By Kevin M

Jobless recovery–that’s an obvious oxymoron if ever there was one. I first heard the term coming out of the last recession in the early 2000s. Then as now, the economy was somehow miraculously growing without worker participation. Now the term is starting to be heard in connection with the latest “recovery”, and it seems just as meaningless now as it did back then.

Do you ever get the feeling that most of what economists mean when they talk about “the economy” is a semi-worthless pile of possibly bogus statistics?

Mark Twain was credited with saying, “there three kinds of lies: lies, damn lies–and statistics”.

To that I say a big, fat AMEN!

If you have a sense that economy isn’t quite recovering, you’ve got a lot of company—I mean apart from just me. A recent article from CNNMoney (posted on Yahoo!Finance), titled How the middle class became the underclass confirms our worst suspicions.

“Incomes for 90% of Americans have been stuck in neutral, and it’s not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed… While globalization has lifted millions out of poverty in developing nations, it hasn’t exactly been a win for middle class workers in the U.S.”

Most significant it seems, is that the apparent decline in economic opportunity seems to be less a matter of the recent recession, and more a factor of longer term trends. Translation: even if the economy is getting better, it won’t necessarily benefit us in terms of employment.

In We Don’t Need No Stinkin’ Jobs (in the U.S.), Charles Hugh Smith at Of Two Minds defines how the growth of the middle class in the developing world is lessening the reliance of major corporations on U.S. sales, and by extension, U.S. jobs:

“As the discretionary purchasing power of the American middle class erodes, four times as many new potential customers appear elsewhere (China, India, etc), hungry to taste the Oreos, become consumed by the iPhone, etc., and ten times as many are potential buyers of toothpaste and other basics…The concern for domestic jobs is mere political expediency.”

As revenue sources grow overseas, business gradually moves operations closer to profitable markets, hence the off-shoring of jobs and complete elimination of operations in the U.S. The fact that wages are also substantially lower in those locations only accelerates the process.

This trend has been long in operation, but largely papered over by the expansion of the financial services industries since the 1980s and running through the early 2000s. With the ’07-’09 financial meltdown, the results of the global shift have become more apparent, and there’s little reason to believe it will reverse.

For those of us in the vast and embattled middle class, the only workable option is to adjust to the new reality. But how do we do that in a practical way?

Accept reality, rather than sugarcoating it or denying it

We often hear talking heads, politicians and even people on the street trying to convince us—or maybe themselves—that the slow burning, long term erosion of the middle class isn’t real. But the anecdotal evidence is all around us in the lives of people who are losing jobs, lifelong careers and even their homes. I know many people in that situation and you probably do as well. Statistics are increasingly backing up the reality that those individuals are facing.

If it’s true that individual experiences and statistics are pointing to a more limited future, there will be no tangible advantage to denying that reality.

Only by acknowledging reality and adjusting our tactics to deal with it do we have any chance of making a better life for ourselves in an uncertain future. Vesting ourselves in happy denials and trusting that the big picture will magically right itself is not a plan.

We can’t go forward until we recognize that the past is gone

There’s a temptation to believe in the past, that the same factors that drove previous eras will also save us today. We might have fond memories of more reliable economic times of the 1990s, 1980s or even the 1950s. But those decades, and the conditions that made them what they were, are long gone. The future isn’t in the past—the future is in the future.

The post World War II order that so reliably insulated and advantaged the U.S. and other nations is gone, and while we might be nostalgic for it, the global environment we’re in today is much different from that world—and it’s our world now!

Take active steps to turn your own ship around

Facing reality is mostly a mental exercise. It means asking questions we wouldn’t before and being prepared for the answers—what ever they may be. It means overcoming a life of indoctrination and entrenched worldviews, and being open to possibilities that are well beyond our personal paradigms. It also means practical action, such as the following:

1. Debt elimination. Lifelong job security is long gone, yet people continue to borrow as though it can still be relied upon. But if the future will be less reliable than the past we can’t afford to continue on that course. Stop taking on new debt, payoff old debt, and work to be debt free. Freedom of action is critical against uncertainty, and you can’t have that when you’re in debt.
    

2. Emphasis on savings. A strong cash position is one of the best insulations we can have. Forget about arbitrary guidelines like saving 10% of your income—save all you can. The more you have, the more options you have for what ever you want to do.
    

3. Developing specialized skills. We can no longer rely on a stable job—what ever that is anymore. Strong skills are becoming more important all the time. Our stock in trade depends on what we can bring to the market place. If we’re weak on marketable skills we need to develop them, if we have them we need to improve them—constantly.
    

4. Multiple income streams. Be open to the possibility of procuring new income sources. Though it isn’t certain yet, our ability to rely on the income stream from a single job is in jeopardy. An online business in combination with a full time job will not only provide additional revenue, but it may give the confidence needed if the reliability of that job were suddenly thrown into doubt. Experiment, implement and improvise, but spread your wings. Your future may depend on it.
    

5. Entrepreneurialism. Full time jobs with living wages and full benefits are becoming harder to find and harder to keep in many fields. Self-employment may be the best hope for anything that looks like a secure future. Stop thinking job, and start thinking business.
    

6. Expand your social and business networks. If what we loosely refer to as “the system” is no longer reliable, we need people more than ever. That includes family, friends, and business contacts locally, nationally and even globally. You never know where opportunity will come from and the more people we’re connected with, the greater the chances of capitalizing.

I believe that we’re in the early stages of a massive shift in the global economy, a change that will be as dramatic and sweeping as the Industrial Revolution, but has yet to be clearly identified and labeled. To the degree that the shift is either positive or negative will have everything to do with our willingness to embrace the shift and change our behavior. Resist it and cling to the past, and we can become victims. Embrace it, and we can be beneficiaries.

What are your thoughts? Do you believe that we’re in—or coming out of—a recession, or do you think that bigger events are playing out? How significant are those events and the changes they’re bringing? How do you think we should be preparing for it?

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Why Most New Businesses Fail – And How Not to Become One of Them

By Kevin M

There’s a popular line of reasoning that once you’ve lost your job and you’re collecting unemployment benefits that you’re new “fulltime job” is finding a new fulltime job. You have the motivation (being jobless) and at least some income to cover you until you find something else, so this makes sense.

But what if you were to approach the situation a bit differently, say by recognizing your time of unemployment as a valuable opportunity to experiment? You can do that through various forms of employment—temporary jobs, contract work, and part time—and even though you’ll lose some or all of your benefits for a time, it may be worth doing.

Here are some reasons why taking at least a part time job may be better than staying home and spending all of your time looking for a new full time job.

1. It gives you something to keep you busy.

Idle time is one of your worst enemies when you’re unemployed. Too much down time means time for worry and negative thinking, and that’s something you need to avoid. Circulating is crucial, and while you can do this by going on job interviews, networking, volunteering and working out, adding even a part time job to the mix can give that all important sense of forward motion.

2. It can break up job hunting monotony.

Job hunting takes a lot of time, energy, discipline and emotional fortitude, if only because most of us don’t do it most of the time. And while it may be possible to sustain a high level of effort in that direction short periods, doing it for months can burn you out. You may need to spend most of your time in the job hunt, but you’ll need to do other things as well, preferably those that
also have the potential to get you a job. Working is one of the best ways to do this.

3. It provides working contacts.

If you’re unemployed, developing a network of contacts is crucial, but the tendency in this direction is often to network with other unemployed people. It may help to informally network through some sort of job, which may give you access to decision makers either in the business you’re working for or outsiders (customers, vendors, affiliates, etc.) you deal with in the course of employment.

4. It’s an opportunity to develop new skills.

Is it possible that either you lost your job or are having difficulty finding a new one because you were missing a critical skill? There’s no better way to develop a skill than with hands on experience. Let’s say although you were in management, your career was stunted by a lack of sales experience; now that you’re unemployed, you may be able to get a job in sales that will give you the needed experience and skills. What ever skill you were lacking, or need to develop, is there some sort of job you could take specifically to learn it?

5. It’s a chance to try something completely new.

Now let’s get down to a grim reality of our times: many of the jobs lost in the past few years aren’t coming back. One of the best things you can do for your career, long term, may be to try something completely new. Sure, you could hang back, collect unemployment for as long as you’re allowed while searching for the perfect career, but sometimes that career has to be built from the ground up. What is it you’d really like to do? Now might be the time to take a chance.

6. It provides a sense of self-worth.

For many of us, the best source of self-worth is found in earning a paycheck. Although you may earn less money than you’ll make in unemployment benefits, there’s much to be said for earning at least a little bit of income through our work. Stay home too long drawing unemployment benefits, and you’re self-esteem may begin to weaken—that isn’t a situation anyone needs when unemployed.

7. The jobs you hold while unemployed can be the start of a multiple income stream program.

The employment landscape is changing. Depending on what kind of job you held (and in what industry), there may no longer be full time equivalent replacement jobs available. You may find that the solution to your problem will be solved not by a new job, but by multiple income streams. The contract, temporary or part time job you take now may enable you to develop one of those streams.

8. It can provide a revenue stream once the benefit checks stop coming.

Many of the unemployed today have watched months turn into years, and in the process benefit checks have stopped coming in. If you’re unable to secure a job by the time your claim (and your other resources) run out, you’ll have to be prepared to do something when it does. Better to have the wheels turning on this well before it happens.

As compelling as it may seem to use an unemployment check to aid in the full time search for a new job to replace the one you lost, working at something—or even several something’s—may provide better long term results.

Are you unemployed, or have you been in the recent past? Did you spend all of your time looking for a new job, or did you try different work situations to see where that might lead? How did it work for you?

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STRATEGY #5 TO SURVIVE A DOWN ECONOMY

By Kevin M

In the dreary job market of the moment, people are having difficulty with two major areas in particular: keeping a steady income flow and increasing that flow. The increasing level of unemployment is not only eliminating jobs, but it’s also putting a lid on raises and promotion opportunities. This is in large part, the driving force behind the credit crisis and the epidemic of foreclosures and bankruptcies. Is there a way to deal with it without taking unnecessary risks?

In 10 Ways To Survive a Down Economy (published on Christianpf.com June 1) we listed ten strategies to help us deal with the bad economy. Our topic for today, Strategy #5:

Be prepared to cultivate and balance multiple income sources. You may have a full time job and a part time business, or vice versa. Think of your work in terms of an investment portfolio, in which diversification adds strength. There are probably several jobs you are potentially good at; always be on the lookout for new opportunities.

Why increasing income or broadening the income base matter

Recessions produce a storm cellar mentality, a time when most people become concerned primarily with keeping what they have. But even if you keep what you have—your job and your current income level—you’re still falling behind. Official consumer price index (CPI) numbers aside, most of us realize that it costs more to live each year. Health care costs, education, utilities, real estate taxes, auto insurance, car repairs and many other expenses that we pay for products and services we can’t live without have been rising much faster than published numbers suggest. Meanwhile, gasoline and food costs bounce in unpredictable patterns. And what about preparing for retirement? If it often seems overwhelming it’s because it is!

If you’re in a job or business in which options to expand income are limited, it may be time to look outside the box for solutions. If you have a job that’s stuck in neutral, a part time job or side business may be the only way to increase your income. If you have a business already, it may be time to consider working in lines that are unrelated to what your business does as a primary function. If you can take on business lines that run in counter cycles to your main business, one for which peak season occurs when your mainline is in slow season, you may have found a solid way to even out your income stream.

Additional income aside, adding multiple sources will help to strengthen your income base, making you less vulnerable to job loss or income declines. Just being involved in different lines of work can often open doors to opportunities that would never surface if you stay exclusively in your regular occupation. Think wide, rather than deep!

I’m not saying that this is going to happen, but I will suggest the possibility…we may be on the edge of a time when job and income security can no longer be trusted to a single job or employer. We’ve known since well before the current recession that we don’t have anything like the job security workers enjoyed a generation or two ago. In fact, it’s now close to impossible to plan as much as a five year stint with one company with any certainty.

It’s worth noting that major changes often take root in society years before they’re even identified and labeled. True, we’ve been operating in an environment of one worker/one job for decades, but there’s more than a remote chance that a change to multiple income streams is in the pipeline already. Recessions often amplify and accelerate trends that were developing before the downturn hits. We can’t know for certain if that’s the case right now, but it may be worth some preparation just in case.

I’m having trouble keeping one income source, how do I get a second, or a third?

While it might be tempting to throw up our hands and resign ourselves to the fact that the economy stinks, and there’s little to do but hold on to the job or business we have and hope to tough it out until the next recovery comes and lifts all boats—including ours—but is that a plan or just a hope? I’ll dare to suggest that we need to be proactive, even now when opportunity seems to be hard to achieve. For the following reasons there may be more opportunity out there right now than there has been in a long while…

1. Many companies can no longer afford full time employees and are hiring part timers and outside contractors
2. With large numbers of people unemployed and underemployed, non-traditional work arrangements are becoming more common and accepted than ever
3. Un-/under-employment is advancing networking as the unemployed and marginally employed band together seeking opportunity
4. The internet has enabled would-be entrepreneurs to market to people across the globe at relatively low cost
5. In nearly every industry, large enterprises are in retreat, opening markets to upstarts and smaller competitors who can offer a better way
6. New trends—like thrift, energy efficiency, and cleaning up the credit mess—are emerging creating opportunities that didn’t exist two years ago
7. Financial hardship is causing both people and organizations to seriously consider new ways of doing business that they wouldn’t have entertained in more prosperous times

Each of these factors represents a single overriding dynamic: change. And each presents an opportunity either to stabilize or increase our incomes.

Worried that you job is in jeopardy? Offer to stay at your current job at reduced hours, making up the income loss with a similar arrangement with another company. Did you try a business idea a few years ago that didn’t make it? Maybe it’s time to dust it off and try again—a lot of the competition has quietly disappeared. Have a product or service that you haven’t had much luck selling locally? Maybe you were thinking too small; start a website, link it to other websites and try peddling to the whole world—you can have a marketing budget of zero, which will give you the staying power to keep at it until it works. Not having any luck finding a new job? Get connected with anyone and everyone you can on the social networks—Facebook, Linked In, etc.—and start looking for an *opportunity* rather than a job.

The point is, part time jobs, job sharing, contract arrangements and side businesses are out there, but require a bit more thinking than in the past. Start looking at situations from outside the box, and the opportunities may be more obvious. The part time side business you start today—yes, right here in the middle of the worst economy since the Great Depression—may be your full time career a couple of years from now.