Posted: October 21, 2009
Lose the perks—lose more jobs
Scrutiny of corporate travel and events have hurt the economyJeff Thredgold
"You can't get corporate jets, you can't go take a trip to Las Vegas or go down to the Super Bowl on the taxpayer's dime," President Obama said last February in response to a question about financial institutions that had received TARP money holding lavish events.
Fair enough and quite appropriate
The problem is that additional Congressional criticism of companies and industry associations holding meetings or events, especially in Las Vegas or Reno or Orlando or in Hawaii, etc., has added tens of thousands of people to the unemployment roles.
These are companies and associations that never received any government funds but want to avoid any chance of criticism from the Congress and the media, those former hotel bell staffers, those former hotel and restaurant workers, those former flight attendants, those former cab drivers, those former travel industry employees of all types have suffered a one-two punch of 1) the "Great Recession" and 2) doing what is "acceptable" in the eyes of the imperial Congress.
Nearly 200,000 travel-related jobs were eliminated in the U.S. economy during 2008. Perhaps 300,000 or more positions will be lost this year. That equates to roughly 10,000 lost jobs per state -- people who are now unemployed.
The point is that the "AIG effect" -- wherein the insurance giant had a significant number of high-level executives travel to a luxurious California resort just a week after the Federal Reserve provided an $85,000,000,000 bailout -- has had unintended consequences that have led to tens of thousands of job losses.
Did I mention that Congressional spending on overseas travel has tripled in the past eight years, or that Congressional members are allotted $500 per day for expenses, can travel in either first or business class, and have very limited accountability as to the purpose of the trip or who they met with?
A recent story in USA TODAY notes that Las Vegas, Palm Springs, San Francisco, and Hawaii have experienced serious declines in people traveling to their cities for meetings, including a 26 percent decline in Las Vegas. The same story mentioned that "safe cities" such as Denver and Dallas are seeing future bookings rise, as companies and associations try to stay under the Congressional radar.
Did I mention that Nevada's current statewide unemployment rate is 13.2 percent, the second highest in the nation?
The story also mentioned the "Katrina effect," wherein New Orleans has benefited from companies and associations trying to steer business toward the city, with many attendees involved in community rebuilding while there. Detroit has also benefited from event planners promoting the city for meetings as a way to help the economy in a state that has seen total employment decline during each of the past nine years.
Other casualties of Presidential and Congressional criticism of business-related travel have been incentive programs within numerous companies. Wells Fargo was singled out earlier this year for Congressional and media criticism because a number of lower-to-mid-level employees had qualified for a few days at company expense in Las Vegas.
The National Business Travel Association notes that incentive programs are "two to three times more effective than cash at motivating employee performance." We all know someone, perhaps a family member or neighbor, who in the past had handled their job responsibilities professionally enough to quality for a perk from the company.
No more, and what a shame