Continuing the idea that we need a new kind of financial advice:
The “old” financial advice model, by which I also mean the current financial advice model, presumes that you’re going to have a job at all times. Technically, it knows that you aren’t going to have a job at all times, but it brushes that uncomfortable truth into the corner by quickly shouting something about a three-to-six-month emergency fund.
And, of course, if you don’t have a job, you are advised to immediately trot on down to the nearest Walmart, Starbucks, or nurse’s aide training program.
Never mind that these jobs are not known for their long-term stability, and never mind the fact that you can’t get a coffee shop job just by asking. A link was bouncing around the internet yesterday about 1,701 people applying for eight Costa Coffee jobs (I only now realized that the story is a year old but probably still makes its point), and the last time I was in a coffee shop a man literally walked in, shouted “is anyone in this industry actually hiring?” and then argued with the barista before stomping out.
And here’s another set of statistics to consider, from Fred Clark writing at Patheos:
What unemployment means is that there are no available jobs. It means that X number of people are being denied work. The unemployed are not those who refuse work, or who do not seek work, or even those with poor “job-seeking” skills. The unemployed are that percentage of the population whose right to earn a living is being denied to them. The 7 percent or so unemployment rate we have had in the years following the crisis year of the Great Recession refers to the percentage of the work-force for which no jobs exist to seek, to find or to fill.
This is why the better measure of unemployment is the ratio of job-seekers to job openings. That ratio has not sunk below 3 to 1 since the Great Recession. That means that if in a single miraculous instant, every mismatch of geography, skill-set and pay-scale were met and every job opening were filled at once, then two-thirds of our unemployed would remain unemployed. And at that point there would be no reason for any of them to send out résumés, brush up on their interview skills, or do any of that other victim-blaming make-work we expect them to do, unpaid, until such time as someone deigns to allow them to earn a living again.
So any kind of new financial advice has to include the expectation of unemployment. Either it’s going to be unemployment from not being able to find work, or it’s going to be unemployment while taking care of a child, parent, or other loved one.
We’re going to be unemployed, and it’s not going to be for some three months while we burn down our emergency fund before skipping off to start a new life at Starbucks. That means we have to start handing out some new financial advice.
What is this new financial advice? This is a serious question, because I don’t know the answer. “Woooo savings” makes sense, but a lot of us are already living modest paycheck-to-paycheck lives. You may have seen that “Switzerland wants to offer all of its citizens $33K a year regardless of employment status” thing bopping around on Tumblr, but, while that would solve the “financial advice” problem, the Swiss Basic Income plan is nowhere near reality yet (and also it would only apply to the Swiss).
What advice do you think we should include, when we’re discussing planning our finances to include periods of unemployment?
Photo: Justin Ennis