A Write up on the Movie "Up in the Air (2009)"

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By: Iliyas Ismail

    What role did the government or relevant authority play in the economic lives of the characters in the movie?

In the movie, there was not much mention of the government and how the government’s fiscal and monetary policy affects the characters specifically. We are only presented about the characters and how they deal with their lives and each other, and how they go through the effects of government policy. However, we can infer, from the layoffs that occurs by companies, that these companies are affected by the unfavorable economic conditions of the country.

The main characters’ job in the movie was not just firing one or two employees at a given time, but they are invited to conduct a dismissal program for a list of many employees in the organizations. This shows that the economic condition of the country is not doing very well at the time, that leads to many companies downsizing. This is strengthened by Mr Craig Gregory’s statement at their meeting to introduce Natalie, when he mentioned about the bad economic situation of the country, stating that the housing, auto and retail industry is struggling to cope.

The company that Ryan works with thrives in this kind of environment. As more people are being fired, his company will be called in to do the job of letting people go. This shows that the government’s economic role is very important in determining how well the company would be doing for itself. In a way, the worse the economy, and the more that companies are downsizing, the better Ryan’s company will become. An auto company, in the beginning of the show, was said to have wanted to reduce its budget by $10,000 and the job was awarded to CTC to do their job of downsizing. A rather inverse relationship between the two.

Whether the unemployment in the movie is categorized under frictional, structural or cyclical unemployment, the government will have to manage on reducing unemployment rates of the country and achieving full employment. The movie does not discuss or mention on what were the types of unemployment that was dominant at the period but we could infer that it was a combination of the three.

Frictional unemployment

Many of the people who fall under this type of category will have been fired and will not stay in this situation for very long, for in a matter of months they will have been able to find another job. With the guide of CTC, and seeing that many of the fired employees have many years of experience before being terminated, it is very likely that most of the workers will fall under this category. Whether the staff will eventually move to higher paying jobs or lower paying jobs, income of the staff household will change, and the GDP of the country will be affected. The government needs to pay close attention to this development to help create jobs to maintain frictional unemployment is the dominant type of unemployment.

Structural unemployment

This is related to the mismatch between jobs available in the market and the skills of workers and their locations. Since automation and technological development is being preferred by many companies, including Ryan’s companies, this would also be another major reason for the termination of many employees in the movie. Government would need to provide jobs to people in locations of rural areas to address the issue of geographical factors of unemployment.

Cyclical unemployment

This unemployment has to do with the recessionary phase in the economy and is likely having the most to do with the movie, as stated by Craig Gregory.

Companies business cycle can be depicted in the below graph

                                     

Figure 11: Business Cycle

Business cycles are the results of many factors including unexpected changes in demand and supply, political factors, financial instability, major innovations and others. The government must ensure that for its part, they have to control their fiscal policy including government spending and tax rates to control the economy.

Looking at the role of authority, we can discuss on the role that Gregory, owner of Career Transition Counselling, shows in the movie. As a character, he is somewhat respected by employees and displays leadership in his character, although seen having a casual and cordial relationship with Ryan Bingham. Though he is concerned with the economic situation of the company, with high spending in their operations, the company has been running its operations in such a way for some time. Ryan Bingham was already in the company for many years and was able to collect many miles in his frequent flyer program before it was decided that the company should be more cost wary.

The management of CTC finally mulled on the idea to put a stop to the practice for cost reduction purposes. However, at the end the practice was reverted back according to the decision of the management. As heavy handed was the decision to put a full stop to the practice of having staff return back and stay at the office, they eventually went back to their old ways of having a high cost of running a business.

5.0 How would the movie have been different if the main characters were trained economists, or had strong economic understanding?

This section will discuss an alternate movie sequence plot if the characters had a deeper sense of knowledge in the field of economics. We first look at the economic conditions of the company. The major part of the story for the company is when they decided to adopt a new approach to their method of firing people using technology. The company was incurring high costs in maintaining 23 people constantly on the move to various locations in the United States, terminating employees. The move to shift the employees to just using internet based communications technology would have reduced their expenses by 85%, which would have been a remarkable saving to the company budget.

The company should have considered prolonging the internet based method of termination, and diversifying staff with other jobs as well. The capital budget reduction would be on food expenses of $40 per meal, fuel, flight tickets, insurance premiums and accommodations. Craig has noted during his meeting with Ryan shortly after their company meeting, that well established companies such as Coke and IBM has been using this method of terminating their employees for some time and was successful in doing this.

This would make the question of opportunity cost to appear. What would be forgone if the company were to pursue Natalie’s idea instead of the status quo. For one thing, it would be the employee’s happiness and satisfaction in being able to travel on a constant basis. However, it makes more economic sense to adopt Natalie’s idea, judging by the major cost reduction that it entails. Coke and IBM should serve as a model for them to learn.

The cost associated to a company includes fixed, variable cost and total cost. The fixed costs are the office rental, equipment and insurance premium among others. Aside from this there are the variable cost, the cost that changes as the firm’s output changes. This variable cost is the cost that is being focused in the story to be reduced, which refers to fuel, transportation, labor, accommodation and so on. To Craig, recognizing the variable cost is very important as this allows the company to identify which cost can be targeted to be changed.

The problem lies at the choice of employee. Natalie was a young, new and inexperienced staff who recently graduated from university. Despite this, she was given the responsibility to lead the transformation of the company, by introducing the idea to the company in the early part of the movie, and eventually training and guiding other staff near the end of the movie. The project collapsed, when Natalie quit the company due to her bad experience. The company should have also had experienced staff who has had background in both transforming company policy before, to work together and guiding Natalie in the process. This would have helped Natalie remain longer and continue her transformation when she does quit.

It is highly important to note that the staff that committed suicide in the movie, was not fired through Natalie’s method of video conferencing, but decided to do so after going through a face-to-face termination meeting. It is not a yardstick to judge the effectiveness of the new method.

Second, on increasing the job roles for Ryan Bingham. Indeed, termination consultant companies in general do not specialize in terminating employees as their only job scope. (Rogers (2010), Diffin, (2010)). They will also need to handle other Human Resource tasks and duties for a client company including the handling of payroll, company benefits and other responsibilities. In many cases, they would also be involved in the training of managers to assist them in firing the employees themselves, working as a consultant for the managers to deal with the aspect of downsizing and which employees to terminate.

Ryan Bingham’s only job scope is to show up at a company, fire people and leave afterwards without either seeing the recently fired employees again or the company again. This results in very high cost, if the purpose is to do only that. If Ryan’s job scope could be expanded, this would make a difference to the company. If he is to do the following up with the fired employees, and actually assisting them in the program of termination, this would reduce the need to have other employees in CTC to do that job, that is, if they have such a position in the first place. Many other consultants interviewed have also observed that Ryan’s job scope is too limited to be sustainable (Diffin, 2010), which seems to be the case.

Secondly, by handling other aspects of the clientele such as HR administration assistance and actual consultancy, Ryan Bingham would be more utilized instead. The issue of labor specialization might come into a play. If more employers are employed, then roles could be more evenly spread, and a staff could focus more on one job and specialize in it instead of doing multiple tasks and may not excel in any. This applies to this case as well, however, we are not discussing on burdening Ryan Bingham with various tasks that he would not be able to finish. Ryan is constantly travelling, and in the movie, he is depicted as only conducting layoffs when he arrives at the company.

The time period between travel, in accommodation and in flight, could be utilized for him to conduct other Human Resource based tasks so that the cost of maintaining him would be offset by revenues on his other responsibilities to the third-party companies.

What we would see eventually in an alternate plot, is Ryan Bingham being more than what his role currently has for him, and having less cost for the company, though possibly also less time for him to hold his motivation seminars due to his would be alternative job scope. The project would also be seriously considered and not put on hold, with Natalie and another senior advisor guiding through the process of transformation and Ryan will be depicted at the end, at his office desk.

6.0  Conclusion

Up in the air is a movie about two people with two different principles and philosophies of life working together and discovering how far could they hold their views when challenged by external changes. Ryan was going through life comfortably, before he met Alex and Natalie, both of whom shook his foundation of not wanting a life partner, and not wanting to settle down. Eventually, Ryan learns that his life is his alone and he could decide what is right for himself. 

We have extracted several economic concepts from the movie, namely opportunity cost, unemployment and labour specialization, and discussed how these they have played out in the movie in the lives of the characters. It is seen that such concepts are very important in people’s lives. We have also seen how the movie could have had an alternate ending by considering how being more attentive to economic concepts could have an impact on the outcome of the movie.

Iliyas Ismail is a financial analyst