This is what the Republican Party has handed you
and will continue to if they take the Senate and other echelons of
power. Democrats, in truth, need to re-take the House, keep the Senate
and give this president a chance to do what needs to be done. Read and
heed
the following article, learn why it does not feel like we have emerged from a recession and then pass this on.
Highly Educated, Unemployed and Tumbling Down the Ladder
By Martha C. White
In
the upside-down, topsy-turvy world of jobs these days, even an advanced
degree can’t protect some Americans from tumbling down the economic
ladder.
The conventional wisdom
that more education bears fruit in the labor market gets turned on its
head when it comes to unemployment. For people with masters and even
doctoral degrees, long-term unemployment is especially insidious. At
best, these formerly high-earning professionals face the prospect of a
years-long climb back to their former level of income and stature, while
they delay retirement to rebuild their decimated nest eggs.
Others won’t be that
lucky. Debt, foreclosure and evaporated savings push them out of the
middle class, and some just keep falling.
“Most of these people in
this long-term unemployed category are experiencing downward financial
mobility,” said Carl Van Horn, distinguished professor of Public Policy
and director of the John J. Heldrich Center for Workforce Development at
Rutgers University.
Nearly half of the
long-term unemployed in a Rutgers survey published last month estimate
it will take up to a decade to rebuild their finances. More than 20
percent say it will take more than a decade, or that they’ll never
recover. The highly educated are “actually in worse shape because they
had farther to fall and had greater financial liability," Van Horn said.
42 and Living With Roommates
“I’ve
had to seriously downgrade my living situation,” said Alex Gomez, a
42-year-old with a master’s degree in entrepreneurship. Gomez lost his
last full-time job in 2009 and has been looking for work since a
short-term contract position ended in 2012.
Gomez’s home was
foreclosed on, so the Tampa resident lives with three roommates in a
college neighborhood. He drained his 401(k) trying to save his house,
and he has around $150,000 in student loans. His mother is tapping her
401(k) to pay his rent. Gomez subsists on that and about $200 a month in
food stamps.
“I applied to a supermarket as a deli clerk because I used to be a deli clerk as a teenager.”
“I have been applying
and looking for pretty much anything at this stage,” he said. Although
he’s looking for work in engineering or data management, “I applied to a
supermarket as a deli clerk because I used to be a deli clerk as a
teenager,” he said. He was told he was overqualified and turned down.
“Even though jobs have
been slowly recovering, these are mostly low-pay, low-wage jobs,” said
Ofer Sharone, a professor at the Massachusetts Institute of Technology’s
Sloan School of Management and founder of the Institute for Career
Transitions, a platform that helps the older professional unemployed
reenter the work force. “We don’t have enough jobs that require those
levels of education right now.”
In a survey of 800
jobless professionals conducted by the Institute for Career Transitions,
about 10 percent of the short-term unemployed had doctoral, law or MBA
degrees. Among the pool of long-term unemployed, more than 18 percent
held such degrees.
“I’ve seen clients who
had to downsize, sell their homes, move into a smaller apartment, take
in boarders… it changes everything,” said David Blustein, a professor at
Boston College’s Lynch School of Education. “The financial consequences
of long-term unemployment are hugely significant and very painful.”
Wiped Out by Student Loans
Student
loans are an especially thorny issue. The U.S. Government
Accountability Office finds that 3 percent of households headed by
someone age 65 and older carry student loan debt, and the amount of
outstanding federal student debt carried by this age group shot up from
$2.8 billion in 2005 to $18.2 billion last year.
“The reality is a lot of
people have gone back to school later in life, gotten MBAs or other
degrees later in life, and the student loans are still there,” Blustein
said.
“Financially, I’ve been
sort of wiped out,” said Brian Maimone, an equity researcher in New York
who, despite his MBA, has been unable to find work since being laid off
five years ago. “I’m at a point now where I’m working at a car wash on
weekends for cash flow purposes. Any job is a real job as far as I’m
concerned,” he said. “Anything that could be liquidated has already been
liquidated.”
“Anything that could be liquidated has already been liquidated.”
Reclaiming
professional and financial stability is a long journey. “If you’ve been
out of work for a year or longer, your road back is not a one shot
deal,” said Joe Carbone, president and CEO of job training and education
provider the WorkPlace Inc. “You have to look at it from the standpoint
of two or three years.”
“For those individuals
who have very advanced degrees and a good length of experience, it does
become more difficult,” said Patricia Malone, executive director of the
Corporate Education and Training program at Stony Brook University,
which trains out-of-work professionals in project management. “They are
competing against people who are 10 years younger,” she said. “It takes
longer.”
Wayne Little can attest
to this. An MBA who worked in sales at IBM for more than three decades,
the 60-year-old has been looking for work after being laid off more than
two years ago.
Little said he has sent
out “well over 1,000” resumes and regularly logs five to six hours a day
working on his job search. “I hadn’t looked for a job for 30 years,”
Little said. “The world has changed… I was not prepared for the new
world of searching for jobs.”
Little’s family is
leaning on his wife’s income, but with three kids around college age, he
has tens of thousands of dollars in student loans, and he estimates
about half of his 401(k) has been drained to pay basic expenses. Little
said keeping their heads above water means cutting out “frills,”
middle-class niceties most Americans take for granted, until they’re
gone.
“The front walk is
falling apart… Some of the things in the house we'd normally take care
of, we're not.” Little’s car has well over 200,000 miles on it; his
wife’s has 150,000. They don’t spend money on entertainment or gifts
anymore. Maintenance around the house has been deferred, he said.
“We're not desperate,
but we will be,” he said. "I've looked at jobs that pay half of what I
was making at IBM and I would've taken them in a second.”
“I was making six
figures at one point, and now I’m making $13 an hour temping,” said Lisa
Casino-Schuetz, a single mother with a master’s degree who has taken a
string of low-paying jobs to provide for her two college-aged kids.
The Psychological Toll
“In
a nutshell, it's devastating,” Blustein said. “The psychological
consequences are enormous… As people have to take lower level positions,
it does confront their own sense of worth in a pretty negative way.”
Even working,
Casino-Schuetz makes so little that she rents out a room in her house to
a boarder for $500 a month. Her home and a condo she owns are both in
foreclosure, and she has had her electricity shut off in the past.
The elimination of
emergency extended unemployment last year made things worse, since
long-term jobless professionals have to start liquidating their assets
sooner.
“Across the board, the
people who exhaust long-term benefits get a lot poorer," said Josh
Bivens, director of research and policy at the Economic Policy
Institute. New EPI research finds that only about a quarter of jobless
Americans are drawing unemployment payments, down from a high of about
two-thirds in the immediate aftermath of the recession.
I probably won’t retire. I probably will be working until the end the way things look now.”
Without
unemployment benefits, the long-term unemployed must draw down their
assets, which presents its own set of serious consequences. Once that
money is gone, these families have no financial security today or for
retirement.
“Some of them will never
get back into the work force,” Van Horn said. “Those people...
especially folks in their mid-50s and up, they’re going to be in very
bad shape financially because they can’t even take Social Security
already," he said. What's more, the benefits they eventually will be
able to draw will be less than if they had worked through retirement
without interruption.
"You’ll basically have
more low-income older Americans,” he said, who will rely more on safety
net programs like food stamps and heating assistance.
“Right now, retirement’s
out of the picture,” Maimone said. “I probably won’t retire. I probably
will be working until the end the way things look now.”
