Tuesday, September 18, 2007

What? No Tears?

Thousands upon thousands of people are out of work due to the implosion of the mortgage industry. As of this writing 157 mortgage lenders have either gone out of business entirely or severely restricted operations.

Countrywide alone is laying off or has laid off 12,000 employees in just one round of cuts. In previous cuts it's laid of hundreds of others.

Washington Mutual is cutting about 1000 jobs nation wide.

BNC recently laid off 1200 employees.

I haven't done any sort of official count but I would guess there have been at least 100,000 mortgage jobs lost between lenders, brokers, loan originators, processors, title and escrow employees, etc. There are also an awful lot of real estate agents with a ton of listings on their books but no buyers. Lots of people in this industry are starving.

Usually when there are massive layoffs, there's a huge outcry about jobs being lost, etc., etc., blah, blah, boo-freaking-hoo! There's nary a peep about the mortgage jobs being lost by the thousands right now. Where are the usual voices crying out for help for these poor unfortunates that have lost their jobs through no fault of their own?

No one cares that mortgage people are now wandering the streets babbling to non-existent borrowers while pretending they still own a Blackberry and Bluetooth headset. Where's the love? Where's the compassion? More importantly, where are the Federal assistance programs?

The point is, these people will find other jobs. Unemployment is still low and the job market will adjust to absorb these additional workers. Some will move up, some will move down and some will find comparable wages. Some will start their own businesses and some just might end up homeless. How could our behemoth of a Federal government possibly be flexible enough to account for the different variables that go in to controlling the employment fallout from this or any other industry? Make-work jobs? That provides the wrong incentive. Cash payouts? Some would-be entrepreneurs might just cash those checks instead of creating businesses or go back to school for a different career or apply for more challenging jobs. And frankly, some of these people simply belong in lower paying, lower skilled jobs (**Full Disclosure** I work in the mortgage industry).

There could be another 100,000 jobs lost in this business before the bleeding stops and that's just fine. When the dot-com bubble burst lots of people that had no business in the IT world lost their jobs to attrition and overseas workers yet unemployment remained low. Those workers were absorbed back in to the labor demand pool then and the mortgage workers will get absorbed now. Next time you hear someone griping about layoffs, remind them of the IT and mortgage industry layoffs.