem can become so widespread.

The Economy

The worldwide recession that began around 2007 has affected firms worldwide, resulting in fear on the global level - it was a crisis that affected all firms in all markets. (EN: The author provides a brief history of the crisis, which is incidental.)

The nature of the crisis was self-perpetuating. Firms seemed to forget that employees they pay are also the customers who buy their goods - so every reduction in payroll resulted in a reduction in revenue. This is not the case when one firm is struggling, but when all firms are struggling the result is a prolonged recession in which some consumers' income is eliminated and other consumers spend less out of fear that they will soon be unemployed.

The situation perpetuated for so long that consumer confidence was severely undermined - and even when there were signs of economic recovery, the media maintained an air of panic, such that customers held onto their savings rather than spending.

The crisis was largely one of credit: uncreditworthy people were unable to repay their mortgage loans, and the investors who had backed these loans were left holding the bag. Unfortunately, the investors included national governments and large corporations - but it is largely the panic that erupted, rather than the functional disadvantages to those investors, that caused the recession to be more protracted and severe.

Fear in the workplace

The global recession is an example of a global panic. There are many more localized panics that do not impact the whole world economy, but cause similar shake-ups within industries and firms.

Consider the impact of the industrial revolution: whenever a new machine was introduced, it eliminated many jobs: the various machines that automated the task of seeding cotton, spinning thread, and weaving cloth displaced many workers into economies that had no other work to offer. In more recent years, the desktop computer has replaced a fleet of typists, file clerks, and others who had previously been employed to handle paper documents. Recent advances in artificial intelligence and robotics have also created fears that entire professions will be eliminated.

Globalization and free trade have also had an impact. Consider that the US textile industry collapsed between the 1970s and 1990s as free trade agreements gave US customers access to cloth from markets where labor is cheaper. Most manufacturing jobs have also been eliminated or moved overseas. And in recent years, even white-collar jobs are being outsourced.

While these evolutionary steps generally have the benefit of providing cheaper products to US consumers, it also tends to eliminate the jobs that provide them with an income to purchase these products. And it may be decades or generations before the world economy sorts itself out such that labor markets find a sense of stability.

Until that happens, markets will likely be in a constant state of evolution - some changes will be slow and gradual, others quite fast - and so people will continue to feel insecure in their roles as employees and as consumers.