Pink Slips: First You, Then the Help

When Robert Morey, 43, was laid off in May from his $90,000-a-year wine industry sales job, he wasn't terribly worried about making ends meet. His severance package would carry him through September, and he had reserves in his checking account and stock he could sell if need be.

But by late November, the economic headlines had become increasingly gloomy. Worse yet, the Napa, Calif., resident hadn't been able to find comparable work and his stocks had become next to worthless.

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Like many Americans, Morey (who's now down to his last three unemployment checks and says he doesn't "have much of a fail-safe at this point") started slashing his budget: nixing Netflix, turning down the heat, skimping on holiday gifts, finding cheaper car insurance, trading sushi out for dinners in and putting the kibosh on his adolescent daughters' shopping sprees.

In an effort to save an extra $180 a month, he also passed along the pink slip he'd received, laying off his house cleaner of five years.

It was not an easy decision.

"Her daughter is my older daughter's best friend," Morey said. "The girls have been friends since they were 1 year old, and they are now 13. So it was difficult to tell her that I wouldn't be able to use her services anymore."

Morey did his best to give the woman as much notice as possible.

"It didn't come as a surprise," he said. "But since she has lost some other clients in the past few months, it didn't help."

The Second-Hand Pink Slip

Morey and his former house cleaner are no anomaly.

Last month, both The New York Times and Wall Street Journal wrote about the ripple effect of cash-strapped upper-crusters who've been laying off nannies, housekeepers and other domestic workers in droves.

But this isn't just a problem for the well-to-do and the domestic workers they hire. In the wake of a layoff, middle class folks with part-time baby sitters, dog walkers, yard workers, handy people and pest control services have to pass along hand-me-down pink slips, too.

Knowing full well the financial upheaval and emotional roller coaster a layoff can bring, many of these unlikely employment executioners find themselves saddled with guilt.

"No one likes to be the bad guy," said Ken Clark, a psychotherapist, certified financial planner and author of "The Complete Idiot's Guide to Getting Out of Debt" (Alpha Books, February 2009). "Guilt is a fear that our actions are going to diminish our value in someone else's eyes."

Sidney Clifton from Woodland Hills, Calif., can attest to that. After running out of severance pay in March, the laid-off television producer got rid of her gardener but held onto her once-a-week house cleaner (her "investment in sanity").

But figuring out whether and when to lay off the three-day-a-week baby sitter she and her screenwriter husband could no longer afford was another story.

"To say I've felt guilty feels like an understatement," the 40-something mother of four said.

For one thing, Clifton's 2-year-old adored the sitter, who'd been with the family 18 months. For another, the sitter was 28 with a toddler of her own, aspirations of returning to school and no other form of income.

At first, the Cliftons cut the sitter's weekly schedule down to two days a week and let her know they might need to lay her off soon.

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