Saturday, October 03, 2009

Economics Perspective of the Unemployed

I have been laid off three times from jobs. Oddly or not, all three times came when a Democrat was President. The most recent condition came a couple weeks ago, when my company decided to ‘reorganize’, a useful word that can mean anything from making judicious use of your resources to maximize effectiveness, to panic-induced blunders that will eventually hurt everyone involved in the matter. During the settling of things after the decision, I put my resume on the internet and was soon invited to interview as a salesman for Saturn. Since I am not a sales person by nature, along with – hmm – things I have read in the news, I have decided not to pursue that wonderful opportunity.

I also have been making adjustments in how I live. Since my healthcare coverage was going to end soon, I made sure that I, my wife, and my daughter all had trips to the doctor, and my daughter’s dentist visit was also moved up, just to be sure. Which brings me to that unending fountain of joy, COBRA coverage. When I say ‘Cobra’, I don’t mean that venomous snake or the nemesis of the G.I. Joe team – or at least I don’t think there’s a connection – I mean the “Consolidated Omnibus Budget Reconciliation Act”, also known as the ”you want how much for health insurance?” plan.

Near as I can make out, the way COBRA works is that the government has set up health insurance coverage for people who lose their jobs. The formula for what you pay is really very simple; simply calculate how much you could realistically afford, double that then add another 20 percent, and that’s your COBRA premium. I think it’s mean to remind us how nice our employers were to offer us healthcare coverage, and to punish us for losing our jobs. Here’s a place where I actually give out some props to the Obama Administration – that Stimulus bill that passed earlier this year includes a government subsidy for some of the COBRA cost. The bad news is that the process is a bit long and complex, and my insurance contact said they’d “get back to me” when they knew what COBRA would cost with the reduction from the subsidy. I sure hope that subsidy money didn’t end up being used for Cash For Clunkers, instead.

Obviously, losing your job makes you very conscious of how much everything costs. I haven’t exactly been living hand-to-mouth, but the sudden end to an income, even with a severance package, means that everything is considered in terms of budget life, how long you can live on a certain asset if you need to do so. The first order of economics is really determining how much you have to have, and where you will get what you need. The short-term is no problem, but until interviews and job offers come in, you really become much more aware of the financial horizon.

Ironically, you also become cautious about what sort of job you will consider. I don’t mean that you become overly picky about jobs you apply for (I’ve sent out about three dozen applications so far), but you consider all the aspects of a job, including elements that did not seem important before, such as how far you would have drive to get to work, how much travel is involved, whether you would be willing to relocate and if so to where, what base bay is acceptable, what working conditions are must-have, what nature of work you would consider, and the like. I found some surprises already, like two jobs for different companies which are very similar in their requirements and duties, yet one pays barely half of what the other pays. Or the company which is extremely particular about whom they will even consider, which explains why the job has been open since May. For the same general responsibilities, some companies are very demanding about who they want, which makes it hard to get in but at least you are clear about what they want, while other companies are very general, even vague, which may seem attractive until you ask whether they know what they are looking for in a candidate. I’ve already had one job in my past where the business owner did not know what the job needed. You have to consider everything in the job posting, to make sure you understand what you are walking into in a job.

The economy is a big topic of discussion among the unemployed. The Workforce office is jam-packed, so is my out-sourcing company, and so are the employment recruiters I have talked to. Pretty much no one believes that the economy is in good shape or that finding work is easy. The rotten economy is also punishing the poor more than anyone else. People on the low end of pay and position get let go more often than anyone else, and they get less in severance as well. All the fine speeches spinning how making businesses pay more in taxes will be good for the economy somehow gets no traction when all you see is belt-tightening. What’s interesting, to me at least, is that most folks just want to work a decent job. No one is looking for a free ride that I have met, and they are all getting pretty disgusted with a government that spends so much time on spin, that it never considers the effect its new laws have on regular people.

Sooner or later, it will dawn even on Congress that unemployed people vote too, and they are in no mood to continue on the present course.