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A change for the better

>> In news that took experts by surprise, the Bureau of Labor Statistics said the economy lost only 11,000 jobs in November. That compares with an average of 135,000 per month in the three prior months.

There was more good news: The unemployment rate slid down from 10.2 to 10 percent. Employees worked more hours. The weekly wage went up. And employers hired 52,000 part-time workers—often a prelude to hiring people full-time.

All of which does not necessarily mean the employment picture has permanently brightened. A jobless rate of 10 percent is still very high, and there are still over 15 million people unemployed or under-employed.

Beyond that, other problems loom (see “About those rosy forecasts”). Banks are still tight-fisted with loans, which puts a choke-hold on growth. Banks, in fact, are still in trouble because of bad loans made years ago. The FDIC has taken over more than 130 banks in 2009—and has over 400 banks on a watch list. Massive deficits threaten to spark inflation. And we’ve just added to the deficit with a major move into Afghanistan. Bottom line: Keep the party hats in the closet.

10.2% a nasty surprise

> > Economists expected the unemployment rate to exceed 10 percent—but not until 2010. The U.S. Labor Department released figures showing a rate of 10.2 percent for October, which came as a nasty surprise. The new figure for total unemployed rose to 15.7 million, though the effective figure is much higher (see next article in JOBS).

The stock markets did not plummet because there are bright signs elsewhere in the economy (see GOOD NEW BITES), and even within employment. One example: The number of workers applying for unemployment benefits in October dropped to the lowest level of the year. So while more and more people are becoming unemployed, they are doing so in consistently decreasing numbers.

Still, 10.2 percent was unquestionably bad news, especially in light of the facts noted in the next article.

Job picture worse than it seems

>>Optimistic analysts say the economy has turned a corner, but many quickly add that it may be a “jobless recovery.” They’re referring to a developing consensus that the employment picture may remain bleak well into 2010. The U.S. Labor Department has provided plenty of ammunition for this gloomy view:

All of which may sound bad, but the actual picture is worse. Department of Labor statistics do not include at least 3 groups: People who have part-time jobs, but want full-time. People who didn’t look for work in the four weeks prior to the latest survey and therefore weren’t counted. People who are technically employed, but are on unpaid leave.

Add it all up, and the national unemployment rate may approach 20 percent. As if that weren’t bad enough, there’s also the factor of how long people have been unemployed. The official average time has increased to over 24 weeks.

There’s no shortage of reasons to expect that the worst is yet to come: Credit remains tight—banks aren’t lending at anywhere near a normal level, except to giant companies. That means thousands of companies all over the country can’t operate at full tilt and, in many cases, can’t meet their payroll. To make matters worse, CIT, which lends money to over a million small businesses, is in bad shape financially. Bankruptcy would, at least for a time, cut off the cash its clients need to operate and grow. Some financial pundits say the banking system will require another huge infusion of cash before there’s any hope of a normal level of lending.

Nor will hiring shoot up when the recession is technically over. There’s too much slack in the system. Employers will convert their part-time and on-leave workers to full-time before they hire new employees. There’s also over-supply in many industries. In housing, for example, a 10-month supply of existing empty homes will have to be filled before many new ones will be built—bad news for construction workers.

Another problem is the global scope of this recession. China and India are doing well, but Europe has been hit hard. The upshot: a big drop in U.S. exports. First quarter U.S. exports were down 30 percent. That means fewer jobs in export industries and more hunkering down by export-oriented companies.

Self-defense: First, do everything you can to avoid being fired. Within your current department, volunteer for long-term projects, even if you have to make one up. Become known for your willingness to work long and hard. Suggest new ways your company can weather the recession. Outside your department, look around for a part of your company that may still be in good shape and see if you can edge over there, without risking your current job. Tough, but possible.

Network like crazy outside your company. Sign up on sites like www.linkedin.com, as well as relevant job hunting sites, like www.indeed.com, www.monster.com, and www.careerbuilder.com. Go to www.quintcareers.com for a list of the top 50 sites. Hunt by using your credentials, not your real name.

If you’ve already been fired, learn how to negotiate a good severance package (type “negotiating severance packages” into Google). Ask your company to add unused vacation and sick days to your last check--and see if you can extend your health coverage. Apply for unemployment benefits right away; it takes a few weeks for your first check to arrive. Check the Labor Department’s www.CareerOneStop.org for useful facts, including how long your benefits may last. Also worth a look: www.TheCorporateFox.com, especially chapters 10, 15, and 16.      

Finally—and this is a tough one—consider moving. The impact of the recession varies greatly by location. Check www.money.cnn.com/pf for a list of the best places to find a job. Then match that list against Money magazine’s list of the best places to live: www.money.cnn.com/best/bplive/.


How to make the best of a bad situation


Copyright © 2009 Richard Evans and Andrew Bromberg