Economic Stress and Job Insecurity

“To do nothing may be to be nothing for many Americans.”
– Judge and Hulin (1993)

In an era of record unemployment, massive layoffs, and a sluggish economy, many of today’s workers face the economic stressors of unemployment, underemployment, and job insecurity. Although each of these three stressors is conceptually distinct, they do have similar antecedents and consequences associated with them. As the quote by Judge and Hulin above suggests, a person’s job is one of the most important mechanisms through which he or she gains a sense of identity. Whether that job is threatened (as is the case with job insecurity), compromised financially or with respect to status (as is the case with underemployment), or lost (as is the case with unemployment), theory and empirical research overwhelmingly suggest that the resulting consequences are significant, negative, and widespread.

The purpose of my research in this area has been to develop an integrated model of economic stress. Specifically, I am interested in understanding factors (individual, job-related, and organizational) that lead to the perception of economic stress and job insecurity among employees. In addition, I am interested in the process by which job insecurity results in a variety of employee outcomes such as decreased job satisfaction – yet increased productivity – lower organizational commitment, higher turnover intentions, and more mental distress.

I have also become very interested in pursuing employee safety as an important outcome of job insecurity. Research that I conducted with a former undergraduate student showed that job insecurity is related to lower employee safety knowledge and motivation, less safety compliance, and more accidents and injuries. A follow-up study showed that this decrease in safety is also accompanied by a decline in employee emphasis on product quality. Interestingly, when threatened with layoffs, employees focus more energy on sheer production at the expense of safety and quality. However, our research also shows that while productivity may increase, creativity decreases. Thus, organizations may “win” the productivity battle, but lose out when it comes to employee creativity and adaptability.

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