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The New Underclass

February 20, 2012 in job search, recession, recovery, unemployment by boxcarkids | 7 comments

That’s what they are calling the long-term unemployed.  The new underclass.  If you still have a job, at one time or another you’ve probably thought (or submitted a comment ), “Just get a job!”  If you still have a job, you might think the economic recovery, weak though it is, means that everyone who lost their job should be able to find a new one by now.  It’s not happening.

There are over 4 MILLION people who are classified as long term unemployed (people who have been out of work for more than a year).  We make up 40 percent of the unemployed.  We could fill the 15 largest football stadiums in the US and more than 2.5 million people would be stuck in the parking lots.  That’s a lot of people.

Employers are adding jobs, it’s true.  But it’s a fact that employers are also actively discriminating against the unemployed.  As this article from USA Today says “some companies — including PMG Indiana, Sony Ericsson and retailers nationwide — have explicitly barred the unemployed or long-term unemployed from certain job openings, outright telling them in job ads that they need not apply.”  This discrimination has become so obvious and widespread that some areas (e.g., New Jersey, Chicago) are proposing to ban companies from rejecting prospective employees based on current employment status or bad credit.

This issue is getting more attention lately.  Both this artice in the Business Insider (The Truth About the Long Term Unemployed) and this recent 60 Minutes segment (A new jobs program for people trapped in unemployment) do a good job of showing some of the people behind the numbers.  As 60 Minutes says, “These folks have been out of work two years, three, even four. They’re college educated professionals in their 40′s or 50′s; people who thought their company would take them all the way to retirement.”

The people interviewed for these stories used to belong to the middle class.  They had college degrees, homes, cars, and have had gainful employment their entire working lives.  Then they lost their jobs and their lives imploded.  They have applied for hundreds, even thousands of jobs.  They’ve gone back to school and ‘reinvented’ themselves.  They’ve networked and pounded the pavement, and are willing to take any job.  They just can’t find one.  And, seriously folks, it’s NOT their fault.

 

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Money Management – Part 1: The Big Picture

January 24, 2012 in economy, frugal living, job search, money, poverty, recession, unemployment by boxcarkids | 5 comments

When you have a small and sporadic income, budgeting isn’t easy.  To be honest, even when I was employed fulltime I was never the poster child for budgeting.  You know how we’re told by all the personal finance gurus that you need to have 6 months worth of living expenses saved in case of an emergency or lay-off?  At best I managed 3 or 4 months.  Periodically I got hooked on some new financial management software or gimmick and, as with exercise programs, followed it religiously for a few months before reverting to old habits.    Money management wasn’t really part of my education – it was one of those subjects that wasn’t discussed much at home and in school the only part of the curriculum that came close was learning to balance a checkbook in home economics class.

Nevertheless I was relatively responsible in how I handled my money – tucking some away in savings, never coming close to the extravagant credit limit on my cards, and paying my bills on time.  I did enjoy browsing through stores and sometimes indulged in a little ‘shopping therapy’ when blue or to mark special occasions in my life.  I had a laid back attitude about money because I had a healthy and regular income.

To say that’s changed is an understatement.  These days financial issues are my biggest stressor.  Nothing keeps me awake late into the night, or makes me as anxious and irritable as wondering about whether I’ll be able to pay the bills.  With over 20 million Americans out of work, I figured others are probably having the same concerns so I went looking for tips and advice.

The blog, Living ‘Poor’ and Loving It, caught my attention by virtue of the title alone as we are living poor and I’m not loving it!  Unfortunately the blog’s author’s three rules consist of 1) Have Very Little Money; 2) Live on it; and 3) Rule 2 will change your life if you let it.  These are rules for people who have some money but live as though they have more.  People who run up their credit cards buying things they don’t need but think they want.  People who need to pare down their expenses by not eating out, buying sporting tickets, and going on vacation.  The author says “My most important money-management tool hasn’t been figuring out how to get more but rather discovering how little I really need and how much I already have.”

Been there, done that. We passed this phase of living poor during the first year after I was laid off.  Thanks to unemployment benefits we were able to ease into being poor (although it didn’t seem like it at the time) and as I detailed in several early blog posts we learned to live with much less – in possessions, space and income.   We gave up eating out, going to movies, subscribing to cable TV.  We clipped coupons, shopped at thrift stores, and ate a lot of beans and rice. If we were careful we could afford small luxuries like buying yearbooks for the kids or eating out on a birthday night.  We made do.  It wasn’t easy but it was bearable.

Now we have entered (sunk to) a new level – with no guaranteed income, some fixed expenses, some variable expenses and the occasional emergency.  We very much live hand to mouth.  My income (mostly from writing and editing jobs and the odd sale of a cat bed) is uncertain, frequently comes in very small amounts and goes as quickly as it comes.  When someone pays you $30 and you have a quarter tank of gas in your car you don’t worry about trying to save – you just head to the gas station.

When I have a slightly larger payment or a windfall I always put aside money for rent, stock up on necessities and use part of it to pay forward on whatever bills I can (after getting caught up on whichever bills I’m behind).  I find that paying two months of internet service, or car insurance, for example, relieves some of my anxiety and a less anxious mom is definitely a good thing for the family!  But sometimes I’m too eager to get caught up and paid forward and am then caught short-handed when, as happened last week, the car battery dies and needs to be replaced or the computer crashes and needs expert care.  Then, with no credit or borrowing power, I need to borrow from the rent money, hoping that another job comes along in time for me to replace it.

I believe we are on the edge of moving from living poor, to survival living.  It’s a scary place to be – I don’t like the view from here.

Jobs and the Jobless Recovery

January 20, 2012 in job search, jobs, recession, recovery, unemployment by boxcarkids | 13 comments

A number of interesting articles about the job situation in the U.S. have caught my eye recently.  There are still millions of people out of work (13.1 million counted plus another at least 8 million workers who are not receiving benefits or are ‘discouraged’), a situation that has an increasingly detrimental effect on our society.  Consider it – over 20 million people who are not contributing to the income tax revenue that the government needs to fund services and projects; over 20 million people who are struggling to keep a roof over their heads and food on their table and who are taxing the very services that are now underfunded and overwhelmed.  Personally (naturally) I feel the job situation should be making more headlines than it is!

The articles that caught my eye were varied, each providing different information and insights about the current situation.  The first was an article on msnbc.com stating that jobs are going unfilled because employers cannot find appropriately skilled workers.  With so many people looking for work it is hard to believe that a skilled worker can’t be found for every job opening.  Nevertheless, over 50 percent of employers surveyed said that they cannot find the right worker.   This begs the question – do employers have reasonable expectations?  According to experts quoted in the article the answer is a qualified no.  Employers complain about the lack of skilled workers but at the same time they have decreased their recruitment efforts, lowered wages, done away with benefits (such as paying moving expenses) which might encourage workers to apply for a position, and are more reluctant to spend the time or money training someone for a highly specialized job.

In my job hunt I notice many of the position ads list very exacting requirements or exclude certain candidates.  Of particular interest to me, given that I plan to take courses in medical assisting in order to switch into a field that is still growing, is that most of the local job advertisements in this field are now stating that they will not accept applications from job seekers who do not have two to three years of experience.  One specifically declared “New graduates will not be considered.” This presents a quandary for someone looking to retool for a new career in middle age.  Is it worth spending sometimes substantial sums of money and potentially several years training for a new career if the field in which one is interested will not hire new grads?  Should we gamble on the possibility that hiring requirements will relax in the time we take to learn our new skills?

The second article in the Wall Street Journal contrasted the growth in company expenditures in machines (orders for new robots are up 41%) versus hiring (1.4% growth in private sector jobs).   Current tax incentives are making capital purchases more economical than in the past and companies that are not just stuffing their profits away in bank accounts are taking advantage of the bargains.  These tax incentives were created to help give the economic recovery a boost but aren’t necessarily having the intended effect.  Sure lots of companies are buying or upgrading equipment but many of those items are purchased from overseas manufacturers (nice for China’s economy) and in the end may result in more layoffs rather than additional hiring.  For instance Sunny Delight’s upgrade of their Littleton Massachusetts plant, currently in the works, will result in the shedding of around 40 jobs as more processes are mechanized.

The third article provided a glimmer of hope.  It discussed the beginnings of a trend of bringing jobs back from China.  It’s not patriotism or concern for the well-being of America that’s bringing jobs back from China, but the bottom line.  As China’s economy expands, more factories are built, and employers compete for workers, bringing up wages and the cost of the product, and at the same time shipping costs rise as concerns over Iran’s control over the strait of Hormuz and continued unrest in the Middle East drives up the price of fuel, and suddenly it’s not that much cheaper to manufacture your product overseas.  The authors of a study titled “Made in America, Again: Why Manufacturing Will Return to the U.S.” believe that by 2015 it will only be 10% cheaper to manufacture goods in China (which does makes me wonder whether wages in the U.S. will continue to drop).  At any rate bringing manufacturing jobs back to America will benefit all of us as more people return to work, pay taxes, spend their earnings, and keep their roof over their heads and their children fed.  Perhaps between factory upgrades and returning jobs we’ll be even more productive than ever!

 

PS – There was a follow up piece on the Apple jobs story in the NY Times that is worth reading.  Reader Tiffany asked how many of us would be willing to get out of bed at 3 AM and go into our factory job to make changes to an Apple product.  After reading this latest article on the working conditions in Apple’s factory in China I have to say that not only are they getting cheaper labor by moving jobs there, they are taking advantage of the workers and should be ashamed of themselves.  The working conditions would not be allowed here.

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