As we pointed out in 1.2 Million Will Lose Job Benefits By Christmas, the situation is getting desperate. The government reports that we are out of recession. The President says that his policies have helped us to avoid depression. And Senate Majority Leader Harry Reid says he, alone, was responsible for saving the world from economic catastrophe.
The reality, however, is exactly the opposite, as pointed out on CBS’ 60 Minutes:
The economic jam we’re in has topped even the great depression in one respect. Never have we had a recession this deep with a recovery this flat. Unemployment has been at 9.5% or above for fourteen months. Congress did something that it’s never done before. It extended unemployment benefits for 99 weeks. That cost more than $100 billion, a huge expense for a government in debt. But now, for many Americans, 99 weeks have passed and there is still no job in sight.
It is only going to get worse. One of the interviewees in the CBS report provides insight into exactly how this is going to play out, and it is something I have tried to explain to our 3rd grader, who is attempting to understand what an economic recession means and why we’ve cut his weekly allowance from $7 to $4.
Though the CBS report makes mention of the U-6 unemployment rate, which is roughly 17%, the actual unemployment rate is above 22%, meaning that over one in five Americans are currently unemployed. On a household basis, 28% of households have at least one person who is without work and unable to find work — that’s nearly one in three.
The business owner from the CBS report says that her small business is surviving month to month, something that millions of small businesses across the nation are facing. As more people lose their jobs, less people spend money with local and small businesses. As money contracts, so too does the small business base. As small businesses are eliminated, so too are jobs. The cycle will continue to negatively reinforce itself like this for months, probably years to come.
Many of those in the CBS report were, at one time, top-tier business professionals. Today, they have been unemployed for over two years, spent all of their savings and retirement money, and are literally on the brink of homelessness in many cases.
Even if you are employed today, you are not guaranteed to have a job tomorrow.
As such, consider finding alternate income streams now, today. Is there anything that you can do with your skills today to generate more revenue for savings and emergency funds tomorrow?
It’s better to prepare today, rather than the day after you lose your job.