How Bad Do You Think The Economy Is?

[Harvey]

It's bad. After graduating college, the only paying job I've been able to score in four months has been part time work (10-20 hours per week) that I got with a family connection (my brother held the job before I did, but he's gone off to college). Most days it seems like there's nothing in the newspaper's classifieds within a 100 miles that isn’t medical, dental, or requires years of experience. Trader Joe’s, a retail/grocery outlet chain, moved into town a few weeks ago. When they began accepting applications, they had over 1,000 that were submitted in person in a 48 hour period. For a handful of retail positions with lousy hours.

I've done state government work for two previous summers, and been able to get these jobs no problem. Right now, the state isn't hiring anybody. And Washington is supposed to be better off than a lot of other places.

 

[Bloodwhiner]

While I've kept my job so far and avoided any major issues, it is still a scary time. I know plenty of folks who aren't so lucky. My company has cut 25% of it's workers, te rest have not seen any payraise in two years and further cuts are coming as we are losing nearly $2 million a month. I think my position is safe for now but longterm I'm concerned as I need 5-7 years to retire.

What I think is going to set things back is the unemployment. It is going to be very, very slow to rebound. Companies have discovered they ca get by with fewer workers. The ones they have will work harder because of the fear factor. So even when the economy does turn, many businesses will resist hiring additional workers in order to improve profits.

Some vocations will be even worse off for longer, like construction. Home construction will be off for years because of the glut of available prebuilt homes.

 

[Holdfast]

Did the stimulus and bailouts help?

Market economies are self-healing providing they don't go into cascade failure (think what happens to a power grid - huge amounts of redundancy, but go beyond a certain degree of breakdown and everything just shuts down sequentially). There was a risk of this happening in the banking/finance industry this time last year after Lehman went down. Probably only about a 20-25% chance, but the potential consequences were too profound not to act. It would have been the end of the capitalist system for a generation.

So yes, the banking bailouts were absolutely necessary (though I personally hate them).

The rest of the bailouts? Pointless wastes of taxpayer money in the grand scheme of things. Stimulus/QE? Relatively pointless waste of money, since it's just going to stoke inflation in the medium to long term as it's going to be very difficult to withdraw it at just the right time. The non-banking bailouts, stimulus/QE and these other extraordinary measures were political responses beyond core economic necessity in terms of preventing complete market failure. Whether they're right or wrong depends on your political perspective. Most (not all) of the banking bailouts were core economic necessity, distasteful as they were at the time.

 

[nevermore]

This past summer, I was looking into moving on, and when I opened up the newspaper, there was maybe a quarter of a page of job opportunities normally. One day there were only five jobs listed. Five. The job search on the Internet isn't much better. Jobs are few between in type and location.

Well, you have to take into account the general decline in newspaper classified advertising when comparing these things as well. Print classifieds are very expensive and reach an increasingly limited audience; most jobs are only advertised online now.

Anyway, I haven't been personally affected too much, though there is a wage and hiring freeze at the University where I work because of decreased grant revenue (which has turned around a bit with over $10 million in stimulus grants for the med school) and the hit our endowment took in the market. I got my raise though, as my annual review came up just before the start of the freeze in July; if it continues into next fiscal year, I may have to miss a raise unless we can get around it. My position is funded by grants, which are getting harder to get, but fortunately, we are mainly funded by international agencies like the UN and ISTR, and our grants have several years left on them anyway, so we're ok for now.

On the other hand, my dad has had to move his business into his home for the time being to cut costs because the industry he's in is reliant on new construction of hotels, hospitals, retirement homes etc., and that has obviously dropped off. And several of my friends who worked for the Baltimore Opera Company were laid off when it shut down last year. They've been able to get by on gig work and part-time jobs or by taking tide-me-over jobs in other industries. Locally, we've probably been hit less-hard than many other places due to a relatively recession-proof business base (medical tech, short-hop tourism, government, large nonprofits, education, research, etc.).

 

[Captain Shaw]

Where i am from it was mainly temp work available before the shit hit the fan so no different there.
But what is worst now is that because even the temp jobs are becoming rare the agency's don't have to follow the law about giving you your holiday pay or in some cases wages that are owned to you when you get laid off.
And to make matters worst it takes longer for a claim to go though when you need to apply for the dole.

 

[pookha]

no one i know who has gotten laid off over the last year has found a full time job.

at most they have put together two or three part time jobs.
if that.

 

[Kail]

Some places definitely got hit harder than others. I really didn't notice much of a change around my area. In fact, it seemed like the economy was still booming around here. While reports of unemployment were all over the news, I kept seeing lots of new businesses being built. There really is no lack for jobs around here.

Now, I work in a restaurant, and I have seen a decrease in customers, but part of me wonders if the economy is actually that bad or if people around here are just giving into the hype.

Hype? My business has fallen 60% from this time last year. If things do not get better soon I'm going to loose my business and then my house. Hype? How dare you.

 

[tomalak301]

I found a job, but it has nothing to do with my degree. I'm almost worried I would have recieved the degree in vain and let it go to waste. I hope in the future that is not true.

(My degree was in accounting, and the job I found was a sub custodian, meaning janitor.)

 

[Holdfast]

Kraft seem to be indulging in comfort-eating to get through the recession, judging by today's news that they want to buy Cadbury's.

Seriously though, I'm fairly well insulated from the economic downturn. Mind you, one of the businesses I run has seen fewer clients since the end of last year but it's starting to turn around recently. I like to have several different revenue streams so if one goes down, the others can compensate a bit. My main job at the moment is taxpayer-funded, so is safe, but I'm aiming to quit/downsize it in a couple of years time for a more portfolio-based approach to my career. By then, the economy should be recovering much more strongly.

 

[FPAlpha]

What I think is going to set things back is the unemployment. It is going to be very, very slow to rebound. Companies have discovered they ca get by with fewer workers. The ones they have will work harder because of the fear factor. So even when the economy does turn, many businesses will resist hiring additional workers in order to improve profits.

That's something that's a hot topic at work right now too.

Vacation season is almost over and even with about 25% of staff gone at any given time we still managed to hit our productivity numbers and exceed them (we have a number we have to reach which is calculated by workload and people needed to do the work).
Naturally these things get noticed and we have to report these numbers to our superiour who in turn give them to our customer.. recently some of our highest managers have been in our warehouse for talks on how to keep the people despite it being evident we can do the work with less people.

There have been some very uncomfortable decisions in the past and i fear more will come.. i got lucky and had my contract extended for a year (after that year it's about permanent employment) but many weren't and they are still looking for ways to cut costs (retiring fork lifts, cutting on the electricity bill, fewer investments etc).

It is rough and people are worried which leads to more infighting and strained nerves.. it can be pretty bad at times but we manage.. for now.

 

[Mallory]

My company just implemented mandatory pay cuts, 20% for management and 10% for everyone else. It was either that or layoffs and we preferred to keep the staff for as long as possible so we'd be in a good position when things get better.

 

[An Officer]

It doesn't seem to have affected my city all that much. People still shop like crazy.

 

[Hoser]

Now, I work in a restaurant, and I have seen a decrease in customers, but part of me wonders if the economy is actually that bad or if people around here are just giving into the hype.

It is that bad. Feel blessed that you live in a well insulated area. And there is still a lot of insulation due to government programs and unemployment benefits, so you won't see the food lines of yore.

I've gone back to work, thanks to cash for clunkers, and it's gone gangbusters because of that. I don't expect it to last forever, but it's insane right now. Of course, a lot of that is because shops that did the work we do have closed, so the competition is slim while the demand is large.
Then again, we just lost another line to Mexico.

 

[Holdfast]

What I think is going to set things back is the unemployment. It is going to be very, very slow to rebound. Companies have discovered they ca get by with fewer workers. The ones they have will work harder because of the fear factor. So even when the economy does turn, many businesses will resist hiring additional workers in order to improve profits.

That's something that's a hot topic at work right now too.

Vacation season is almost over and even with about 25% of staff gone at any given time we still managed to hit our productivity numbers and exceed them (we have a number we have to reach which is calculated by workload and people needed to do the work).
Naturally these things get noticed and we have to report these numbers to our superiour who in turn give them to our customer.. recently some of our highest managers have been in our warehouse for talks on how to keep the people despite it being evident we can do the work with less people.

Maybe the company SHOULD lay off some people, to better improve profits and help guarantee the jobs of the people remaining?

It's a delicate balancing act, especially if you're talking about highly skilled workers which you can't rehire/train-up easily if you later need to expand when things begin to boom again. But to use the principle that it's better to keep more staff on even if it means pay/hour cuts as the optimal way to manage a recession is flawed. It's sometimes right, and sometimes very very wrong and a way to guarantee a business goes to the wall.

I don't expect it to last forever, but it's insane right now. Of course, a lot of that is because shops that did the work we do have closed, so the competition is slim while the demand is large.

An example of how a recession is supposed to work - weed out the weaker businesses, let the rest survive and profit from the recovery and then hire more workers.

Of course, it's very easy to talk theory in the abstract, but one thing I've found interesting in this recession, compared to the early 90s one, is how much more willing companies seem to be to hold onto staff, by cutting wages/hours. I can't help but wonder if this sort of tactic will actually prolong the recession and also reduce jobs growth in the future as a result.

Essentially, it embeds underemployment (rather than unemployment) into an economy and such underemployment and reduced productivity has the potential to be hugely damaging in the medium/long term, especially if inflationary pressures creep in as a result of all the money supply games the central banks have been playing. Ho-hum....

 

[Commander Rabbit]

Did the stimulus and bailouts help? or were they just a waste of time and money?

Well, one piece of the stimulus package is definitely not a waste. For people who become unemployed through no fault of their own in 2009, the federal government is covering 65% of the cost of COBRA for nine months. That's an enormous help to those who might not otherwise be able to afford to continue their health insurance.

 

[Mallory]

Of course, it's very easy to talk theory in the abstract, but one thing I've found interesting in this recession, compared to the early 90s one, is how much more willing companies seem to be to hold onto staff, by cutting wages/hours. I can't help but wonder if this sort of tactic will actually prolong the recession and also reduce jobs growth in the future as a result.

It will keep us from hiring until the pipeline is overflowing again, but it also gives us an opportunity to improve our internal systems which will make us more efficient once the economy does turn around. In my company, we're down to people with over 15 years of experience with our customers and our products. That's not something you can easily replace when things get better.

 

[Holdfast]

Of course, it's very easy to talk theory in the abstract, but one thing I've found interesting in this recession, compared to the early 90s one, is how much more willing companies seem to be to hold onto staff, by cutting wages/hours. I can't help but wonder if this sort of tactic will actually prolong the recession and also reduce jobs growth in the future as a result.

It will keep us from hiring until the pipeline is overflowing again, but it also gives us an opportunity to improve our internal systems which will make us more efficient once the economy does turn around. In my company, we're down to people with over 15 years of experience with our customers and our products. That's not something you can easily replace when things get better.

I can definitely buy that argument, as I suggested upthread:

It's a delicate balancing act, especially if you're talking about highly skilled workers which you can't rehire/train-up easily if you later need to expand when things begin to boom again.

(only requoting that so the context of my comments retains consistency for any thread skim-readers! )

But when I hear of the same principle being applied in lower paid or less skilled jobs, I wonder at the wisdom. The exit from this recession is going to be pretty bumpy already and this may well add another roadblock. *shrug* I guess the proof will just have to be in the pudding and we'll have to wait and see.

 

[FPAlpha]

What I think is going to set things back is the unemployment. It is going to be very, very slow to rebound. Companies have discovered they ca get by with fewer workers. The ones they have will work harder because of the fear factor. So even when the economy does turn, many businesses will resist hiring additional workers in order to improve profits.

That's something that's a hot topic at work right now too.

Vacation season is almost over and even with about 25% of staff gone at any given time we still managed to hit our productivity numbers and exceed them (we have a number we have to reach which is calculated by workload and people needed to do the work).
Naturally these things get noticed and we have to report these numbers to our superiour who in turn give them to our customer.. recently some of our highest managers have been in our warehouse for talks on how to keep the people despite it being evident we can do the work with less people.

Maybe the company SHOULD lay off some people, to better improve profits and help guarantee the jobs of the people remaining?

It's a delicate balancing act, especially if you're talking about highly skilled workers which you can't rehire/train-up easily if you later need to expand when things begin to boom again. But to use the principle that it's better to keep more staff on even if it means pay/hour cuts as the optimal way to manage a recession is flawed. It's sometimes right, and sometimes very very wrong and a way to guarantee a business goes to the wall.

There have been lay offs this year.. most temp workers are gone and several people didn't get their contracts renewed.

I'm on vacation for the neext two weeks but before leaving last week our department that handles incoming goods reported that they'll be having a hard week now because their workload will increase by about 100%.

We don't know yet if this is just a coincidence or the start of our usual fall business (which we didn't have last year), i.e. one of the busiest times usually or if it will be over soon. As it stands they need support from all departments now, have restructured their shifts increased work time from 8,4hrs to the maximum of 10.

I'm keeping my fingers crossed that this will be it.. the sign that we return to a safe business where there's enough work so we don't need to let other people go (won't be as good as 07 and 08 for quite some time) but we don't know yet.

This insecurity is what's killing the people.. no one can make long term plans.

 

[Hoser]

An example of how a recession is supposed to work - weed out the weaker businesses, let the rest survive and profit from the recovery and then hire more workers.

Idealist.
As it's happened in my life, it's more like too many people take too much out of the pot, the system collapses and whoever didn't have enough out of the pot at the time loses.
It'd make a fun board game.

 

[Mallory]

I can definitely buy that argument, as I suggested upthread:

It's a delicate balancing act, especially if you're talking about highly skilled workers which you can't rehire/train-up easily if you later need to expand when things begin to boom again.

(only requoting that so the context of my comments retains consistency for any thread skim-readers! )

I don't know how I missed that since I've been following this thread pretty closely, but I did.

Apologies to all.