Comments on: Preparing For and Surviving an Economic Downturn http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/ Simple, applicable personal finance advice for the modern world Sun, 22 Nov 2009 01:50:09 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Olga http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-195596 Olga Sun, 02 Mar 2008 06:13:13 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-195596 what exactly does the term economic downturn mean??? what exactly does the term economic downturn mean???

]]> By: Minimum Wage http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-127520 Minimum Wage Sat, 08 Dec 2007 01:26:33 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-127520 Okayyyyy, kevin, let's hear your solution. If employers don't want to hire me, nobody's gonna stop them. There are no excuses on my resume, so that can't be why employers aren't offering interviews. Okayyyyy, kevin, let’s hear your solution. If employers don’t want to hire me, nobody’s gonna stop them.

There are no excuses on my resume, so that can’t be why employers aren’t offering interviews.

]]> By: Kevin @ Change Your Tree http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-127195 Kevin @ Change Your Tree Fri, 07 Dec 2007 17:26:48 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-127195 [em]testing italics[/em] - feel free to delete this. [em]testing italics[/em] – feel free to delete this.

]]> By: Kevin @ Change Your Tree http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-127194 Kevin @ Change Your Tree Fri, 07 Dec 2007 17:25:54 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-127194 [i]Considering the toil I put in at my job, I’d say I’m trying very hard. Where I work, slackers don’t last long. There’s no advancement path here, so there is no promotion to be had. I am overweight with bad teeth and bad credit (uninsured extended illness with loss of income) I can’t fix on a minimum wage income, so my prospects for a better job are minimal.[/i] And the longer you make excuses, the longer you'll make minimum wage. [i]Considering the toil I put in at my job, I’d say I’m trying very hard. Where I work, slackers don’t last long. There’s no advancement path here, so there is no promotion to be had.

I am overweight with bad teeth and bad credit (uninsured extended illness with loss of income) I can’t fix on a minimum wage income, so my prospects for a better job are minimal.[/i]

And the longer you make excuses, the longer you’ll make minimum wage.

]]> By: Frank Schulte-Ladbeck http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126477 Frank Schulte-Ladbeck Thu, 06 Dec 2007 12:02:14 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126477 I agree with those mentioning the last recession. I remember it quite well, and if you are in an area that is highly effected by it, job layoffs come in unexpected places, as the economic conditions spiral outward. However, I find your advice quite sound, and I wish that the media would not go for the sensational story every time, but put forth information that could actually help. I agree with those mentioning the last recession. I remember it quite well, and if you are in an area that is highly effected by it, job layoffs come in unexpected places, as the economic conditions spiral outward. However, I find your advice quite sound, and I wish that the media would not go for the sensational story every time, but put forth information that could actually help.

]]> By: rolo4evr http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126473 rolo4evr Thu, 06 Dec 2007 11:54:03 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126473 Unemployment might rise some, but mostly it’s companies trimming fat - stable companies don’t fire good employees because of downturns. ?????????????????????????????????????????????????? We disagree with your assessment 100% that healthy corporations do not get rid of good employees. Tell that to the thousands and thousands of North American EDS employees who have seen their jobs outsourced to foreign countries over the past five years. EDS has 20,000 employees in Argentina, through jobs created by EDS outsourcing of North American jobs. EDS has 950 employees in Argentina, through jobs created by EDS outsourcing of North American jobs. EDS has 1,200 employees in Hungary, through jobs created by EDS outsourcing of North American jobs. From the IT support center in INDIA, with hundreds and hundreds of North American jobs eliminated to provide work to India, to the newest IT support center in CHINA, which will employ 1,400 Chinese workers, the greed of major corporations is one of the components driving the recession. This link will provide further information regarding EDS' much touted Best Shore Outsourcing. This is NOT about an unstable company cutting the fat. This is all about corporate greed and a lack of concern over the level and competence of customer service provided. Unemployment might rise some, but mostly it’s companies trimming fat – stable companies don’t fire good employees because of downturns.

??????????????????????????????????????????????????

We disagree with your assessment 100% that healthy corporations do not get rid of good employees.

Tell that to the thousands and thousands of North American EDS employees who have seen their jobs outsourced to foreign countries over the past five years.

EDS has 20,000 employees in Argentina, through jobs created by EDS outsourcing of North American jobs.

EDS has 950 employees in Argentina, through jobs created by EDS outsourcing of North American jobs.

EDS has 1,200 employees in Hungary, through jobs created by EDS outsourcing of North American jobs.

From the IT support center in INDIA, with hundreds and hundreds of North American jobs eliminated to provide work to India, to the newest IT support center in CHINA, which will employ 1,400 Chinese workers, the greed of major corporations is one of the components driving the recession.

This link will provide further information regarding EDS’ much touted Best Shore Outsourcing.

This is NOT about an unstable company cutting the fat. This is all about corporate greed and a lack of concern over the level and competence of customer service provided.

]]> By: kman http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126204 kman Wed, 05 Dec 2007 23:46:41 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126204 To Minimum Wage Hello! I've seen many of your posts here a TSD and am curious to know which (if any) advice has helped you. It's sounds like you're in a tough spot and I thought if your listing the tips/advice that have helped you most would be interesting to hear. Sort of the best actions when things are really tough. Just an idea. To Minimum Wage

Hello!

I’ve seen many of your posts here a TSD and am curious to know which (if any) advice has helped you. It’s sounds like you’re in a tough spot and I thought if your listing the tips/advice that have helped you most would be interesting to hear. Sort of the best actions when things are really tough.

Just an idea.

]]> By: Minimum Wage http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126179 Minimum Wage Wed, 05 Dec 2007 22:50:17 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126179 <i>If your only making minimum wage, you are not trying very hard. People who can’t speak our language come to our country and make more than minimum wage.</i> Considering the toil I put in at my job, I'd say I'm trying very hard. Where I work, slackers don't last long. There's no advancement path here, so there is no promotion to be had. I am overweight with bad teeth and bad credit (uninsured extended illness with loss of income) I can't fix on a minimum wage income, so my prospects for a better job are minimal. If your only making minimum wage, you are not trying very hard. People who can’t speak our language come to our country and make more than minimum wage.

Considering the toil I put in at my job, I’d say I’m trying very hard. Where I work, slackers don’t last long. There’s no advancement path here, so there is no promotion to be had.

I am overweight with bad teeth and bad credit (uninsured extended illness with loss of income) I can’t fix on a minimum wage income, so my prospects for a better job are minimal.

]]> By: guinness416 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126170 guinness416 Wed, 05 Dec 2007 22:17:05 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126170 After 11 Sept the company I worked for (in NYC) laid people off based on salary - the highest paid were the first to go, and they were anything but "dead wood". The company paid for this both in loss of experienced and well-connected staff as well as drastically reduced morale in the people left (including myself); the entire remainder of the staff turned over within a year or two. After 11 Sept the company I worked for (in NYC) laid people off based on salary – the highest paid were the first to go, and they were anything but “dead wood”. The company paid for this both in loss of experienced and well-connected staff as well as drastically reduced morale in the people left (including myself); the entire remainder of the staff turned over within a year or two.

]]> By: Shevy http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126132 Shevy Wed, 05 Dec 2007 20:49:12 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126132 Trent, you said: For most people leading normal, everyday lives, an economic recession doesn’t mean too much. Unemployment might rise some, but mostly it’s companies trimming fat - stable companies don’t fire good employees because of downturns. I'm going to majorly disagree with you on this. "Stable companies" may primarily trim their deadwood but there are many companies that are not terribly stable, or that are normally stable but are particularly affected by some specific development in the economy. Also, many companies will trim based on seniority (in a union situation this is a given) or because the person retained can perform another job in addition to the one they're currently doing. I lived through this in a previous recession. At that time I was a single parent with 2 preteens and a teen, receiving no child support. I had worked my way up from $12k per year to $26k and was living frugally but adequately with a while to go on my car loan and under $1,000 in credit card debt. My department (which was particularly affected by events in our industry) was cut in half, as were several others. I was the junior half (7 yrs seniority vs. 14). My department head remained but had to go back to doing what he'd done previously *in addition* to what he & I did (3 jobs for the price of one). I got a small golden handshake, 3 months of extended medical/dental (we were finishing orthodontics) and my annuity and pension money. When my unemployment ran out I spent about a year earning around $8/hr before getting into non-profits where I'm still employed more than a decade later. I managed to get through the recession, but it was very, very tough and I wouldn't have lost a tooth if I hadn't been without dental benefits for so long. If I'd had a mortgage at that time I probably would have lost my home. I eventually had to sell my car (for next to nothing) because the power steering pump went on it at the same time my insurance was up for renewal. So, please don't tell me not to worry about a recession. I may be much better placed now (being debt free), but last time it took *me* a lot longer to recover than it took for the economy to do so. How many other people will suffer through that this time around? Trent, you said:
For most people leading normal, everyday lives, an economic recession doesn’t mean too much. Unemployment might rise some, but mostly it’s companies trimming fat – stable companies don’t fire good employees because of downturns.

I’m going to majorly disagree with you on this. “Stable companies” may primarily trim their deadwood but there are many companies that are not terribly stable, or that are normally stable but are particularly affected by some specific development in the economy.

Also, many companies will trim based on seniority (in a union situation this is a given) or because the person retained can perform another job in addition to the one they’re currently doing.

I lived through this in a previous recession. At that time I was a single parent with 2 preteens and a teen, receiving no child support. I had worked my way up from $12k per year to $26k and was living frugally but adequately with a while to go on my car loan and under $1,000 in credit card debt.

My department (which was particularly affected by events in our industry) was cut in half, as were several others. I was the junior half (7 yrs seniority vs. 14). My department head remained but had to go back to doing what he’d done previously *in addition* to what he & I did (3 jobs for the price of one).

I got a small golden handshake, 3 months of extended medical/dental (we were finishing orthodontics) and my annuity and pension money. When my unemployment ran out I spent about a year earning around $8/hr before getting into non-profits where I’m still employed more than a decade later.

I managed to get through the recession, but it was very, very tough and I wouldn’t have lost a tooth if I hadn’t been without dental benefits for so long. If I’d had a mortgage at that time I probably would have lost my home. I eventually had to sell my car (for next to nothing) because the power steering pump went on it at the same time my insurance was up for renewal.

So, please don’t tell me not to worry about a recession. I may be much better placed now (being debt free), but last time it took *me* a lot longer to recover than it took for the economy to do so. How many other people will suffer through that this time around?

]]> By: Erin http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126129 Erin Wed, 05 Dec 2007 20:47:21 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126129 I agree with your overall point that the media tends to be a bit alarmist about pending recessions. However, I think this statement is naive: "For most people leading normal, everyday lives, an economic recession doesn’t mean too much. Unemployment might rise some, but mostly it’s companies trimming fat - stable companies don’t fire good employees because of downturns". You may be lucky enough to have a fairly recession-proof job, but this is highly dependent on the industry one works in and the job function. I work in marketing, which at many companies is considered a support function rather than a revenue-driving function and thus one of the first departments to be hit by cutbacks. Also, many public companies will do an automatic lay-off at the first sign of lower earnings. Flash back to 2001 - my husband was working for an established software company that did a 10% layoff because they did not make the Wall St. earnings estimate. They were still very profitable, mind you, they just came in a few cents below earnings/share estimates. He was laid off because he was one of the newest employees in the group, having been there for 11 months. 2 days later, I (and about 75% of the marketing department) was laid off from the start-up software company I was working for. I got a new job within a month. And I was laid off a year and a half later from that company, which had been in business for 25 years but had become highly dependent on the high tech sector and was hard-hit by the dot com crash. They ended up filing Chapter 11 and shutting down their entire East Coast office. So 6 years later we are doing what you mentioned - building up our emergency fund to prepare for possible layoffs due to recession. I just think that someone reading your rather sweeping statement might think "well I have always had great performance evaluations and my company is stable, so I'm not vulnerable." Sure, anyone in their right minds is going to lay off their worst employees first, but if a manager gets an edict "you have to let 4 people go this week", and you have 2 dud employees and are happy with the rest, the choices can get pretty subjective when it comes down to the next 2 to go. I agree with your overall point that the media tends to be a bit alarmist about pending recessions.

However, I think this statement is naive: “For most people leading normal, everyday lives, an economic recession doesn’t mean too much. Unemployment might rise some, but mostly it’s companies trimming fat – stable companies don’t fire good employees because of downturns”.

You may be lucky enough to have a fairly recession-proof job, but this is highly dependent on the industry one works in and the job function. I work in marketing, which at many companies is considered a support function rather than a revenue-driving function and thus one of the first departments to be hit by cutbacks.

Also, many public companies will do an automatic lay-off at the first sign of lower earnings. Flash back to 2001 – my husband was working for an established software company that did a 10% layoff because they did not make the Wall St. earnings estimate. They were still very profitable, mind you, they just came in a few cents below earnings/share estimates. He was laid off because he was one of the newest employees in the group, having been there for 11 months. 2 days later, I (and about 75% of the marketing department) was laid off from the start-up software company I was working for. I got a new job within a month. And I was laid off a year and a half later from that company, which had been in business for 25 years but had become highly dependent on the high tech sector and was hard-hit by the dot com crash. They ended up filing Chapter 11 and shutting down their entire East Coast office.

So 6 years later we are doing what you mentioned – building up our emergency fund to prepare for possible layoffs due to recession. I just think that someone reading your rather sweeping statement might think “well I have always had great performance evaluations and my company is stable, so I’m not vulnerable.” Sure, anyone in their right minds is going to lay off their worst employees first, but if a manager gets an edict “you have to let 4 people go this week”, and you have 2 dud employees and are happy with the rest, the choices can get pretty subjective when it comes down to the next 2 to go.

]]> By: vh http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126112 vh Wed, 05 Dec 2007 20:14:17 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126112 1. Get out of debt. 2. Have at least a year's worth of living expenses in savings. Other than that, there's not much most individuals can do, realistically. At any rate, those two steps are things everyone should try to accomplish whether or not they expect the Four Horsemen of the Apocalypse to come galloping over the nearest hill. If you've done those things, you might as well relax and quit worrying. Economies go up and economies go down. Recession is as inevitable as death & taxes, sooner or later...and there's not a thing anyone can do about it. 1. Get out of debt.
2. Have at least a year’s worth of living expenses in savings.

Other than that, there’s not much most individuals can do, realistically. At any rate, those two steps are things everyone should try to accomplish whether or not they expect the Four Horsemen of the Apocalypse to come galloping over the nearest hill.

If you’ve done those things, you might as well relax and quit worrying. Economies go up and economies go down. Recession is as inevitable as death & taxes, sooner or later…and there’s not a thing anyone can do about it.

]]> By: Bethany http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126023 Bethany Wed, 05 Dec 2007 16:43:25 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126023 My company recently cut an entire team, most of whom had been with the company for years. I don't think just doing a good job necessarily ensures job security. Things happen. I agree that the best thing to do at any time is to get one's financial house in order and out of debt. One of my main motivations for living frugally is that I feel more able to survive in times of trouble. My company recently cut an entire team, most of whom had been with the company for years. I don’t think just doing a good job necessarily ensures job security. Things happen.

I agree that the best thing to do at any time is to get one’s financial house in order and out of debt. One of my main motivations for living frugally is that I feel more able to survive in times of trouble.

]]> By: Michelle http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-126001 Michelle Wed, 05 Dec 2007 15:55:33 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-126001 Trent - Should I be skeptical of taking a new job that pays much more right before the start of a recession? If this company needs to lay off people, will I be the first to go since I am the newest one on? This is a pretty large company in the transportation industry, which could be affected by oil prices. Should I reconsider? Trent – Should I be skeptical of taking a new job that pays much more right before the start of a recession? If this company needs to lay off people, will I be the first to go since I am the newest one on? This is a pretty large company in the transportation industry, which could be affected by oil prices. Should I reconsider?

]]> By: Dave http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-125958 Dave Wed, 05 Dec 2007 14:19:06 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-125958 (When will this fantastic economy trickle down to the minimum wage sector?) If your only making minimum wage, you are not trying very hard. People who can't speak our language come to our country and make more than minimum wage. (When will this fantastic economy trickle down to the minimum wage sector?)

If your only making minimum wage, you are not trying very hard. People who can’t speak our language come to our country and make more than minimum wage.

]]> By: rhbee http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-125957 rhbee Wed, 05 Dec 2007 14:16:24 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-125957 I didn't see any mention of using our awareness of these conditions as a reason to become more politically involved. If we look at the US through the lense of personal finance how is it doing? What is it doing to snowball its indebtedness? How balanced is its budget? You started off by mentioning the fear induced by the media, what about the continuous use of it by our government? I didn’t see any mention of using our awareness of these conditions as a reason to become more politically involved. If we look at the US through the lense of personal finance how is it doing? What is it doing to snowball its indebtedness? How balanced is its budget? You started off by mentioning the fear induced by the media, what about the continuous use of it by our government?

]]> By: Gayle http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-125930 Gayle Wed, 05 Dec 2007 13:18:37 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-125930 After you have lived through a few recessions you start to get that feeling of deja vu all over again. Like now. The real inflation rate is much higher than the government states, just look at your energy and food bills. Consumer interest rates are ratcheting up rapidly. Anybody else remember 18% mortgages? Why do you think job hunting is such a popular topic on this very website? Just look at the book club selection we are currently reading. The government identifies recessions in hindsight, we can feel it now. After you have lived through a few recessions you start to get that feeling of deja vu all over again. Like now. The real inflation rate is much higher than the government states, just look at your energy and food bills. Consumer interest rates are ratcheting up rapidly. Anybody else remember 18% mortgages? Why do you think job hunting is such a popular topic on this very website? Just look at the book club selection we are currently reading. The government identifies recessions in hindsight, we can feel it now.

]]> By: kristen http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-125910 kristen Wed, 05 Dec 2007 12:37:13 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-125910 "Nobody has to worry except the people with lots of debt and sub-prime home mortgages." I'd say that's a rather large portion of the US population, and as such, a large problem. “Nobody has to worry except the people with lots of debt and sub-prime home mortgages.”

I’d say that’s a rather large portion of the US population, and as such, a large problem.

]]> By: Nick http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-125772 Nick Wed, 05 Dec 2007 07:26:28 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-125772 To Kevin @ Change Your Tree: demagogue: noun. to treat or manipulate (a political issue) in the manner of a demagogue; obscure or distort with emotionalism, prejudice, etc. Pot, meet kettle. Kettle, pot. To Kevin @ Change Your Tree:

demagogue: noun. to treat or manipulate (a political issue) in the manner of a demagogue; obscure or distort with emotionalism, prejudice, etc.

Pot, meet kettle. Kettle, pot.

]]> By: Julie http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/comment-page-1/#comment-125737 Julie Wed, 05 Dec 2007 05:37:03 +0000 http://www.thesimpledollar.com/2007/12/04/preparing-for-and-surviving-an-economic-downturn/#comment-125737 I noticed that you didn't discuss the decline of the dollar. Do you think that it will really only have a small effect on investors? What about people planning on spending time abroad? I have lots of friends going abroad starting in Fall 2008 and I would be curious to hear your advice for them. I noticed that you didn’t discuss the decline of the dollar. Do you think that it will really only have a small effect on investors? What about people planning on spending time abroad? I have lots of friends going abroad starting in Fall 2008 and I would be curious to hear your advice for them.

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