Posts Tagged ‘Job Hunting’

Is America in a Recession or a Depression?

March 26, 2011 3 comments

Signs are Everywhere

In the hostel in Madison late one night a few of us were talking about the affairs of the day. I brought my reason for travelling-that is, documenting the depression in America. I was then asked “why do you think this is a depression?” I realized somewhat sheepishly that I have never publicly defended this point of view. So I will now. The available literature is somewhat unclear on the definitions of either term. But all the literature seems to center on the health of the Gross Domestic Product (GNP). But, I would argue that in an economy that has seen tremendous gains in productivity without the need to hire more workers, and that is capable having a “jobless recovery” as we are now, has to come up with a better definition, one that more accurately reflects the human costs of an economic crisis such as this.

I would suggest that we look instead at the true unemployment rate, at the foreclosure rate, at the bankruptcy rate, and at the rate at which small businesses are being forced to close their doors, among other indicators. We could also look at increases in the use of the social safety net such as food stamps, and the increase in homelessness.

A February Gallup poll finds that the official unemployment rate is at 9.8%, which is already quite high, but as we know, the official rate consistently understates the problem. It does not count the 99ers who have exhausted their benefits without finding work, or other “discouraged workers” who have simply given up. It doesn’t count the under-employed worker who lost a job that paid a healthy living wage but now works part time for far less. And it does not count the small business person who has had to close up shop and can’t find any paid work. I don’t know what the exact figure would be if these people were included in the unemployment rate, but I think it would be fair to say it would triple, giving us a rate of 29.4%.

A recent Real Estate Investors Daily states that the foreclosure rates have actually climbed in 2011 from a already alarmingly high rates in the last several years, and warns that “while we are seeing some markets in the US showing signs of “hitting bottom” and some are evening saying some markets have begun a “recovery“, I think we should be very slow and cautious to say the worst is behind us. Perhaps for those markets that had extremely high concentrations of the foreclosure activity (Nevada, Arizona, California and Florida) most of the damage may be done, but for other markets foreclosures are going to continue to put downward pressure on home prices.”

As for personal bankruptcy rates, numerous sources state that they are at a five year high and expected to rise in the coming year. Multiple sources also state that the poverty rate has gone up substantially, and this is poverty defined by an antiquated metric that does not reflect the actual cost of living in the 21st century.

That is why I am calling the economic climate in March 2011 a depression, and not the “great recession” as it has been termed. I may not be an economist, but there are some that agree with me. Columnist Jeff Cox quotes economist David Rosenberg in a 2010 article “Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.” And he is not the only one to say so. The fact that any economist is using the term depression, given the emotional charge of the word and the deeply conservative nature of that profession, should give credence to the feeling that is already shared by millions of Americans.


Unemployment is Not a Vacation

January 21, 2011 2 comments

There are those that believe that just because you aren’t going to work at a job every day, unemployment is like an unpaid vacation. This perception is very very wrong. First of all, when you are unemployed you are never really off work. You must be ever at the ready, in case something comes up. In addition, a formal job search can take up to forty hours a week. Then there are the networking events, those sponsored commercial get togethers, often disguised with a “party atmosphere” that are obligatory for the “serious” job hunter.

Juggling becomes a new way of life, as all the items in the expense column come up for review. This is the moment when serious mistakes can be made, if you use any remaining credit to cling to the old way of life. People you knew from work may fall away, as if unemployment were catching. Friendships shift.

Then there are the emotions: demoralization and self-doubt, fear, and boredom. Demoralization and self-doubt set in as the weeks, months, and sometime years go by without a bite. As the (situational) depression deepens it may be hard to get motivated for one more phone call, one more appointment. You have become the “discouraged worker” that we read about. The cold words on the page do no justice to the feelings behind them.

As the money left in the system from unemployment benefits and savings dries up, fear becomes a constant companion. Fear as the bills come in and it is necessary to decide what you are going to lose this month. First everything that makes life fun. Then the personal upkeep items such as haircuts and clothing. Finally, after cutting to the bone, there is nothing left to cut but shelter, food, and the phone, lifeline to potential work. There is the fear of the empty cupboard staring back at you, as you learn how to use food banks and food stamps, if you can get them. Pasta or potatoes become the main item in your diet.

Then there is the worst fear of all—fear of (god forbid) getting sick. Without insurance. Getting sick keeps you from looking for work, or actually working if an odd job should fall your way. And it costs money that you don’t have, or if you do you were going to use it to eat that month. You learn that small injuries and illnesses can be “worked through”. Even an infection can sometimes run its course if you wait it out. As your diet gets worse the possibility of sickness grows.

Finally there is intense boredom as it becomes apparent that everything there is to do except sit is too expensive. Driving, if you still have a car, becomes a forbidden pleasure. Gas must be rationed to get to interviews and networking events, if you still have the clothes needed to attend. Lack of money makes recreation an impossibility. As long as you have cable there is TV and then maybe Netflix. Of course television is very depressing because it represents a false reality where everyone has a wonderful interesting career and plenty of disposable income. The days seem unbearably long and begin to run together.

Finally, if you are lucky, coping skills take hold. Simple household chores take the place of other entertainment. Having become forcibly frugal, you realize that your own labor must take the place of money if anything is to get done. If you are lucky you have settled in a place where you can have a small life. A community has formed. You are very clear who your real friends are. They are the ones that are still talking to you. Family relationships may have shifted. You have found a way to put some of your unused skills to good use for barter or for a little cash, enough to make the much reduced ends meet.

One day you might look up and see the unbearable blueness of the sky, or notice the perfect way that the light from the setting sun is illuminating the mountains. Life will never go back to being what it was. But you are alive. And you are still a human being, now un-tethered to the machine. If you are not there yet it is my wish for you that you survive to see that day, and that the road treat you kindly. As Scarlett O’Hara said, tomorrow is another day. frugality blog a searchable list of food banks the stages of grief how to barter