A 48-year-old friend with an engineering degree was recently laid off, along with 39 co-workers. Let’s look at the incentives that the government gives him.
He could sue his former employer for age discrimination (EEOC says that the law “forbids age discrimination against people who are age 40 or older”). However, the employer seems to have recognized this, for he reports that “I just signed a release in exchange for six months pay and six months health insurance.”
He could look for another job immediately, but points out that “They pay you $22,000 to not work,” and this entitlement (unemployment benefits) will be lost if he gets a job.
His wife has a high-paying job. If he returns to work and she sues him for divorce, she is on track to win the kids (97 percent of women become the winner parent in Massachusetts, which disfavors 50/50 arrangements), profitable child support, the house, and possibly alimony (if his new job pays better than hers). Suppose that instead he decides that 48 is his retirement age and does not obtain a new job. In the event of a divorce lawsuit, because he has been at home with the kids he improves his chances of getting primary or at least shared custody. This plus his lack of income reduces his exposure to a child support lawsuit. He may retain the house (he needs somewhere to live and doesn’t have any money). He can tap the wife for alimony.
I don’t know how it works in Mass, but my understanding is that, in California, if you cannot find a job which pays as well as the one you just lost (an almost certainty for anyone over 35), the child support folks will simply pretend you make your old salary for the purposes of child support calculations. I wonder why middle-aged men are shooting themselves in the head with such alarming frequency?
That probably only works if he has some time to establish himself as the stay home parent. Otherwise just because you’re unemployed and not making an income doesn’t necessarily prevent a judge from deciding that you could work and make the same amount and compute your child support based on that… You will just have to fork over your 401K savings every month.
Give your friend our condolences.
The positive is that he and his wife have a choice in how they want to proceed. Early retirement, career change or back to work.
If it’s back to work I recommend he hit the bricks immediately to find a new job. The severance will be over before he knows it and he’s not getting any younger. Job opportunities are out there now, but who knows what will be there in 6 months. Also the longer he is out of the employment rat race the less he’ll want to go back to it.
Not sure how someone could have survived on $22,000 every 6 months or how he managed to make so little with an engineering degree. Having said that, only saw 1 mobile app developer over 40 in SOMA.
Unemployment benefits may very well reduce an individual’s incentive to “look for another job immediately”. They also:
– cushion the financial blow of losing one’s job, reducing human suffering
– help buffer the downstream impact of a layoff (the landlord doesn’t lose rent due to vacancy, the Tae Kwon Do dojang does not immediately lose a student), helping the economy absorb the layoff and reducing the risk that one set of layoffs will trigger chain reaction layoffs
– Enable individuals and employers to make higher risk employment decisions helping to lubricate the economy
Jack, I think the $22k is his government unemployment benefits that are on top of the severance pay. The latter is a lump sum and is not counted towards unemployment.
Phil,
I do believe there is a limit to how long he can draw unemployment benefits. It’s not forever.
I hope he doesn’t know you posted this, it’s pretty nasty. Every marriage is not an alimony dispensary.
All the best to him and his family in his job search or new venture.