Posted on 08/04/2009 7:59:07 AM PDT by SeekAndFind
RIVIERA BEACH, Fla. — Chuck Dettman said he had not really considered the notion back in 2001 that he and his friends in a job-search support group would never recover from being laid off.
The country was in a recession then, as now, and the professionals who had just lost their jobs met weekly at a local job center to network and trade advice. Despite the national economic problems, they remained confident that they would not only find work but would also be compensated as they had been in the past.
Eight years later, however, most of the people who formed the core of Mr. Dettman’s group have not made it back to their old income levels, even if they eventually landed jobs.
“I think there’s maybe only one or two that have been successful in making what they did then,” Mr. Dettman said.
Taken together, their struggles are stark illustration that it can take years for a worker’s earnings to bounce back after a layoff, and that it can take even longer for a layoff during a recession. Economists, in fact, say income losses for workers who are let go in a recession can persist for as long as two decades, a depressing prognosis for the several-million people who have lost their jobs in the current recession.
“On average, most workers do not recover their old annual earnings,” said Till von Wachter, an economics professor at Columbia University, who recently completed a working paper with two other economists that examined the long-term earnings of workers who lost their jobs in the recession of the early 1980s.
Mr. Wachter studied workers who had been with their companies at least three years, then lost their jobs when their employers reduced their work forces by at least 30 percent.
(Excerpt) Read more at nytimes.com ...
Amusingly, the NYT is blocked as “PORN” at my office.
It’s legalized “presstitution.”
On average, most workers do not recover their old annual earnings”
...that was my experiance...I went from $60K/year to $9.00/hour as a temp.
But....
But....
“Unemployment is a lagging indicator!!”
Everythings all better, now!!
/completely gratuitous ‘sarc’ tag
Taking two decades to recover seems a bit far fetched, but I guess that could depend on the career. Right now, it would be two decades to never before a laid off autoworker sees their income return.
this is especially true the older you are. If I lost my “low six figure” job today, I simply would not be able get the same job at another firm. My job is unique, and I’d have to go to a different company and start again at the bottom. Plus at almost 50 years old, it would be a real question if I’d ever get back to where I was.
Moral of the story: save well during the fat years, to have reserves during the lean years.
I think its a timing thing. Most of these people came of age either during or after the Reagan Revolution. Times were VERY VERY good and people were paid more money in the good times. But, this kind of economic boom doesn’t happen very often. Maybe twice each decade. So, they are finding that the normal earning level for their level of training and skills. Save money and build wealth in the good times (liver frugally and save up reserves) so you can maintain that lifestyle in the bad times. If you live to the max in the good times, then, you feel like you’ve slipped backwards in the bad times. THERE ARE NO GUARANTEES IN LIFE...
That’s a good point, I did not think about the age thing.
...ping...
Good thing “Wife Unit” starts teaching next week...
I’m running out of bon bons, and Oprah is getting to bore me...
I can’t watch FauxNewz anymore...Too depressing...But if I watch the stte controlled media, I “feel” a little better...
“That’s just a sad fact of life. You cannot reverse the effects of ageing.”
...I was 55 when I got the boot...but I walked away with $732,000 because over the years I had amassed a lot of shares in the company...my advice to any young worker just starting out is to save like hell, because the day will come when you get old and expendable.
” Consider this as an analogy — an NBA player is his late 30’s ( unless he is a superstar ) will usually not be paid the same salary he used to get when he was in this 20’s. “
False analogy — extrapolating a ‘special case’ (the vast majority of jobs do not require, nor pay for, the special physical skills of a star athlete) to the general universe....
In the vast majority of cases, the general rule is “Age and Experience will defeat Youth and Enthusiasm every time”....
That's also true of beauty. A woman's physical beauty peaks some time in her 20s, then depending on her genes and lifestyle has some hang time, then it's downhill. The eyes are about the only body part that retain their beauty from youth to old age. Brains and personality have a much longer hang time than beauty.
There definitely is age discrimination in the market place. One very effective reason is that one can hire someone with an adequate background capable of doing the job (maybe not as well an the older person) at 1/3 to 1/2 the salary.
And so it has always been. In addition, and older person may not have the latest technical skills that a recent graduate has even though they could easily learn them. A non technical boss goes for the newer skills.
One has to become pre eminent in his field to really be secure.
Wish we had taken your advice earlier. My husband was laid off at age 58, and we are OK for now, but I don’t think we will recover, as this article says.
And some people wonder why few are spending money?
At the rate were going, eventually Americans will be giving canned food for Christmas gifts.
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