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Retirement Planning: In a Tight Labor Market October 28, 2008

Posted by retirementwithaplan in retirement.
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While many people expect the next leg of this financial crisis to happen in credit cards and auto loans, the real problem will be even easier to spot and contribute to a much greater degree to the deepening possibility of a prolonged recession. The problem will come with jobs.

New data on the labor markets is not pretty. Throughout the Bush administration, job creation has been just below adequate. The economy, to be running on even a creating enough jobs to stay that way, must provide at least 150,000 a month. This number accommodates all newly eligible job seekers either fresh out of high school or college. But even when the economy was on much sounder footing, those jobs did not materialize.

Latest evidence points to a much higher long-term unemployment rate, where folks who have been unable to find work for 27 weeks or longer now number 21% of the total unemployment figure. The average hours worked in a given week has fallen by 11% while the unemployment rate, which no longer captures those who have used all of their available benefits and those who no longer are looking for work, has climbed to 6.1%.

In years past, the force you exerted in the workplace could help you keep your job when other jobs were in jeopardy. Advice such as becoming Indispensable (once referred to as the first and foremost workplace survival rule) is not so easy anymore.

Neither is gaining the competitive advantage, realigning career goals and objectives Into Sub-Objectives, or simply by making things happen. Asserting yourself in good times does help your boss to see both you and your skills in a different light but drawing attention to yourself might work in the opposite direction. Even the old standby of affiliating yourself with optimistic and positive people becomes more difficult in difficult times.

So what works to keep you working?

Only preparation. On only the rarest of occasions does your layoff come as a surprise. Companies and supervisors often have great difficulty with hiding bad news. Be aware of your surroundings and don’t wait for the ax to fall where it may. If your job goes, waiting until that moment to explore your options may be too late. Numerous other employees in similar fields are probably facing the same dilemma and will be looking for the few jobs that may be out there.

Preparing yourself for this sort of change is never easy. The hardest part is acceptance of your fate and re-tooling not only your outlook and your resume, but also your focus on where you want to be. You can achieve this by doing two things:

First, get your financial house in order. Gear down for the possibility that the job hunt will be longer than you anticipated. Spending while you are working should stop and be redirected to that under-funded emergency account. Begin to develop new skills while you are employed and continue to develop them after the job loss. It is too late to do either of these things once the job disappears.

And lastly, don’t pigeon hole yourself. Explore every opportunity. It is widely believed that the next wave of mortgage defaults will come from mortgage holders who have lost their jobs. Do something now to offset that possibility.

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