How to never lose your job (a reprise)

By Neil Patrick

In January 2009, Grant Cardone put up an article in the Huffington Post with this title.

To put that date in perspective, this was about one year after the start of the global financial crisis and 8 months after the collapse of Lehman Brothers.

I agree with some of his observations, but we now have the benefit of hindsight on events which have seen the unfolding of the worst financial and economic crisis since the 1930’s.

And this has shown that Grant’s viewpoint fell way short of the mark. Even in 2009, it should have been apparent that we were dealing with something other than a cyclical recession. We were (and are still) dealing with a systemic collapse.

So let’s take a look at what he proposed. He said:

There are two groups of people that will never be without work;

1) those working for companies and in industries that are selling enough product to keep them profitable.

2) Those people within those companies that contribute to the selling, yes the selling, of the products and services of that company.

Those that are able to drive revenue through the selling of the products and services of the company are the most needed and valuable people in that company. Warning: Assist the company you work for in bringing in revenue (selling products and services) or you are at risk of losing your job!

Fair enough, but to say such people will never be without a job is a massive over-generalization. And he hinted at this when he continued:

The question is, who will lose their jobs and who will not? If you notice the people that are losing their jobs today are attached to companies that are failing! Note - if the company doesn't do well, make profits, jobs are lost! (my emphasis). The next level will not be from failing companies but from those companies that don't want to fail! (sorry Grant, but I never came across any company that wanted to fail).

What he missed was the fact that (and I don’t care about the labels that economists apply here) we are not dealing with a recession, when everything gets tough for a while and then bounces back. In a recession, companies make less profit and have to scale back some of their expenditure, whilst trying to lift revenue.

Today is different. We are dealing with a systemic collapse. And in a systemic collapse, companies don’t just struggle, they die. In large numbers. And people's jobs die with them.

And whilst companies are failing every day, that’s a symptom not the cause of the problem. The root of the problem is massive over borrowing by western governments. Plus endless QE programmes by central banks that continue to deflate the value of our wealth and earnings. Plus much needed, but unaffordable healthcare programmes. Plus an ageing population. Plus soaring food and utility costs. Plus rising house prices at least in some regions thanks to misguided government interventions (yes, that’s you David Cameron).

Compared to this, the problems faced by businesses are miniscule.

The massive and naive gamble of western governments is that while contracting government spending, they can simultaneously boost the growth of private sector businesses. And it’s just not happening. Because governments are useless at this. They launch expensive initiative after expensive initiative. Every one sounds great with all the spin at launch. And then a year or two later they are quietly shelved when surprise, surprise they didn’t work.

So we are trapped in a Catch 22.

Western governments cannot spend their way out of recession. Their currencies are losing value and their assets are dwindling whilst expenditures continue to soar. Government bonds (misleadingly also called gilts) are showing diminishing yields as investors place less and less faith in the security of such instruments.

You only have to look at the situation faced by Portugal, Ireland, Greece and Spain to see what happens when a government’s borrowing options dry up.

But back to Grant:

Those that will never lose their jobs are those that go beyond the normal expected responsibilities and the duties of their post. Those that creatively extend themselves and take responsibility for assisting the company in revenue creation will never be let go. The job of selling the products and services of the company you work, will no longer be left to the sales force but become the responsibility of everyone that desires to continue to work for that company.

Sorry Grant, this may be true in a recession, but it’s just wishful thinking in a systemic collapse. It is of course also completely irrelevant if you work in the public sector where revenue generation is completely disconnected from the success or otherwise of your employer.

What happened to all those top selling people at Lehmans, at Bear Sterns, at MF Global, at Northern Rock? That’s right they lost their jobs with everyone else. And the subsequent devastation of the whole financial sector meant that only a minority could expect to find another similar job with another employer. And if you think that banking is not typical of the world of real jobs, what about all those folk employed by Detroit City who lost their jobs and/or pension rights? What about all those staff at Woolworths, Borders, Aquascutum, Comet and countless other retailers that have gone bankrupt?

So if no-one’s employment can be assured anymore, what are we to do?

The first fact to get a grip on is that there is no such thing as a secure job anymore. It makes not a bit of difference how good you are or how hard you work, your future is never assured. So despite Grant’s opinion, my belief is that not even the best sales people in the world can count on anything anymore.

Second, if you accept this first fact, you need to be preparing right now for the day when you lose your job. That means getting your borrowings down as much as you can and building enough reserves to ensure you can survive for at least 6-12 months with no income. At least then you are giving yourself enough time to hopefully find another job somehow.

But what is a job? Essentially it’s the means by which you earn the money to live and hopefully enjoy your life. And being employed by an organisation is only one of the ways you can do this. The numbers of entrepreneurs in their middle and later years are soaring right now. And whilst many report that they don’t earn as much as they used to, almost all report that they are happier and more fulfilled than when they had a ‘normal’ job.

All this means preparing yourself for the possibility especially if you are over 50 years old that you may never get another job again. But that’s not necessarily as catastrophic as it sounds. It might just be the greatest opportunity of your life. And this is how you can make sure you never lose your job, because you will own your job and your vision for your life goals. Not someone else’s. But you should be thinking about it right now and doing what you can to start developing your ideas and plans, because when the hammer falls, your clock will be ticking…

The good news is we’re living longer. The bad news is we can’t afford it.

Here's a recent article from the Kansas City Star. It describes perfectly why I set up this blog. Baby boomers are facing the toughest test of their lives. And because all our hopes and expectations were set in an era when our futures looked entirely different, our education, aspirations and attitudes were founded on a whole set of assumptions which have failed to materialize. 

My question is what are we going to do about it? I sure as hell won't put my faith in the idea that anyone in government will come up with effective solutions, so we have to look after ourselves.
What do you think?

By Scott Canon and Steve Kraske


From the age of 23, when she was the first female steelworker at Butler Manufacturing, Diana Arends labored to carve out a solid middle-class existence.

Elbow grease and grit moved her steadily up a union hierarchy until, as a tool-and-die maker at age 59, she sat atop the union pay scale at Ball Corp.’s beverage-can plant in Kansas City.

Then came the crash of ’08, the closing of the plant and the start of hard times that look to define the remaining decades of her life - and tens of millions of baby boomers like her.

She’s worked just one year of the five since trouble gut-punched a generation just as a decent retirement seemed within reach. Her 401(k), the tax-sheltered account she’d been stocking all those years, was suddenly cut in half by the stock market dive and it hasn’t rebounded to where it should. By age 62, she was forced to tap into Social Security early. That meant that forevermore, her monthly check would be $600 lighter.

Now 64, she still looks for work that puts her skills to use and strikes out, concluding that bosses have little interest in a leftover from a manufacturing age. She lives with her daughter and granddaughter in a Lee’s Summit home that no longer has cable TV or a landline phone, that chills in the winter and toasts in August. The three will mine this newspaper heavily for coupons.

“I expected to be able to retire, take a camping trip now and then,” Arends said. “I didn’t expect to still be job hunting to supplement my income.”

A generation once warned not to trust anyone over 30, and that now has kids with kids, wonders if it can believe in its own old age. An implied bargain that promised security after decades in the workaday world looks, if not busted, mighty rickety.

Look now, five years after the fall, and the landscape looks uneasy and unfamiliar.

“There’s a whole new world out there,” said Ralph Monaco, a Kansas Citian and baby boomer.

Too many nest eggs got dashed in the 2008 cratering of stocks and home equity. Sure, things have bounced back … slowly. But half a decade of what should have marked prime, late-career earning years - from both investments and wages - all but evaporated.

Baby boomers were more likely to hang onto their jobs through the Great Recession than younger workers. Still, for those older workers who got laid off, the pink slips were especially devastating - forcing early and painful dips into retirement funds.

The still-employed also got whacked. Many saw company contributions to pensions, or matches to retirement accounts, evaporate. Wages stagnated or shrunk - at just the time in their careers that folks might expect to finally make top dollar.

And the lousy job market for young workers meant Junior’s inability to rise above barista extended his reliance on Mom and Dad deeper into his 20s - and their dotage.

“If you look at people 46 to 64, it used to be that that was the prime of your life, not only in terms of contentment and satisfaction, but also in income,” said Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research.

But not this generation.

“The boomers,” she said, “will be the first generation to do worse in their old age than their parents or grandparents.”

Shaky footing

Even before the crash, signs crept up that retirement years might not be so golden, or even reachable. Pensions increasingly lacked the full funding needed to guarantee the promised monthly checks. Although the federal government promises to backstop many of those pension funds, you didn’t need to be Chicken Little to imagine more collapsing accounts than Uncle Sam could field.

Meanwhile, fewer employers felt a need to tempt workers with the promise of a pension. And the Pepsi Generation that never tasted the bitterness of the Great Depression did relatively little to save for the rainy days of retirement.

In the still go-go days of 2007, the Center for Retirement Research at Boston College calculated that 44 percent of Americans nearing retirement were at risk of falling significantly short of their current lifestyles if they tried retiring at age 65.

Then in 2008, ordinary Americans began hearing about mortgage derivatives and other financial gymnastics. Suddenly, their home equity morphed into mortgage debt, their boss stopped pension contributions and 401(k) matches, or maybe their services weren’t even needed anymore.

In an eye blink, a generation’s retirement prospects turned from sketchy to crummy. By 2010, the number at risk of being unable to retire at age 65 had jerked up to 53 percent.

“The boomers are going into retirement in terrible shape,” said David Cay Johnston, author of “The Fine Print: How Big Companies use ‘Plain English’ to Rob You Blind.”

He’s studied pensions and America’s retirement systems for decades and concluded the Great Recession not only buckled boomers’ knees, it widened the chasm between the country’s haves and have-nots.

The laid-off and desperate found themselves forced to dip into stock-based savings when their values were particularly low. They were forced to cash out at the worst possible time. Those buying up those bargains — the wealthy — were the only people who had cash to spare. And it’s the rich who’ve profited from the subsequent rebound.

More work, if any

Meanwhile, a transforming economy of mergers and new-found efficiencies meant more workers got tossed to the side. That can prove daunting enough at any point in a career, but it’s especially tough for older workers.

“At this point in your life, you’re beyond the mountain climbing, beyond the time to make a name for yourself,” said Janice Lambert of Overland Park.

She’s 59 and laid off. Her employer merged with another company, was sold again and sold a third time - at which point it no longer had room for her.

She talks about feeling like a puppet, with distant financial forces tugging the strings that toss her future this way and that. To her, it feels like the puppet masters responsible for the 2008 financial crisis only got richer.

“It wasn’t supposed to be this way,” she said.

If she finds a decent job, she’ll likely stay in the workforce untold extra years to make up for lost time.

Baby boomers - a diverse demographic of nearly 80 million born between roughly 1946 and 1962 - peer into a time after work and see, well, more work. Assuming the workplace has room for folks who once thought of technology as a slide rule (look it up, kids).

The Bureau of Labor Statistics predicts that between 2008 and 2018, the number of middle-aged folks in the American workforce will jump by 33 percent. The number of workers 65 and older is expected to grow by almost 80 percent.

Little in reserve

Making it all sting a little more is that, as a generation, it’s not been a particularly frugal bunch.

Relative to their salaries and their lives filled with SUVs, 200-channel TV, beach vacations, boats and Botox, they’ve saved very little. On average, baby boomers waited until they reached age 35 before they even started setting aside money for retirement. By one estimate, even if they transform all their savings into annuities and max out reverse home mortgages, half the generation will see a marked drop in standard of living during retirement.

“We’ve lived beyond our means. We’ve used the equity in our homes for the last decade as cash machines,” said Daryl Eckman, a 59-year-old certified financial planner in Prairie Village. “We feel we have to live a certain way. … We feel we have to drive a certain car, put up appearances.”

If a friend his age has money, chances are Eckman is managing it. Their ledger, he said, usually reflects that even those with six-figure incomes live on the edge.

“The floor drops out on them very quickly,” he said. “They look to the government. They look to whatever the system will allow.”

Monaco is a 57-year-old Kansas City lawyer who feels he has little margin for error in his finances. He has diabetes and high blood pressure. He’s raised two daughters, and his retirement account won’t allow him to stop working anytime soon. He’ll keep working, he figures, as long as he’s able. If he’s able.

“I don’t see an opportunity for me to ever get out of the workforce,” Monaco said.

That necessity is, he said, partly the result of his own choices. He indulged his two daughters in childhood and insisted on paying for their educations to dodge student debt. He’s lived more comfortably, and less frugally, than his parents’ generation - a group sobered by the hard lessons of the Great Depression.

“I’ve got to pay for keeping up with the Joneses,” Monaco said. “We all seem to have to keep a profile, which is unnatural and unreasonable.”

If you’re not among the gilded 1 percent, it seems, there’s little reason to quit your job just because you’ve celebrated a 65th or 67th or 70th birthday.

Most Americans now calculate they’ll need a paycheck - either part-time or full-time - beyond the time when they can expect full Social Security retirement. (Depending on the year they were born, that falls between 65 and 10 months and 67.) A third will work to stay active. The rest will chase a buck out of necessity.

Longer lives, smaller funds

The good news is we’re living longer. The bad news is we can’t afford it.

This is where history reminds us that Social Security’s original retirement age was set when barely half of those who reached adulthood could expect to live to 65. Now, more than three-fourths cross that line. In 1950, a working man lived an average of seven years after retiring. A half-century later, a similar guy could expect twice as many years of elderly leisure.

In 1995, the average expected retirement age was 60. By 2011, it had been pushed back to 67. But life expectancy isn’t growing that fast. The difference in life expectancy between 1995 and 2011 is less than three years, not the full seven years that retirement got put off.

A Senate study in 2012 identified a $6.6 trillion retirement deficit - the difference between what people should have saved to maintain their lifestyles and the far smaller amount they actually set aside.

The fault is not entirely their own. They've seen the stock market cave in with some regularity - 1987, 2001, 2008, each time more painfully close to baby boomer retirement with less time to make up the losses. And each time making work harder to come by for the gray-haired workers.

“Our parents had mostly paid off their homes, had some pension or defined benefit. And Medicare covered most of their health care costs. None of those are true today,” said Dean Baker, the co-director of the Center for Economic and Policy Research.

“People still have pensions, but they’re fewer and dwindling rapidly,” he said. “Health care expenses … have exploded.”

His think-tank recently calculated the median wealth - savings, home equity, the works - of people between the ages of 55 and 64 at $170,000. That was about the same as the median home value.

“They literally have nothing left beyond the value of their homes. That means the only thing they have to support them is Social Security,” Baker said. “You’d like to think that people who spent their lives working would have some comfort in retirement.

“That’s going to be a questionable proposition.”

In that way, the Great Recession undercut so many boomers’ sense that they’d be rewarded for long years of work with a decade or more of secure retirement.

“A lot of baby boomers like me thought ... if we worked hard, got our homes paid off, have a little nest egg, we’d probably be doing more travel and enjoying it and spending more time doing community service,” said Tim Pickell, a 60-year-old attorney in Prairie Village.

Like a lot of people, he thought wrong. Much of a family inheritance was wiped out - the stock market tumble took a chunk, so did a need to make up for a slowed-down income stream from his law practice. That set off serious recalculations.

“The reality is,” Pickell said, “I have a lot of hard work to do.”

Arends, the once-successful steelworker, dreads as much as anything the anxiety of endlessly pinching pennies.

Her pension and badly depleted retirement savings must keep a household of three afloat. Indefinitely. She’d like to go to the movies, but rents videos from Redbox instead. She’d like to eat out, but scours a discount grocery for sales. She’d like to spoil her granddaughter, but rarely can.

“I worked hard. I’d like to work more,” she said. “But this is where I am.”


Read more here: http://www.kansascity.com/2013/09/28/4516374/great-recession-pummeled-baby.html#storylink=cpy

Is this 1937 or 1929?

One person I consider especially fortunate to have within my circle of friends is Andrew Ginsburg in NewYork. I admire his blog greatly (link to it from the foot of this post). He comes at the issues from an apolitical common sense standpoint and his concern for humanitarianism is always to the forefront. His post below highlights concerns that I share about the current economic situation in the US. 

You can also follow Andrew on Twitter here @GinsburgJobs
 
The point I’d like add to Andrew’s comments is that the only option left to many now is that of self-help. If the government is unwilling or unable to create jobs we have to create our own. I believe this isn’t as impossible a task as it might at first seem. Global communication networks have enabled much bigger things than this to actually happen – just look at the Arab Spring. What it needs is commitment and a willingness for individuals to share and help each other, rather than just ourselves. 

I’ll return to this topic in a future post , but for now here’s Andrew:

Is this 1937 or 1929?

by AndrewSGinsburg

It’s actually a great question but either one means bad news for the United States of America. Most people know about 1929 the stock market crash and the beginning of the Great Depression. What many people don’t know is that in the period from 1929 to 1937 the stock market rebounded, the economy looked good and everyone thinking we were out of any economic danger decided to put in place major budget cuts. 

 

That’s what happened in 1937, budgets were slashed, no more stimulus. Some people thought the economy had recovered. But it hadn’t. The budget cuts that were initiated in 1937 kept the Great Depression going until after World War 2. 

 

So where are we today, cutting budgets to continue the Depression we are in, or just at the beginning? It’s hard to tell. I am not an economist so keep that in mind while reading this. But, from what I have read from leading economists today we are in a situation of unprecedented long-term unemployment as well as an economy that’s shaky. Last quarter it basically broke even; this latest quarter the growth was below economists’ forecasts.

And, today we see our elected politicians looking for severe budget cuts. No cancer treatment for the poor? Is the U.S.A. a country where only the rich get medical care? The so called sequester is a disaster in the making. It cuts everything, from defending and protecting our country to cutting aid for education and medical care. That’s exactly what happened in 1937 which plunged the United States back into the Depression, which we had never gotten out of. 

What got us out of the Great Depression was WWII; during WWII, we spent as a country 3 times the GDP; which today would mean $45Trillion per year. People attack Barack Obama for his stimulus not working as well as it should have. Well, in a $15 Trillion economy, one push of $800 Billion wont do that much. Many economists predicted that at the time. And they were correct. 

 

Today our economy is in a Depression. Hiring has been so slow that it can’t keep up with population’s growth. Last month 500,000 people stopped looking for work. These people didn’t stop because they wanted to stay home and watch TV, or they wanted to live off the government (their benefits had long run out). They stopped looking because there are no jobs out there and people got sick of applying and rejected. You hear lots of stories about the unemployed having a lack of marketable skills; this used to be called on the job training. 

Speaking from experience I know that companies are not eager to hire people; they are not eager to take a well skilled worker and utilize their skills, no matter what the salary, they are more likely to over interview people and then not hire anyone at all. It’s really an extreme disaster for both sides. For the unemployed it can be worse than a spouse dying; they are more likely to suffer ailments that employed people aren’t. For companies, they are trying to make do with less; have fewer employees, fewer expenses and more profit. 

But that’s not the way it works in the big picture. Those that are fortunate enough to have jobs live in fear of losing them. You don’t get the best work from people when they are walking scared and afraid of being unemployed. What you do get is higher profits and CEOs with extremely high pay, because this quarter did well. No one is looking at the big picture, as to what companies and people will look like a decade from now. High riding companies will likely lose their CEOs as they move on to a better paying job. Every day employees are left with the mess senior management makes and are often blamed for it. 

 

So, 1937 or 1929? Austerity will kill all growth in this country and push us back into a deeper recession than we are already in. And it’s really a depression not a recession. If it’s more like 1929 we are in for a horrible ride. We are just at the beginning of a horrible economic mess. Yes the wealthy will be fine and are protected. Wherever you fall on the economic scale do you want to see your fellow Americans suffering and possibly dying because they don’t have income/cash? 

Its time to learn from history. What we did in 1937 caused tremendous pain. President Obama should be out there pushing for stimulus and jobs bills; like he tried to do with gun control. The GOP has been despicable in their obstructionism but that means Mr. Obama needs to work harder. We need more jobs for the 89 million people who are unemployed or who don’t earn enough to survive. 

Today is the day, we need to all come together to put every American who wants a job back to work. The cost will be minimal compared to the alternative.
http://andrewsginsburg.wordpress.com/2013/04/30/is-this-1937-or-1929/

In Hard Economy for All Ages, Older Isn’t Better ... It’s Brutal

 

By CATHERINE RAMPELL

Young graduates are in debt, out of work and on their parents’ couches. People in their 30s and 40s can’t afford to buy homes or have children. Retirees are earning near-zero interest on their savings.

In the current listless economy, every generation has a claim to having been most injured. But the Labor Department’s latest jobs snapshot and other recent data reports present a strong case for crowning baby boomers as the greatest victims of the recession and its grim aftermath.

These Americans in their 50s and early 60s - those near retirement age who do not yet have access to Medicare and Social Security - have lost the most earnings power of any age group, with their household incomes 10 percent below what they made when the recovery began three years ago, according to Sentier Research, a data analysis company.

Their retirement savings and home values fell sharply at the worst possible time: just before they needed to cash out. They are supporting both aged parents and unemployed young-adult children, earning them the inauspicious nickname “Generation Squeeze.”

New research suggests that they may die sooner, because their health, income security and mental well-being were battered by recession at a crucial time in their lives. A recent study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.

“If I break my wrist, I lose my house,” said Susan Zimmerman, 62, a freelance writer in Cleveland, of the distress that a medical emergency would wreak upon her finances and her quality of life. None of the three part-time jobs she has cobbled together pay benefits, and she says she is counting the days until she becomes eligible for Medicare.

In the meantime, Ms. Zimmerman has fashioned her own regimen of home remedies - including eating blue cheese instead of taking penicillin and consuming plenty of orange juice, red wine, coffee and whatever else the latest longevity studies recommend - to maintain her health, which she must do if she wants to continue paying the bills.

“I will probably be working until I’m 100,” she said.

As common as that sentiment is, the job market has been especially unkind to older workers.

Unemployment rates for Americans nearing retirement are far lower than those for young people, who are recently out of school, with fewer skills and a shorter work history. But once out of a job, older workers have a much harder time finding another one. Over the last year, the average duration of unemployment for older people was 53 weeks, compared with 19 weeks for teenagers, according to the Labor Department’s jobs report released on Friday.

The lengthy process is partly because older workers are more likely to have been laid off from industries that are downsizing, like manufacturing. Compared with the rest of the population, older people are also more likely to own their own homes and be less mobile than renters, who can move to new job markets.

Older workers are more likely to have a disability of some sort, perhaps limiting the range of jobs that offer realistic choices. They may also be less inclined, at least initially, to take jobs that pay far less than their old positions. 

Displaced boomers also believe they are victims of age discrimination, because employers can easily find a young, energetic worker who will accept lower pay and who can potentially stick around for decades rather than a few years.

“When you’re older, they just see gray hair and they write you off,” said Arynita Armstrong, 60, of Willis, Tex. She has been looking for work for five years since losing her job at a mortgage company. “They’re afraid to hire you, because they think you’re a health risk. You know, you might make their premiums go up. They think it’ll cost more money to invest in training you than it’s worth it because you might retire in five years.

“Not that they say any of this to your face,” she added.

When older workers do find re-employment, the compensation is usually not up to the level of their previous jobs, according to data from the Heldrich Center for Workforce Development at Rutgers University.

In a survey by the center of older workers who were laid off during the recession, just one in six had found another job, and half of that group had accepted pay cuts. Fourteen percent of the re-employed said the pay in their new job was less than half what they earned in their previous job.

“I just say to myself: ‘Why me? What have I done to deserve this?’ ” said John Agati, 56, of Norwalk, Conn., whose last full-time job, as a merchandise buyer and product developer, ended four years ago when his employer went out of business.

That position paid $90,000, and his résumé lists stints at companies like American Express, Disney and USA Networks. Since being laid off, though, he has worked a series of part-time, low-wage, temporary positions, including selling shoes at Lord & Taylor and making sales calls for a limo company.

The last few years have taken a toll not only on his family’s finances, but also on his feelings of self-worth.

“You just get sad,” Mr. Agati said. “I see people getting up in the morning, going out to their careers and going home. I just wish I was doing that. Some people don’t like their jobs, or they have problems with their jobs, but at least they’re working. I just wish I was in their shoes.”

He said he cannot afford to go back to school, as many younger people without jobs have done. Even if he could afford it, economists say it is unclear whether older workers like him benefit much from more education.

“It just doesn’t make sense to offer retraining for people 55 and older,” said Daniel Hamermesh, an economics professor at the University of Texas in Austin. “Discrimination by age, long-term unemployment, the fact that they’re now at the end of the hiring queue, the lack of time horizon just does not make it sensible to invest in them.”

Many displaced older workers are taking this message to heart and leaving the labor force entirely.

The share of older people applying for Social Security early spiked during the recession as people sought whatever income they could find. The penalty they will pay is permanent, as retirees who take benefits at age 62 — as Ms. Zimmerman did, to help make her mortgage payments — will receive as much as 30 percent less in each month’s check for the rest of their lives than they would if they had waited until full retirement age (66 for those born after 1942). 

Those not yet eligible for Social Security are increasingly applying for another, comparable kind of income support that often goes to people who expect never to work again: disability benefits. More than one in eight people in their late 50s is now on some form of federal disability insurance program, according to Mark Duggan, chairman of the department of business economics and public policy at the University of Pennsylvania’s Wharton School.

The very oldest Americans, of course, were battered by some of the same ill winds that tormented those now nearing retirement, but at least the most senior were cushioned by a more readily available social safety net. More important, in a statistical twist, they may have actually benefited from the financial crisis in the most fundamental way: prolonged lives.

Death rates for people over 65 have historically fallen during recessions, according to a November 2011 study by economists at the University of California, Davis. Why? The researchers argue that weak job markets push more workers into accepting relatively undesirable work at nursing homes, leading to better care for residents.

http://www.nytimes.com/2013/02/03/business/americans-closest-to-retirement-were-hardest-hit-by-recession.html?pagewanted=all&_r=0

Mechanics of a meltdown in European jobs

If you visit my site often, you’ll know that I think monitoring the economic situation is important. I could just post endless job hunting tips and news about job opportunities, but today the big picture is just so critical that I feel I must share this news too.

I’ve already posted about how and why I think that the Eurozone is approaching meltdown, and why the politicians will be ineffectual in reversing this decline. You may be doubtful of my analysis and I certainly hope it is wrong. So I have been looking for more data and insight into this topic and today I have decided to share with you a film that documents the severity of the situation in the Eurozone.

I was in two minds as to whether to post this - it certainly won’t provide an uplifting experience for anyone that views it (yep, that’s my health warning). But if you do want to know the real mechanics of what’s going on, this film has more data and insight than any news report or economics article I have seen. It’s heavy on stats – but excellently presented in an easily digestible form and thankfully devoid of rhetoric, opinion and political bias. So you are free to form your own judgement based on the data provided here.

From my perspective, the debt burdens in Europe (just as in the US) are unsustainable now. This means that the breakup or at least redefinition of the Eurozone will happen, it’s just a question of when. If the Euro survives in its current form beyond the next two years, I will be completely amazed. So the jobs outlook in Europe is looking increasingly bleak, but nonetheless bleaker in some places than others.

As I said at the start, I was in two minds about sharing this. On reflection overnight though I decided to go ahead because knowledge of what is happening and sharing this is vital I think. Whilst the prognosis isn’t good, I think understanding what is happening, where and how will enable you to make better personal decisions than if you didn’t have this knowledge.

If you’d prefer it if I stuck to the narrow path on this blog, please let me know!

PS I suggest you grab a coffee (or something stronger) before watching this.

My thanks and appreciation go to Stefan Molyneux and Freedomainradio.com for the production.

The unemployment crisis that lies behind the US monthly jobs report

By Heidi Moore

While pundits obsess about a decimal point, the real story is the 15 million out-of-work Americans cut loose by policy-makers

Friday brought a relatively good employment report. The economy added fewer jobs than economists had hoped for, but they were of good quality: most of them came from private companies, rather than the government.Construction did extremely well, as new houses are being built. Further math showed that the economy actually added more jobs than we thought it had in November and December.

It is tempting to call this a recovery. A number of economic indicators show that the economy is at least moving forward, rather than back. Housing is doing well, for instance. GDP, except for a blip late last year thanks to lower defense spending related to the fiscal cliff, shows every sign that it will continue to grow.

As much as the numbers move forward, though, there is some sadness embedded in them: we still have a joblessness crisis. And as long as the actual numbers appear to get "better", then it will not be treated like a crisis, but more like an inconvenience. For the duration of the US unemployment crisis, we have had no answers. No one is really working on any solutions to it except "wait and hope, and hope and see."

Note this glum start to the Bureau of Labor Statistics' news release today:

"The number of unemployed persons, at 12.3 million, was little changed in January."

Further down, something even more glum:

"In January, the number of long-term unemployed (those jobless for 27 weeks or more) was about unchanged at 4.7m and accounted for 38.1% of the unemployed."

Those figures tell the truth more than any other numbers do. Let's leave the jobs report behind and look at the jobs picture.

In the real economy, we still have a significant number of unemployed people – and more importantly, we have a core group of long-term unemployed people, who become more unemployable the longer they are out of work. There are another 2.4 million people who are "marginally attached", meaning they were "not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey."

If you add those marginally attached workers – those able-bodied, willing to work, and unable to find jobs – to the number of unemployed, it gets closer to 15 million people out of work. That's a crisis. And even while the Dow Jones Industrial Average rises to new highs – it hit 14,000 just today – big companies are still making layoffs. This week alone, mass layoffs of more than 50 people and up to 1,000 were announced at Time Inc, Disney, BAE Systems, Harman International, Viking Range, Amgen and Boston Scientific.

What makes it a crisis is that we don't seem to have any ideas on how to employ the unemployed. There are few, if any, ideas coming out of Washington. Corporate America, which still considers itself reeling from the recession, seems disinclined to pitch in – except for a few outliers like Starbucks' "Create Jobs for USA" program. No major retraining programs have cropped up (even if the unemployed, with their pained finances, could afford them).

Despite the nation's weakening infrastructure on roads and bridges and sewer systems, there are no grand plans to deploy laborers to fix them: plenty of experts believe that a boost in infrastructure spending could help us grow jobs again, but not much is moving on that front. No industry except construction seems to be adding jobs at a rapid enough clip to breathe life into the economy.

That's not very comforting. We can't be a housing-centered economy again. Haven't we grown up yet?

And those who are getting jobs aren't getting good, well-paying ones. Bloomberg economist Joseph Brusuelas pointed out that the lowest-paid jobs are going the fastest: "the composition of jobs continues to reflect the low-wage bias in hiring that is one of the primary characteristics of the current business cycle," he wrote. Additionally, at least 8 million people are working part-time because they can't get full-time work.

For young people, the picture is even worse, as nonprofit organization Generation Opportunity pointed out in their latest Millennial Jobs report. They estimate that the youth unemployment rate, the rate for 18-29 year-olds, last month was 13%; an additional 1.7 million young adults don't even count as part of the labor force, they point out, because they've given up looking for work. Terence Grado, director of policy at Generation Opportunity, said in a statement:

"My generation is suffering disproportionately … we need a new strategy that encourages the private sector to grow, invest, and provide real opportunities for the millions of young people who have great skills, are ready to contribute, and have waited long enough."

Grado has a point – not just for millennials, but for all of the unemployed in America. They're not really looking at month-to-month changes in numbers gathered in Washington; they're looking for some hope that things will change. That seems very hard to provide right now.

The Federal Reserve's low interest-rate policy has helped Corporate America rebound, and may have saved the economy at the high end, where banks and companies live. Now, though, it's time to buckle down and look for ideas that will move the needle on unemployment in regular households, where everyone else resides.

 http://www.guardian.co.uk/commentisfree/series/heidi-moore-on-business-and-economics

Robert Kiyosaki – How you can survive the coming financial catastrophe

I’ve provided a lot of posts lately here and to my Twitter followers which describe how the financial crisis is escalating. I’m very concerned about this because we baby boomers are particularly vulnerable. This is because of high borrowings, falling incomes, rising costs of living and increasing job insecurity.

But most of all we are vulnerable because we don’t know how to respond to these economic conditions. And that’s because the education system in the western economies hasn’t provided us with the right knowledge about how we can do this.

I wanted to get Robert Kiyosaki’s view on the current global crisis and what he thinks we can do about it. Here he describes at length (so grab a coffee before you hit play!) how he sees the next few years unfolding.


His prognosis is very similar to my own – we are likely to see a collapse in Europe, due to the unsustainable burdens of failed Eurozone economies on Germany and the ECB, whilst the US is setting itself up for further devaluations of the dollar by continued printing of more money.

But most importantly he describes how we can survive and prosper over the next 5-10 years if we start to think totally differently about how we see our place in the world and how we direct our careers in what is already a massively changed society.

Switzerland: More banking jobs to be axed - why it matters (revised)

By Neil Patrick

Credit Suisse cuts 300 Swiss jobs in local units merger

Here's more on the unfolding crisis in Swiss banking from my newsfeeds. Whilst 300 jobs being lost in the retail arm (ie. the 'everyday' banking operation, not the investment banking arm) of a major Swiss bank may not cause you any personal sympathy or worry, it's the implications which concern me. Until now, Swiss business has been more or less blissfully immune to the rest of the western world's economic woes.

You may very well not have any sympathy for these people; you may even think it's no less than what they deserve. But I think that misses the point (personally I do not think the people who serve me at the counter in my bank have any responsibility for the actions of other parts of their organsation and they certainly haven't ever been rewarded with big bonuses or even remotely generous salaries).

No, my concern is that if even the Swiss economy is now starting to wobble (as I reported here last week), it's a worrying sign that we are moving one step closer to the global economic meltdown I describe here

By Katharina Bart

ZURICH | Fri Nov 9, 2012 

(Reuters) - Credit Suisse (CSGN.VX) is to merge its retail and private banking arms in Switzerland from January, cutting 300 jobs at the Swiss bank to save 50 million Swiss francs ($53 million).

The restructuring is part of an extra 1 billion-franc cost-cutting campaign announced by Credit Suisse two weeks ago as it seeks to boost profits and strengthen its balance sheet.

The current head of Swiss retail operations, Christoph Brunner, will lead the streamlined unit, the bank said."I am convinced that we can fulfill our performance promise even more effectively with this move, ensure we are close to our clients, and ultimately secure and expand our market position," global private banking head Hans-Ulrich Meister said in a memo to staff seen by Reuters.

Meister's move will feed fears of a widening cull of Swiss bankers after domestic rival UBS (UBSN.VX) said last week that 2,500 of an overall 10,000 job cuts will be made in Switzerland.

UBS is winding down its fixed income business and returning to its private banking roots.

Julius Baer (BAER.VX) is also expected to cut some jobs in Switzerland as part of an overall reduction of 1,000 jobs, as it seeks to rein in costs following its purchase of Bank of America Merrill Lynch's (BAC.N) international wealth management business.

At Credit Suisse, Rolf Boegli, who is currently operating chief at the private bank, will lead a separate unit serving ultra-wealthy clients in Switzerland - typically those with more than $50 million in bankable assets - as well as asset managers.

The current head of private banking in Switzerland, Arthur Vayloyan, will leave Credit Suisse, the bank said. Vayloyan wasn't immediately available for comment.

Credit Suisse is targeting 4 billion francs in cost savings by 2015, up from a goal of 3 billion francs it set in July and an earlier figure of 2 billion.

The bank, which is already cutting 3,500 staff or 7 percent of its workforce, said job losses would be inevitable to achieve the extra savings, but until now have not detailed how many more staff would go.

"The lack of far-sightedness surprises us, given banks tend to be very resourceful when it comes to maximizing their profits," workers' lobby group Employees Switzerland said in reaction. ($1=0.9477 Swiss francs)

http://www.reuters.com/article/2012/11/09/us-credit-suisse-idUSBRE8A80U620121109