#jobs #recession #economics #wages
The recent jobs report was double what was expected.
Yet, there is talk of recession.
It’s been said that a recession is defined by how each individual feels about his or her situation.
There are a few questions about the data, and economic perceptions here.
First, if there are a record number of jobs, are they all being filled? Many employers are begging for workers at all levels. Therefore, are they just creating empty slots on a payroll?
Secondly, if the economy has declined for two straight quarters – the technical definition of recession – shouldn’t employers be laying people off, not hiring?
In fact, many companies, Oracle, for example, are laying off people. But, is this a function of technological changes? Remember, as technologies evolve, the masters of the previous technology may not be needed when the new technology emerges. Changing technologies may mean changing staffs.
Thirdly, many people perceive we are heading toward recession because things are costing more, like food and gasoline. Inflation is indeed here, but that has many causes that are unrelated to a declining economy. The aforementioned labor shortages may be one, as companies have to pay workers more to hire or keep them. Supply-chain issues caused by the pandemic may be another, along with the war in Ukraine etc.
So, you may not feel that the economy is clicking on all cylinders, even if it may be. Inflation will ease as buyers naturally cut back. Therefore, ask yourself: is your job paying you more since the pandemic restrictions were lifted? Certainly, you are paying more for what you buy, which may mitigate your raise, but you could be paying more without getting a raise.
By the way, if you didn’t get a raise, feel free to look for something else. The jobs, and needs, are out there, and you may have more leverage as an employee than you’ve ever had.
Some describe this economy as complicated. Perhaps, it is. Suffice it to say that after pandemic lockdowns, there is pent-up demand not only to buy things, but to do things. And, many of those who sell or provide services to meet that demand are still staffing up to accomplish that.
Therefore, there will be some shortages and closings because there aren’t enough people to provide the products and services.
You, as a consumer, will feel that, and it won’t necessarily feel good. But, as the saying goes, one cannot turn a battleship around quickly. It will take time to resolve.
If you are feeling down about the economy, think of it this way: If you got a raise, chances are the raise will not go away. If prices now are eating away at the raise, and you feel you are no better off than you were, as inflation comes down, your raise will likely still be there.
If what you do for a living is becoming obsolete, and you can see it, try something else. We all have to adjust as times and technology change.
Sure, it’s no easy task to try something different. And, of course, if you learn something different, and THAT becomes obsolete, you are going to ask yourself “why did I bother?” The message here seems to be to keep learning and trying new things.
This economy is complicated. It is in transition. We all may have to muddle through for a time for things to get better.
But, we can say with some confidence that they usually do.
Peter
Tag Archives: wages
HOW WILL YOU RETIRE WITHOUT AN IRA, 401(K)?
#ira #401(k), #retirement #savings
The share of American families that have IRAs or 401(k) retirement plans has spiraled down in the past decade, while the amount of assets in the accounts of people who have them has been climbing during that time.
So reported Tim Grant of the Pittsburgh Post-Gazette, quoting the Washington, D.C., based Employee Benefit Research Institute. It reported that the percentage of all families with an individual retirement plan, such as an IRA or 401(k), decreased from 52.8 percent in 2001 to 48.2 percent in 2013.
“For many families, individual account retirement plan savings constitute most of whatever financial assets they have,” Grant quotes Craig Copeland, senior research associate at EBRI.
The bevy of concerns these numbers produce is staggering. What will happen to fewer than 50 percent of the 76 million Baby Boomers, who for the next 18 years will be turning 65 at a rate of 8,000 a day? Grant quotes Thomas Mackell, former chairman of the Federal Reserve Bank in Richmond, Va., who believes many people are unable to save for long-term financial needs because U.S. wages have gone down, not up.
Yet, Grant quotes Mackell, those who have had the ability to save for retirement have benefited from a rising stock market.
Certainly, during the recent Great Recession, many have tapped into their retirement plans early, just to survive. But, they will pay a potentially huge price for that decision down the road.
When one is in middle age and loses a job, and can’t readily find another – or at least one that pays as well as the one he lost – he can feel very desperate. Not only has he lost current income, he potentially has lost the pension he was counting on. Social Security alone isn’t going to provide anyone with a good retirement.
If you are feeling desperate and are tempted to liquidate your retirement savings, stop! Get some financial counseling. Find a way to get through your rough times without sacrificing your future.
Remember, people are living longer. Retirement periods are lasting longer. Don’t let your money run out before you die.
Fortunately, for as many concerns about retirement savings that the ERBI numbers raise, there are many solutions as well. There are many ways to make a potentially great income that have nothing to do with traditional employment. For one of the best, visit www.bign.com/pbilodeau.
Not every income solution is for everyone, so examine them with care. But don’t shy away from looking if you believe you have to dip into your retirement savings early.
If you are young, start an IRA or 401(k) immediately. If you can, contribute the maximum amount you are allowed to. It wouldn’t hurt to check out other income streams, too, because even if you have a great job now, don’t expect it to be there for your lifetime.
Most of all, as we plunge headlong into the holiday season, first and foremost, be grateful for the good things you have in your life. If you are having financial issues, don’t hesitate to ask for – and look for — help. Don’t do anything rash with your money. Think not only about today, but the many years you potentially have left to live.
It’s not good to solving a financial problem today by messing up your financial future. The “help” you thought you were going to get in your elder years may not be there when you need it. YOU have to act, and the sooner, the better.
Live as well as you can for as long as you can. Remember, everything in life is about your choices. Choose wisely.
Peter