Layoffs and unemployment discrimination: a new stigma

Abstract

PurposeThe purpose of the paper is to discuss and seek a better understanding of the stigmatization of unemployed workers who have been laid off.Design/methodology/approachThis is a conceptual paper which addresses the factors that affect stigmatization and resulting discrimination against laid‐off individuals such as minority status, age, labor markets, job level, and length of unemployment. Issues of categorization and stereotyping of laid‐off workers are explored.FindingsThe increased use of layoffs by organizations has created a large class of unemployed workers who, rather than being seen as victims, are perceived to be deficient in their skills and abilities. This stigmatization is seen as more detrimental to laid‐off minorities and older workers as well as those who have been unemployed for long periods of time. The amount of discrimination is likely to be affected by the job market and level of job.Research limitations/implicationsPropositions are developed to examine the factors affecting the stigma as well as moderators affecting the relationship between the unemployment stigma and discrimination.Practical implicationsOrganizations should examine their HR policies and practices regarding the unemployed seeking jobs. Discrimination against the unemployed may result in long‐term unemployment that may have enormous human costs.Originality/valueThis paper highlights the ways in which being laid off now stigmatizes an individual and may significantly limit his/her ability to secure future employment. Since there are no legal restrictions on discriminating against the unemployed, organizations may systematically screen out applicants who are not currently employed.