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Tuesday, October 13th, 2009

High Unemployment Leading to Higher Job Competition

With unemployment teetering at 10% and many businesses reluctant to hire, it should come as little surprise that job competition is stiff. A new report by MSNBC shows just how stiff: there are currently 6.3 unemployed workers on average competing for each job opening.

According to the Department of Labor, job competition is up from 1.7 workers per opening in 2007, when the current recession began. DOL has been tracking job competition statistics since 2000.

Employers have cut a total of 7.2 million jobs since December, 2007, and while that rate is slowing, job creation is not expected to recover any time soon.

Many economists predict the unemployment rate to peak at 10% next year and remain at the current level throughout most of 2010, creating a difficult job climate for millions of competing unemployed Americans.

According to a September report by CNN, the federal stimulus has created or saved 1 million jobs, helping to stem the tide of unemployment.

Unemployment is a significant factor for many people filing bankruptcy. Those hardest hit by unemployment may soon find themselves with few other options to fight off mounting debts.

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Posted in Bankruptcy and the Economy | 3 Comments »

Friday, October 9th, 2009

Tax Credit for Hiring Proposed: How Would It Work?

A recent article in The New York Times suggests that various members of Congress and the Obama administration have begun considering a program that would provide tax credits to employers who take on new employees.

A version of the program was apparently most recently implemented in 1977, when unemployment was similarly elevated from an economic recession. The current plan is still in its proposal stages, but here are the basics of how it would work.

  • Employers would take on new staff members, or extend the hours of current employees. Jobs are often the last part of the economy to pick up after a recession, so the tax credit would initially stimulate hiring.
  • Employers receive a tax credit for the new hires. While the credit could take a variety of forms, it would essentially mean that employers were relieved in some way of their payroll taxes. Thus, hiring a new person would be less expensive than it would be otherwise.
  • Businesses bring on workers sooner rather than later. The intended effect of such a measure, naturally, is that employers begin hiring sooner than they would have otherwise, since they would in practice get new workers for a discount.

Some economists apparently think that, timed right, a tax break of this kind could stimulate hiring like few other measures.

Bankruptcy and Potential Drawbacks

Naturally, the new-hire tax credit is by no means a guaranteed solution to the problem of unemployment. Among its flaws, some critics point to the following:

  • Potential employer exploitation: Some employers could take advantage of the “discount employees” they’d get by hiring while the tax credit was effective and firing the employees as soon as the savings ended.
  • Potential aid for dying companies: Another drawback could be that the credit would end up supporting companies that are in the process of going out of business, are not sustainable, or are at risk of filing bankruptcy; and that the jobs in those businesses would end before very long.

Again, this potential economic stimulant is still in its very early stages, so check this blog for updates as more information becomes available.

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Posted in Bankruptcy and the Economy | No Comments »

Wednesday, September 2nd, 2009

Finally, Good Economic News… 20,917 People Saved from Unemployment Line

Drum roll, please .... Planned announced layoffs fell 21% in August!

While U.S. employers announced 97,373 job cuts in July, that number dropped to 76,456 in August.

That's 20,917 people who were saved from losing their jobs!

While That's Awesome News...

...we also need to keep in mind that the total amount of job cuts climbed to 1.07 million from January through August, which is a 60% increase from the same time last year.

<But we choose to take this nugget of positive news as a sign of things hopefully moving in the right direction.>

Lost Your Job?

Times are tough for people who are working -- it's even harder for those who have lost their jobs.

If you've been laid off and can't keep up with the bills, filing bankruptcy may be an option for you.

Chapter 7 bankruptcy was designed to eliminated unsecured debt, such as credit cards and medical and utility bills.

Chapter 13 bankruptcy was designed to stop foreclosure and give people an interest-free repayment plan so they can resolve their debt.

If any of those options sound appealing to you, it could help to talk with one of our sponsoring bankruptcy lawyers (for free and with no obligation!).

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Posted in Bankruptcy and the Economy | 7 Comments »

Friday, August 7th, 2009

Why 38,000 People Finding Jobs in a Week Matters to Us (Think 237,500 Happy Meals…)

The Department of Labor reported that the weekly unemployment insurance claims fell from 588,000 to 550,000 in one week.

That means 38,000 people either did not claim unemployment or they found a job.

What Jobs Mean to Our Economy

If 38,000 people actually found work last week, that would be equal to the entire town of Coppell, Texas now gainfully employed or the entire student population of New York University.

If these same 38,000 people made the national average wage index, then that would be 38,000 people now earning $40,405.48 per year.

If these 38,000 newly employed people then spent $5 a day for lunch at McDonald’s for the entire work week then that is $950,000 spent to bolster the economy

(By the way, $950,000 is a little less than what two Wall Street Executives are now allowed to earn under the current administration.)

Or, $950,000 can purchase 237,500 Happy Meals at McDonald’s, in turn supporting the 18 vendors and 30 employees (on average) which are needed to support one McDonald’s restaurant.

If there are approximately 8,600 McDonald’s restaurants in the country then that is 258,000 people and 154,800 additional businesses positively affected by the 38,000 people who found work last week.

These hypothetical figures show that every job counts toward stimulating the economy.

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Posted in Uncategorized | 2 Comments »

Wednesday, January 7th, 2009

Dealing with Diminished Job Security: Prepare for the Worse-Case Scenerio

Americans are feeling the impact of the economic recession.

Workers face mass layoffs and unemployment rates continue to rise, along with people filing bankruptcy.

The current labor market is scary—many people are having trouble finding new jobs.

The Employment Law Alliance recently surveyed 1,159 workers and found that about a third of them are concerned about losing their jobs.

More than half of the workers surveyed said that if they were laid off, they think they would have a difficult time finding new employment.

Preparing for the Worst

The Wall Street Journal recently spoke with Dee Soder, managing partner of CEO Perspective Group, an executive-advisory firm, about mass layoffs.

Soder recommends that workers who are worried about layoffs spend a minimum of two hours a day preparing their career strategies. This process starts with an updated resume that focuses on the worker's most marketable skills.

Workers should also save copies of recent performance reviews. A list of job achievements, samples of their work and any other letters or documents that reflect a job well done should also be retained.

Some people who fear layoffs tend to try to stay under the radar and essentially become invisible in the workplace. However, experts warn that this may be a bad idea.

When rumors of job cuts are swirling, it may be the perfect time to let your talents shine. The difference between who stays and who is cut may lie in the value of the worker. By showing that you are a competent and self-starting employee, you may be able to weather the storm.

Getting Legal Advice

Laurel Bellows, an employment attorney, tells The Wall Street Journal that getting advice from a lawyer before being laid off may be a good idea.

Bellows notes that getting legal advice may be especially important to people who feel that they may have complaints covered under bias, whistle-blower or other employment laws.

According to Bellows, you should let your employer know immediately if you have concerns that employment laws are being violated. If an investigation is launched, your job could be preserved while the investigation is ongoing.

If your job cannot be saved, you may still be able to sit down at the bargaining table and negotiate favorable separation benefits. You might ask for a bonus, extended health coverage and outplacement services.

Experts recommend that you prepare your “wish list” in advance—just in case.

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Posted in Bankruptcy and the Economy | No Comments »

Tuesday, November 18th, 2008

If Cars Industry Goes, So Will Millions of Jobs

Moody’s Economy.com chief economist Mark Zandi estimates that 2.6 million people will lose their jobs if GM, Chrysler and Ford collapse and that the economy is too weak to handle such a big blow.

That number includes 250,000 people who are directly tied to the big three automakers and another 2.3 million people whose jobs are indirectly dependent on the big three.

Those indirectly affected workers come from the advertising, steel, glass, fabric, tire and electronic industries, including all those workers who have businesses near the auto plants.

Obviously the big three automakers are having a tough time. Without federal aid or a huge sales turnaround--(which is highly unlikely)--one or more of the big players will have to file bankruptcy.

Stay tuned to Total Bankruptcy blog for the news as it develops.

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Posted in Bankruptcy and the Economy | No Comments »