fired

The Generation of the ‘Layoff Fund’

What are millennials saving for? Mainly getting fired.

I got laid off from my first job after just five months. My bosses assured me my impending unemployment had nothing to do with my work performance. It was a money thing, they said. It wasn’t personal.

I woke up at noon the next day sad and hungover — my former coworkers bought me so many goodbye drinks that I almost threw up in the cab. I called my mother, and she said, “It’s okay, honey. You’re in media. This probably isn’t the last time you’ll be laid off.”

Six months later, in June 2017, I got a new job. This time, I promised myself I wouldn’t be caught off-guard when the inevitable layoff arrived. And so, the second I got my first paycheck, I immediately started depositing money into my savings account, which I jokingly called my “layoff fund.” The amount of money I put away varied from month to month, but the intention was always the same: To give myself a cushion that would help me when — not if — I was laid off again.

My fears weren’t exactly unfounded. BuzzFeed, HuffPost, Vox, ESPN, Univision, Mic, and the New York Times have all gone through rounds of layoffs in the past year. Vocativ, in fact, laid off its entire editorial staff as part of an ill-fated “pivot to video.” After the New York employees of DNAinfo and Gothamist (for which I worked from August 2016 until January 2017, and where I first experienced the magic of being laid off) voted to unionize last November, the company’s billionaire owner, Joe Ricketts, shut down both publications altogether.

The grim job reaper returned in June, after exactly one year at my new job.

This time, however, I was prepared. Admittedly, my layoff fund wasn’t substantial — I had about $5,000 in the bank — but it gave me a level of material and psychological security I wouldn’t have otherwise had. It’s similar to Paulette Perhach’s “fuck off fund,” but instead of hoarding away my extra cash so I could use it to get away from an abusive boyfriend or a toxic job, I saved with the knowledge that someday, my job would tell me to fuck off. Similarly, it’s more purposeful than a vague, nonspecific emergency fund; it’s a way of preparing for a shitty situation that increasingly seems inescapable.

Lizzy, a writer in New York, also saves money in preparation of a potential layoff. “It’s definitely more of a general emergency fund, but the only time I’ve ever dipped into it was when I got laid off last summer,” she says. She currently has approximately $10,000 saved up between her 401(k) and her personal savings account. “My goal, maybe by this time next year, is to have six months of rent plus six months of spending money saved up. I’m not like, worried about my job, but you honestly just don’t know what’s going to happen.”

Obviously, layoff anxiety isn’t limited to people who work in media. Mark, a 26-year-old hedge fund analyst, tells me he’s scared of being laid off despite working in what’s typically thought of as a high-wage industry. “I’ve never been laid off, but layoffs are common, even if you’re doing your job well,” he writes over email. “I have many friends who were let go with zero notice, and it takes a good three to nine months to find another job. I also know of older friends of friends who haven’t been able to find jobs for years, or committed suicide over being let go.”

He says he currently has about $30,000 saved up, which would cover about a year’s worth of living expenses. “For what it’s worth, I’m not making a crazy amount,” he explains. “I’m super frugal and have student debt. I took a good hard look at the world and how I wanted to survive, and this is what I think has been the most optimal. It’s still not easy.”

Cooper Lund, an IT systems analyst, has a similar outlook. He feels like he’s in a better situation than many other people his age, but he also says that doesn’t absolve his fears of financial precarity. “I’m at the point where I shouldn’t worry about it, but I still worry,” he says. “There could be a disaster. It could happen at any moment.” He was laid off from his first job when he was 24. “The manager of the department said to me, and I’ll always remember this, ‘We’re going to HR, but don’t worry, you’re not in trouble.’ Then I got laid off, which is the definition of being in trouble!”

Lund explains that that experience made him afraid of being laid off again in the future, especially since he didn’t feel prepared for such an outcome the first time around. “I was saving [some money] because it was my first job out of college,” he says. “But I wasn’t necessarily thinking about it the way I did afterwards, where I started rationalizing my savings in terms of ‘How many months of a paycheck is this?’”

Such financial anxiety is common among millennials, a generation that came of age in the midst of the 2008 financial crisis. The oldest millennials, who are now in their 30s, graduated college at a time when unemployment rates were high and wages were low. Meanwhile, younger millennials watched their parents and their friends’ parents deal with layoffs and foreclosures. According to a 2017 report by the consulting company Bridgeworks, millennials who graduated during or after the Great Recession are still feeling its effects, both financially and emotionally. A steady decline in union membership has also weakened workers’ bargaining power when layoffs inevitably roll around. Add in outrageous healthcare costs and student loan debt — the average borrower owes $37,172 as of February — and you’ve got a perfect cocktail for financial anxiety.

The only silver lining? Chris Moon, a research analyst at the personal finance website ValuePenguin, explains that the Great Recession may have actually set up millennials to be better savers. “Poor economic conditions in the early part of the millennial generation’s earnings career has significantly disadvantaged millennials in terms of material savings,” Moon says, referring to a 2016 report by the Federal Reserve that revealed the median millennial savings account balance hovers somewhere around $2,000, compared to a national median of $7,000. But, he adds, “that kind of financial stress has also resulted in a broader awareness about the importance of saving. It also indicates that there’s a higher likelihood that millennials will prioritize saving on a permanent basis, even relative to previous generations.”

Of course, even if layoff funds are a sign of financial anxiety, they’re also indicative of relative affluence, especially since 40 percent of Americans can’t cover a $400 emergency expense, much less stockpile months’ worth of living expenses in case they lose their jobs.

As for me, I just started a new job not all that long ago. And so, I finally have money again to replenish my layoff fund. Because if I’m sure of one thing, it’s that I’m gonna need it sooner rather than later.