Facing a Jobless Reality
If you haven't cut back your spending or worked to get yourself out of debt by now, maybe the news from last Friday's sobering unemployment report will jolt you into action.
The latest Labor Department figures show that in January, 598,000 jobs were slashed -- the most since 1974 -- pushing the unemployment rate to 7.6 percent.
"If the jobless rate keeps rising at the pace it has for the past two months, it will hit double digits in summer and reach its highest rate since the Great Depression by the fall" writes Post reporters Neil Irwin and Annys Shin. "Companies in nearly every sector of the economy have cut jobs or announced that they would take other steps to save on costs, including freezing or reducing pay or eliminating contributions to employee retirement programs."
While the White House, Treasury Department and Congress feverishly work on a financial rescue plan to pump more money into the economy and stimulate job growth, there are things you should know in case a pink slip lands on your desk. Read my column from June on what to do if you fear you may be laid off and what to do once you are unemployed.
Read these stories from today's newspaper for the latest developments:
* Out of Work and Challenged on Benefits, Too (By Peter Whorisky, Feb. 12)
* Congress Reaches Stimulus Accord (By Shailagh Murray and Paul Kane, Feb. 12)
To keep tabs on what the government is doing to help, check out Economy Watch for daily updates, the latest headlines and a snapshot of what's happening in the crisis.
Live Q&A Today
Are you worried about your job, or how best to handle your finances? Bring your questions to my Web chat today at Noon. If you miss the discussion, read the transcript to see if anyone asked a question you may have.
Also, please note, this month's Color of Money Book Club chat will be on Wednesday, Feb. 25 at Noon ET, instead of the usual Thursday time.
Layoffs 101: What if You're the One to Fire?
Post Vice President Ben Bradlee and Business columnist Steven Pearlstein recently elicited multiple perspectives about how companies should execute laying off personnel and slashing expenses, as part of their On Leadership, online panel discussion group.
Michael Useem, from the Wharton School of the University of Pennsylvania suggests providing "as many forms of personal support as possible" such as employment counseling, placement services and temporary extensions of medical and dental benefits.
President and CEO of the Peter G. Peterson Foundation, David Walker, who once served as the U.S. Comptroller General advises cutting back on hours instead of laying off workers.
The majority of the panelists say that downsizing is very risky: Not only does it hurt the economy but also it can hurt the company.
Making Wise Choices
Nadya Suleman, also unemployed, may be taking the idea of loving her family one step further than what her financial reality can maintain, most likely setting her up for disaster.
If you don't recognize her name, she's the California single-mother of six who gave birth to octuplets using in-vitro procedures. Once the newborns are released from the hospital, she and all 14 children will be living with her parents. It's been reported that her father will go back to work in Iraq to help support the expanding family.
But take a look at this from an Associated Press report:
"An in-vitro procedure typically costs between $8,000 and $15,000. Asked on NBC how she was able to afford the treatments, Suleman said she had saved money and used some of the more than $165,000 in disability payments she received after being injured in a 1999 riot at a state mental hospital where she worked. She also told NBC that she does not intend to go on welfare, though her publicist confirmed Monday that Suleman already receives food stamps and child disability payments to help feed and care for her six other children."
What do you think of Suleman's family money management? Should you consider your finances before having more children? Tell me what you think. Send your comments to email@example.com and put "Eight More" in the subject line. Insights from those working in the medical field, child protection agencies or economics would also be appreciated.
Also, if you too have a large family and may be are worried about how to feed your family a health meal during the receesion, read advice Kate Gosselin, which was featured in a recent column by Post Health columnist Jennifer Huget: An Organic Diet for a Family of 10? Yes, She Can. (Feb. 3).
Unfortunately, there are always a few that take advantage of a desperate situation. The Big Money reports about a guy named "Bailout Bill," who set up a booth in New York's Times Square and handed out money to strangers last Tuesday.
All he asked was that visitors tell him why they needed the money. They were promised anywhere from $50 to $1,000 reports Chadwick Matlin.
Hundreds of people lined up to tell their story and collect their share. He also offered his Web site as an alternative to waiting in line. But, the booth was only a gimmick; Bailout Bill is actually the shady figurehead of a new "video-classified-ad site" who wants people to take out sketchy loans.
There's no such thing as a free lunch, people. And yet, posted on the Web site are thousands of pleading messages. "The man who can't afford his daughter's C-section because he already spent all his money on a cashew tree is a personal [posting] favorite," says Matlin.
But overall, I couldn't agree more with Matlin's statement that "It's a reflection of the recession's ability to strip its victims of agency. We need the help because we are helpless."
Check out the full report: The Way We Beg (Feb. 5).
I also want you to read this story as a warning. As the economy gets worse -- and it probably will -- please be careful about falling for schemes and scams that prey on your fears. Stay away from get-rich-quick business opportunities that will just live you broke fast.
You are welcome to e-mail comments and questions to firstname.lastname@example.org. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.
Charity Brown contributed to this e-letter.