Where Will American Airlines Laid Off Employees Go? Nowhere

American Airlines Group Inc. (NASDAQ: AAL) will lay off 5,000 people. The airline has been crippled by the sharp decline in travel. It mothballed its planes and needs help from the federal government to survive. Most of the employees being let go are support staff, along with some managers. Based on their skills, they are unlikely to be hired anywhere. They will enter an economy already awash with millions of unemployed people who do not have skills to get some of the dwindling numbers of jobs left in the American economy.

Management and support staff people at airlines cannot go to other airlines. There is no lateral move for workers in an industry in which every company is in trouble. It will take months to rebuild these other carriers, if they survive at all. Laid-off workers will have to seek work outside the industry. They will need to make the argument to management in other industries that what they have done at American can be transferred. Of course, few industries are hiring, and most companies will want to bring back their own people who have been put out of work.

Boeing Co. (NYSE: BA) announced it would cut 7,000 workers. American is a Boeing customer. Boeing has suppliers that have laid off people, too. This cascade across the air travel industry could easily affect 100,000 people. If air travel does not return quickly, the firings will become a rolling set of events, as airlines fire workers, commercial jet companies cut jobs and their suppliers eliminate jobs as well.

A Boeing worker is probably not qualified any more than an airline worker to find another job. The people who are pushed out of these closely related industries may not find work soon, if they ever do.

The American Airlines example is telling, and it is being repeated in other industries. No job leads to no job.