Sunday, December 26, 2010

Job Loss in America

This essay is basically an update or addition to "America Reaps What it Sows", written a couple of years ago and archived on this blog. What's new, and the focus of this particular blog, is the plight of upper-middle class Americans who've lost their jobs in our Great Recession.

A great many educated, skilled, upper-middle class Americans have lost their jobs in the last couple of years, and are having a hell of a time finding anything even close to as good as their previous jobs. The TV show "60 Minutes" did a heart-wrenching story on this recently. Here are people in their 40s, 50s, and 60s who did everything right. They got college degrees, even Masters' and PhDs, and went to work for big, prospering companies, and moved up the ladder over the years. These folks were experienced professionals, middle managers earning $100,000, $150,000, $250,000 a year - and they had earned it!

They also earned the lifestyle that came with the territory. The 2500 sq. ft. house in a good neighborhood, the nice cars and SUVs, dining out a couple of times a week, kids going to expensive colleges, regular vacations to Hawaii and Europe - the good life. And now they're losing it all because after many months of unemployment, where a job at Target is the best they can find, their savings is gone, they're about to lose their homes, and they don't know what to do. And it's not their fault; they did everything right!

Or did they? I think maybe not. My thesis is that probably 80% or more of these folks bear a fair share of responsibility for their current situation. The vast majority, I contend, could have and should have done things differently, and wouldn't be in this pickle if they had. And this is more than just "Monday morning quarterbacking", where you look back with hindsight and smugly predict the past.

It is only prudent to live within your means, to save 10% or more of what you earn. This is not revolutionary thinking, this is common advice and has been for many generations. I'm willing to bet that most of these people didn't do that and instead - like most Americans - spent nearly 100% of their growing incomes, if not 105% or 110% (by racking up debt on their credit cards and borrowing against the value of their homes).

It is only prudent to be concerned about the possibility of an economic slowdown or depression, and to take steps to "recession proof" your career. Here's what I mean. Recessions happen, sometimes they're very ugly, and any educated person should know that. They should also know that some jobs are more secure than others. On the contrary, I suspect that the majority of these people felt their days of worrying about their careers ended long ago: they got the good jobs, now all they needed to do was put in their 30 or 35 years and then live happily ever after. But that wasn't very realistic.

In my own case, I left a lucrative career in the investments business years ago because, in part, I saw dark clouds in our nation's economic future and was willing to trade higher income for greater job security. So I became a teacher, taking a big pay cut, but knowing my job would always be there as long as I did what I was supposed to do. For years, lots of folks made fun of my decision as the economy kept moving forward and they raked in the big bucks, but you can imagine what has happened to a lot of those people in the last few years. He who laughs last....

Even more important is the concept of making yourself indispensable at your work site, the idea of - if your employer needs to let people go, make yourself the last person they're going to want to get rid of. How can you do that? From my years in the work world, and from what my wife - who was a manager with Union Bank - tells me, I know that many workers: show up late, call in "sick" too often, do the least amount of work they think they can get away with, do sloppy, low-quality work, don't care about serving the customer as much as they should, etc. In short, they act as if they are "entitled" to their jobs instead of grateful for them. Consequently, the rare employee who consistently does the opposite of these things tends to clearly stand out. He/she gets the promotions, will be the last one to be let go if times get tough and, should he/she have to be laid off, will likely get the most help finding a new job - "Hey Charlie, we're cutting back and I had to let Sue go, but if you're looking for a great employee, you should really hire her!"

Another way to make yourself indispensable is to keep growing professionally. Learn new languages, keep upgrading your computer skills, earn advanced credentials in your field, attend workshops to improve your interpersonal skills, etc. In my own case, I upgraded my Spanish skills in order to earn a bilingual teaching credential, became the first one at my school to earn national board certification, and the first to become an IB examiner. As a result, I'm a highly effective teacher, my students' test scores are impressive, I'm recognized in the school district for these things, and I'm confident that even without "tenure", my job is secure. If for some reason I was no longer needed at my school, I know that other schools would be more than happy to have me on their staff. People in other fields of work could have done the same kinds of things, making themselves ever-more valuable to their employers, increasing their "indispensability".

Do you imagine that most of those poor folks on "60 Minutes" - or most of the other Americans who lost their jobs and are now in a tough situation - had handled their money prudently, carefully chosen and/or modified their career choices and then done everything they could make themselves indispensable at work, in order to protect their future and that of their families? Again, and with apologies to those who did - I suspect that 80% or more did not and therefore, I'm not as sympathetic to their plight as most people are.

31 comments:

Jared Zisser said...

Hi Strebler,

I would first like to thank you for the great blog, i agree with a lot of what you say. Now i have grandparents like everyother student and in fact they differ from eachother by alot.
My first set of grandparents (on my dads side) take little to none of the goverments money, they own their own apartment building and a large amount of stock that continues to rise since they bought them. They go on trips all the time as they also have a good amount of bills to pay for health reasons.
On the other side you have my grandmother, she lives by herself and has very very little money. She didnt ever start a business, invest, or save much of her money. The reason why she can afford to go on trips is through government money and her children helping her with investing in stocks.
Both sides of grandparents i respect but the grandparents on my dad's side i respect the most. They have been good examples of what to do as you grow up. I know right now money and where its going seems to be the biggest issue right now but lets face it, if you individually have a lot of money, you probably don't need to worry about whats going on in the news as it really won't affect you money wise. The reason why most elderly people do not have a lot of money and need to worry about how the government spends it money, is because there whole life they may have been working in the wrong field. The only way to be financially free is to start a business, everyone has the oppertunity but few do it. Its easy to look back and blame others for you not having money, but its a lot harder to blame yourself for not taking the step towards financial freedom that you should have taken along time ago.

thank you for reading

Elizabeth Kenyon said...

For the most part, I agreed with what you wrote. I look at how my family did economically and I'm very glad that they saved the majority of the money that they made instead of spending it on anything they wanted. There have been at least three foreclosures in my neighborhood in the past years and most recently the house across the street ended up in foreclosures. I don't feel bad or sorry for these people because I'm sure that they didn't just spend their money only on essentials and tuck the left over money into a savings account. The majority of people just spend all their money and when they lose their job, there's nothing left. The majority of the people who lost their jobs most likely didn't do everything they could to keep their jobs. They probably did half the work that they were expected to do. Or they had climbed the ladder and thought that they was no possibility that they would lose their job. They didn't think of the possibilities and they and their families suffered because of it. My solution would be to spend money on what needed the most and put the rest of the money into a savings account or at least be smarter about spending money.

Joanna Garcia said...

I agree with your rationale; people should save money for the “what if”. In the United States a substantial amount of people regard themselves as superior than others with the same profession but in a different part of the world just because they are American, and I find this sentiment to be detrimental for the United States to be more competitive. If America was much more humble and competitive the jobs wouldn’t end up going to China or India where the quality is better for the price. Growing professionally is also important to maintain your job, just because you have a job doesn’t mean that you are set for life.

Kendra Romero said...

I guess I have to agree with your opinions, because it is true that those people could have done something to prevent it. Nothing in life is forever, so people need to not only be preventive, but they also need to be humble. My family went through a similar situation, and it is true that my parents dont have the same jobs, and that we dont have what we once did, but thanks to saving we are able to keep a good and stable life. This turns out to be the problem with many people;they don't save, and when they lose it all they expect a miracle. i think that people have to humble; accept the present,work towards the future and forget the past.

Dustin Pina said...

I believe that one controls his or hers destiny in life. Although some may argue that there was nothing they could do in order to prevent their job loss, I must strongly disagree with them. As some predicted this horrible recession, so could have others.
By not pursing the most stable career the people who were laid off can only blame them self. When the .com industries were rapidly increasing those who attempted to peruse a career in that industry overlooked the possibilities of the recession we are encountered with today.
I believe that many people in todays society don't know the difference between what they want and what they need and because of that greed we are faced with these difficult problems.
Growing up around successful investors through out my entire life I am consistently reminded of their success. Surrounded by the ups and downs of the stock market through out the last ten years I have personally witness the large quantity of money that can be made by wise decisions.. I am also constantly told to save the majority of money.
Like Mr Strebler I feel close to no sorrow to the people who have experienced bankruptcy.

Prince Pableo said...

Securing jobs in America is getting harder and harder and once successful businesspeople losing their dream job. That is the reality as the economy is losing money and employers seek international employees that work harder and are less paid than you, ultimately replacing you. This generation must now step up it up education and social wise. Be involved and open to new ideas and professions. The American people should now rise above the flaws and work even harder to achieve their goal, not being discouraged by such events.

Gianni Naranjo said...

What in the world is wrong with everyone these days?! Do they have no self decency? All of these people, who lived the "good life", relaxed and now are poorer than the hobos in downtown ought to know better! I mean really, they went to their expensive universities and got their high degrees but they never learned how to, oh i don't know, SPEND THE MONEY YOU HAVE AND SAVE SOME FOR LATER!!! People these days are so concentrated in living in the moment and spending money like it grows on trees that they don't realize, "hey if i spend all my money, I won’t have any more" DUH! yea great thinking Einstein’s. Why are people so greedy now a day? It’s all about money and the big houses with 20 rooms even if you are only one person. What is so wrong with a simple word known as SIMPLIFY. People don’t need to have seven houses with views of the beach. And yet they do and when they can’t afford the payments anymore, what happened to their twelve o'clock scheduled massages? Oh yea, they are gone along with your means of life. People just have to be realistic and Realize that things that are here today, can be gone tomorrow. I don't feel bad in the least for those people in bankruptcy because it was their own fault.

Emily said...

The people that work hard get the better end of the stick. That's always how it's been, that's always how it's going to be. This relates to school, since the people who work really hard get A's and B's and get into a good college, when the slackers who don't seem to care about anything are looking ahead to a gloom future. People that save and still lose- I feel sorry for them. But the people that don't seem to care about spending- they're wasting their time and their never going to succeed.

robin said...

I agree with this essay because it explains that it’s not always the economy’s fault that people are losing their job or home, some of the time it may actually be their own fault. As the essay says, most Americans spend a lot of their savings on buying a house and using their credit card to buy things they like. I think it’s perfectly fine for people to spend money on things that they want, however they should spend their money wisely.

robin said...

I agree with this essay because it explains that it’s not always the economy’s fault that people are losing their job or home, some of the time it may actually be their own fault. As the essay says, most Americans spend a lot of their savings on buying a house and using their credit card to buy things they like. I think it’s perfectly fine for people to spend money on things that they want, however they should spend their money wisely.

Pamela Crick said...

I never really thought of people losing there job as their fault. Society makes it seem like it's not their fault and honestly, I believed them.
After reading your blog, I have come to think more about myself as a student and how I probably have to work even harder because it's obvious that things aren't getting better.
I agree with how you said that it is partially there fault that they were let go. They could've have been doing an average job, but average just isn't good enough anymore. I also agree with how you said most Americans feel like they're entitled to their job. I think that people shouldn't just take their job and do an "okay" job, even if they're working at McDonalds. People should be grateful for the job they have and not blow it on coming to work late and not finishing all their work on time. Americans have to realize that a job is a privilege.
On the other hand, I disagree with how you said that people were not working hard enough. Obviously, they should work hard, but they had no idea that such a catastrophe was going to hit the economy. It was a hard lesson for everyone to learn but I don't think they should be looked down upon because probably even those who have a secure job feel entitled to it and wouldn't know what to do if they lost it.
Overall, this was a great blog and I enjoyed reading it.

Anonymous said...

I agree with the way you see the topic, and I think that if people took precautionary methods, and saved for those "rainy days" things would be a lot easier. We are ultimately a result of our actions, and although we can't control every situation, we should do what we can in order to keep for instance our jobs. Just because we're America, or "the best country in the world" that doesn't mean that we won't loose our jobs, or in many instances everything we have. I believe that the ultimate reason for people not taking "what it" precautionary measures is because they feel entitled to what they have, and don't have plans on loosing it.

Anonymous said...

I agree with the majority of the points made regarding this situation with those that loss their jobs. Considering the other side, many of those Americans that did mostly everything right may not have known what to do. Some, I think,simply didnt know how to deel with the problem and so they panicked and lost not only their jobs but their lives too. But most definitely people should have gone back to school and master other fields that would ensure a stable job, like in your case.
-Francisco Madrigal

Karina Velazquez said...

I agree with several of the points made in this blog. Even though it appears as if many Americans did nothing wrong, they did not make the best choices. Everyone has a choice in life, what they choose to act on, is completely up to them. What is happening right now is unfortunate, it is even sadder to realize it could have been prevented. On a brighter note, there are things people can to change their current situation. It all begins with changing our way of life. People need to learn to be responsibly with their money and not be wasteful, and to plan for the future. “Hope for the best, plan for the worst” is a great philosophy to live by because we do not live in a fairy tale where “hakuna matata” applies. Going that extra mile does help, it is extra work, but it will pay off in the long run. . People just need to realize that a luxurious life style is a privilege not a right. There is no "safe spot" in life, where once you reach it nothing bad can happen. Life will always remain a process that needs to be continuously worked on.

Lorelay Mendoza said...

Great Ideas!
I agree with what you said about people feeling entitled to their jobs and not doing anything to better their education, thinking that they've had enough and are set for their lives. Well you can't be set for life if you don't save what you get.
It shocked me when you said that you traded your higher paying job to become a teacher, but being the economics guy, you knew all this was coming and decided to settle for less, but be more secure in the long-run.
I do think that there is a point you missed though. What if those higher paying people were layed off because their employers thought that they were the ones who needed the job less and assumed that they did what they were supposed to do in saving 10% of their earnings?
My mother works for the city od San Diego here in downtown and a few of her coworkers were laid off recently. Many people from her department were cut and she was one of the fortunate few that wasn't. When she was stressing about the possibility that she would lose her job I knew that she wasn't going to. She is very hard working and doesn't do half-(bleep) work. She works long hours, she she has already left the house for work long before I even wake up to get ready for school (which is 4:45). Anyways, my mom's friend was mentioning that what some employers do to make laying people off a little more fair, is that they do see who has worked harder, but also who needs the job more. I thought that it was an interesting and considerate point of view.

Francesca said...

It is in fact prudent to do as you say and "protect yourself". I agree that many people take their jobs for granted and then they don't understand why they lost their jobs in the first place. But what happens when a person is absolutely doing an amazing job and yet they still get cut? Who is to blame? Do they blame themselves (even though it is clearly not the case) or do they blame the system?
It is a fact that some jobs can be safer and more secure than others. My father is a principal and although he is one of the best, budget cuts are always on his mind because you never know who might get cut. He protects himself against being laid off by staying in small schools and not working as a high school principal (which he is more than capable of)because the larger schools are facing large sums of cuts.
I understand that many people are at fault for loosing their jobs and there are in fact many stellar employees who ended up with the short straw. But how can we pass judgement on those people? It is certainly a tough call.

Kristen Phung said...

Seeing how many successful people that have lost their jobs, makes me feel nervous about my future. I agree with most of the points in your essay, especially the one regarding savings. Most people with a superior job have the mindset that they can go spend as much as they want, or even more then they earn, because they know that they are going to make it back. However, this has come back to bite them in the butt, as they reach their downfall; losing their job, house, and ultimately everything they earned.

Anonymous said...

I completely agree with your comments. The jobs were lost and most of the time it is there fault, ebven though that is not always true, it is the reality for the majority. This was very influential and I agree with your viewpoint.
- eddie sanchez 3b

Anais said...

I think that as you have stated in this essay, there are many people who didnt expect the unexpected, and didnt prepare for what could be a downfall of the u.s. economy. There are plenty of people who went from making 6 figures to working part time, just pecause they didnt plan for the future correctly, or they lived beyond their means. Additionally, there are plenty of "regular" people who did sort of the same thing, and lived way beyond their means while working an average job, and as soon as the job market crashed, they went so far down, and it was sad.

Anonymous said...

I agree with many points in the blog. One can’t foresee the future but by making the right decisions, like having a fall back or becoming indispensible, one can keep what they want, because everything they had was a privilege not a right.

corina said...

Most of the points in this essay are valid and I agree with them. I agree with the fact that it's not always because of the recession that people are losing their jobs and are on the verge tO losing their homes Nd such, sometimes it's because of the fact that people don't hAve enough education and/or the experience in the wOrk space.

Anonymous said...

Perla AbeldaƱo
3B
In my opinion I think you are right about the fact that the well educated people that lost their jobs and homes and all kinds of examples of better life style is their fault. The point that they are well educated and it makes me think at some points they had the opportunity to take some sort of economic class or at some point in their life figure out that the economy wasn't in a good condition. There for letting them to be bale to prevent all of the problems they are having now and of course once again I will mention that everyone should have the "what if plan" in case of any time of emergency in this case a fincial.

Melinda Sevilla said...

It makes sense what has happened with these rich and successful people. They took advantage of their money, enjoyed their wealthy bliss, but in this case, bliss was short-lived. It was obviously not very smart of any of these businessmen and women who didn’t save their earnings, and I applaud you for your wise decision of quitting the investment business and starting a steadier job while you could. However, this blog post sounds a bit like an “In your face, I told you so” essay, directed at the people who laughed at you leaving your well-paying and prosperous job. I still agree that people often don’t take their jobs as seriously as they should, “as if they are ‘entitled’ to their jobs instead of grateful for them”. Like you said, the ones who work the hardest are the ones who have the most luck when it comes to getting/keeping jobs. Working hard does have its perks.

Kiley S. said...

For the most part I agree with this blog post. The part about this blog post that stood out to me the most was the part about people feeling entitled to their jobs. Growing up in a competitive atmosphere I always learned that everyone is replaceable. Why do some thing half way? Go hard or go home! I also agree with the fact that too many people spend instead of save. These people cannot not blame the economy for their misfortune, they can only blame themselves because they didn't think smart enough when they needed to. Someone once told me "think smarter not harder" and this is now my motto to live by and many people should take note to this. Think SMARTER about the decisions that you make in your life and think about how that decisions will effect you later on in life. So, since I, at 17 years old can realize these simple facts, I agree with Mr. Strebler and have little to no sympathy for these people.

Lizzie Hall said...

I thoroughly enjoyed reading this essay. It made me think about how people can be living a great life, making money, saving money, and all of the sudden find themselves in economic trouble. The economy can crash without warning, and some people do not have the ability to tell when that happens. These people did not waste money, they just weren’t prepared for the economy to suddenly take a nose dive into very bad shape.
I liked your paragraph when you explained how you thought that most of the people who were victimized by the economic crash were at fault themselves for not being prepared. Even if a person has no idea what situation the economy is in, everyone should always be prepared for the worst, just in case. People need to recognize how “secure” their job is, and depending on that, make sure they know they will be able to handle an economic crash. Those who aren’t at all concerned about their jobs are the people that end up losing their jobs.

Maria Mendoza said...

Our society often acts in the present and rarely thinks of the "what-if's" they may encounter in the long run. The upper-middle classmen that lost a lot of what they worked hard for is mainly due to poor planning and lack of rational thinking. Comparing your life decisions to that of the upper-middle classmen lead to unjustifiable reasoning on their part. Thank you for such a wonderful blog.

Veronica Abeldano said...

I agree that most Americans spend their money and decide not to save. This can cause a problem today because economy is in a recession; where people are losing their jobs and have no money for their basic needs. Some well educated people think that because they had an education and they have a good position at their job and do nothing but waste the companies time and money they will not get fired. Now businesses are laying off alot of people and the first one to go are the ones who do nothing at work. That's why like Mr. Strebler said people have to make themselves more indispensable, by taking their job seriously or by growing professionally. There are many other ways but people just have to make the decision. They can decide to fail or find a better solution to find success in life. They have to plan and find solutions so they can survive at a situation like this, either by being more dispensable and/or by looking for a job.

Elise Polk said...

The middle-class seem to be the ones who usually the ones who blow all their money away even though they are not financially secure for whatever circumstances come their way. Just like your lesson in econ class the other day, you taught us to save 10% of what we earn. Many don’t do this and end up getting into a lot of financial trouble. My family has had many friends who get lose track of their spending and don’t realize they’re going over the top. There are those people, and that’s just how society works, not everyone will be fortunate, but there will always be jobs available for those who put the effort into it. Nevertheless, I agree, people should not be spending more than they earn and should be saving.

Joanna Garcia said...

I agree with your overall approach and sentiment toward the people who lost their job in 60 minutes, if they were able to afford their somewhat luxurious lifestyle, what kept them from analyzing their financial situation and find a way to be more financially secure. Stressing the importance of savings is crucial, if we want to prevent instances like the ones highlighted in your essay.

Jared Creamer said...

I think that this was a good essay because while stating all of your key points, you were able to stay neutral in this topic and not lean too far to one side. I especially liked this essay because i could personally relate to most of the key facts including people spending a bunch of money that they don't have and just a lack of motivation to go out and get a job in general. For some people, it is very difficult to find jobs, but then again there are other people who don't have a job because they aren't willing to actually work

Gabriela Peralta said...

Overall, a lot of the ideas that you wrote about make a lot of sense, and are ideas that I agree on as well. Being a person that doesn't save money as much, I can see why other people have trouble saving money up. And when they lose their jobs, for whatever reason, then they become frantic and have no idea what to do and that's when they become underemployed. It's true that a lot of those people who lost their jobs, well it wasn't their fault. But they can be smarter about the choices they made while they still had their job to ensure a good future in case anything at all happens.