Money Talk Daily

Posts Tagged ‘unemployment’

Decreased incomes

Many people have been complaining over the past year that incomes are dropping. This is the truth for many people who already have jobs. There are people who are living on unemployment benefits after facing job losses. Incomes are dropping but not expenses. The fact is, that expenses have been increasing all the time. A marked increase has been seen in the prices of consumables, utilities and food. Development of cash management skills quickly is the need of the hour. Household budgets cannot be controlled without these skills and that, cannot be ignored. To maintain a semblance of control over your budgets, here is what you can do.

Prioritize Household Purchases

Every purchase you make will affect your household some where down the line. Planning your expenses effectively will take you a long way. Every dollar saved is a dollar earned and this should be considered. When planning your budget, include basic goods and services. Your cause will be helped by ridding yourself of any thoughts about luxuries. These should be made to wait until you can afford it. You must leave out every commodity that is not important out of your shopping list. Your impulsive spending will have been reduced, releasing your budgets for debt repayments, by doing this.

Look Around for a Better Deal

Markets are also facing the same strain everyone else is. Shopkeepers are looking to get more consumers walk into their stores. Discounts and offers are available at the drop of a hat, so look around before you start shopping. Start your day early to give yourself plenty of time for leisurely shopping. When you can find lower prices for things that you intended to buy anyway, your budget will also be trimmed to size.

Cut Back on Borrowing Funds

Borrowing money increases your household expenses, because they must be paid. Making the payments on the specified date will leave you short of cash for the month, which affects your entire household budget. Reduce all loans that you have, which includes those from credit cards and other sources. By making purchases in cash, you will know exactly what you have spent. You will also not be liable to pay extra charges you face if you default on payments in the future.

Reducing the Costs of transportation

The average American household has two cars. The owners may be burdened with car and gas payments, while this may look impressive to others. It may not be a practical solution to suggest that families reduce the number of cars they have. The use of these cars can certainly be cut down and this should be looked at. Using public transport, or even signing up for the use of car pools can help bring these costs under control. Use the cars, if the need arises, as situations cannot be compromised. Make an attempt at saving some gas by giving the cars a rest. You will be well on your way to get your budget down to the bare essentials. This will be of help to keep control over your budget. Living a debt free life in the future is what you can look forward to.

Bleak Outlook for those who are Unemployed The Numbers Paint a Grim Picture

We are all aware that money is tight for a lot of people these days, but somehow when the actual statistics come out it can still be quite shocking. A recent article by the Associated Press reports that over 20 million people in the US received unemployment benefits over the year 2009. The unemployment rate for the year reached a whopping 10 percent. It is easy to see why sales of many products are way down when one in every 10 people is out of a job.

It has been a Drawn out Struggle for Some

While there are not as many workers being laid off or let go as there were in recent months, many employers are still reluctant to re-hire until they see a dramatic upturn in the economy. Some who have lost jobs have been fortunate and found work again, even though some of them find themselves in new jobs that aren’t optimal. Lifestyle adjustments are often required, and people who have taken on casual jobs just to stay employed should feel lucky to find work at all. Among those that are jobless, 5.8 million were unemployed for over six months. This circumstance can take a toll not only on the pocketbook, but also on a person’s pride.

The Vicious Cycle

With so many people out of work or working low paying jobs, there is little money being spent. Businesses relying on sales of some sort are struggling to get customers. They can’t hire any more people, because they can’t make enough money to pay them, and they are forced to keep an eye on longevity instead of hiring a few more people in the here and now. Also, the government stimuli are beginning to run out, so there is less money for businesses to work with. Consumers are unable to spend, and companies are unable to hire, which makes the economic crisis geared for a longer period of time.

Just how Long will the Crisis Last?

The unemployment rate is showing signs of declining, but not at a speed that most of us would like to see. Experts are estimating that within a year’s time the rate will be above 9 percent, slightly down from the current 10 percent. With such a scarce job market the government has been forced to extend the term of unemployment benefits beyond the usual 26 weeks several times in 2009 and will likely have to continue to do so, otherwise millions of people will be left with even less to spend.

Job Competition is Fierce

If you are one of the many Americans who is unemployed and looking for work the odds are definitely not great. It is estimated that for every open job there are six unemployed candidates. There obviously are other people to consider. This doesn’t include people that are employed but looking for full time or better paying opportunities.

Try to Remain Positive

It can be tough to stay optimistic is such trying times. Taking a casual job can be humbling, but take comfort in that you are at least working. Try to think outside the box. If you have skills for freelance work, this is a good time to put them to use. Companies are far more likely to offer freelancers work than regular employees in tougher times. The internet has a lot of opportunities open online.

The new face of joblessness

Today, the unemployed sector cuts through a very broad cross-section of the country. Since late 2007, some 8 million jobs have vanished, and the end is not yet in sight. The ranks of the unemployed have now swelled to nearly 16 million people.

In the past, recessions have mostly hit blue collar and low level retail jobs, and white collar layoffs accounted for about 30 percent of job losses. By contrast, the current recession has seen 50% of the lost jobs be from managerial, professional, and skilled white collar positions. Workers in the upper echelons that are scrambling for cash now, the current recession has changed the world overnight.

Who has been hardest hit?

Past recessions hit minorities the hardest, and this hasn’t changed. According to current Labor Department statistics, the nationwide unemployment rate in November was 10%, but joblessness among African-Americans, for example, was 15.5%. Interestingly enough, the unemployment rate for men is 11.9%, compared to 8.1% for women, the widest unemployment gender gap in more than half a century. Older workers are being laid off at a faster rate than younger workers.

Are unemployed people finding new jobs?

The unemployed are staying that way for unusually long stretches of time. Almost 25% of jobless people have been unemployed for over 6 months, the highest long term unemployment level since the Great Depression. That 25% long term unemployment figure doesn’t include “discouraged workers” – people who have given up, and those who have settled for part time work. In hard-hit regions of the country, long stretches of joblessness coincide with elevated suicide rates, mounting depression, and family conflicts.

But aren’t layoffs cyclical in a recession?

In most recessions, job losses are from temporary contractions from industries and bussines producing more goods and services than can be absorbed. Losses, therefore are cyclical in nature. Typically, businesses lay off employees until demand picks back up, and then start hiring again. The current economic downturn, however, is more foundational; that is, some industrial segments appear to have undergone permanent shrinkage – home construction, vehicle manufacturing, and newsprint publishing, for example.

New-home construction busts amid the housing crisis across the country have shifted many construction-worker families from affluence to poverty, or at best, survival mode. It’s difficult to believe that home construction industry will ever see boom years again. For that matter, there’s no reason to suspect that vehicle manufacturing will ever return to a glorious era of unthinking tunnel vision, or that two-inch-thick newspapers will ever again grace the breakfast table of every American home.

How do long term unemployment sufferers get by?

They sell off cars, get rid of extra phones, cancel health club memberships, and bid vacations farewell. They scrounge for any income they can find. Most workers who qualify for unemployment pay receive about 60% of their former wages, but unless Congress extends their benefits, they expire after 26 weeks. But even unemployment benefit extensions eventually expire, at which point people may become eligible for welfare benefits and food stamps. A family of four might get $ 900 monthly, which can’t cover even basic costs like food, housing, and health care. From there, without family or friends to help, it’s a short jump to soup kitchens and private charities. Those experiencing long term unemployment face prospects that are grim.

Will new jobs be created?

It’s an unanswered question. Some politicians are anxious to spend more to salvage shrinking industries, but that’s more of a stop-gap than anything. And there is talk of replacing shrinking industries like vehicle manufacturing with “green” industries that will create a new economic boom, but turning such talk into reality would require billions in private or government investments as well as more years than today’s unemployed population can even hope to live. Not all displaced workers can learn new skills quickly. And even for those who can, chances are good that they won’t be returning to any semblance of their former pay. This is especially true for older workers or those who have extensive experience in specialized fields.

Will current job losses become permanent?

It is a sad thing to admit that many people who have lost jobs in the past year or two may never return to their former occupations or ever again reach their former income levels, but there seems to be no immediate way to avoid such a conclusion. Barring the unforeseeable, like a whole new economy arising, we are likely to have an unprecedented recessionary shift to permanent job losses.

There’s no shortage of conflicting economic news is there? “Green Shoots.” A “U Shaped Recovery.” Layoffs slowing. Unemployment rates still ticking up. More banks expected to fail. The Chinese fed up with holding dollars.

It is very easy for any of us to latch on to the news we want to hear. If you are long the stock market you love to hear news that corporate profits might rise. If you are in construction, news of possible increases in building permits brings a good feeling. There’s nothing wrong with rejoicing over good news. The problem is when we tend to tune out news that is not so appealing.

I do not believe the near-term economic future is one that is uniformly rosy. I do believe political forces desire to massage statistics and reports to further political agendas. Good sets of economic data are not easy to come by making accurate forecasting difficult. This is nothing new. This is also one reason why forecasts are all over the place.

But this is not a blog set up to focus on the negative. It is a site, the purpose of which, is to enable participants to succeed financially regardless of what happens economically. And it is my position that one of the best things an individual or family can do is build extra streams of income and learn how to slam the breaks on unnecessary spending. Call it a form of “financial insurance” if you like. If the good news is correct, you’ll have extra cash for a really fun vacation. If the news is really awful, you’ll have extra cash to keep food on the table and your family secure. What’s wrong with that plan? Nothing, other than it does take some time and work.

Let’s get busy.