Career 
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comments

Qualities of Recession Proof Jobs

Do you know what the top ten recession proof jobs are? According to Laurence Shatkin, author of150 Best Recession-Proof Jobs, they are:

  1. Computer systems analysts
  2. Network systems and data communications analysts
  3. Network and computer systems administrators
  4. Registered nurses
  5. Teachers, postsecondary
  6. Physical therapists
  7. Physicians and surgeons
  8. Dental hygienists
  9. Pharmacists
  10. Medical and health services managers

Unfortunately, the list itself is useless. It’s useless because we’re already in a recession. The people who are looking for jobs can’t switch careers on a whim. The people who are working aren’t going to quit their jobs for a “recession proof” job. In that respect, they’re useless because you can’t act on it. Fortunately, you can learn something from it.

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 Personal Finance 
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Ten Recession-Busting Money Tips for Young Professionals

Gray's Papaya Recession SpecialOver three million, six hundred thousand jobs have been lost since the recession started over a year ago. Three million, six hundred thousand. If you’re one of the three million, six hundred thousand, my heart goes out to you and I hope you’ll follow my friend Sarah as she chronicles her battle against joblessness in Diary of a Firee. If you still have your job and you haven’t started preparing for the possibility that you will lose it, start preparing. You have all the tools you need right now to fortify your finances so that, should you lose your job, you will be prepared for it.

These tips were tailored for young professionals but they can apply to anyone. They are focused less on family-related money saving ideas and more on the things individuals and couples tend to do, especially if they’re in the younger working demographic.

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 Frugal Living 
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We’re In A Recession

Gray's Papaya: Recession Special!The National Bureau of Economic Research has determined that the United States economy has been in a recession since December of 2007… this really comes as no surprise to most people. In fact, last October, I wrote a post outlining what I think one should do during a recession and that one predates the technical start of the recession by a good two months (here’s what you all said when I asked whether we were in a recession last August). If you boosted your emergency fund starting then, you would’ve had a two-month head start on the recession! The lesson from this? Believe me! (Ok ok, I’m only kidding, I can’t see the future and I’m probably wrong more often than I’m right on about everything)

Since then, I’ve been focusing a lot more of my articles on frugality (such as 100 money saving tips and 11 tips to save on shipping) because I think frugality is the way we can get ourselves, individually, through this economic slump. More broadly, we need people and businesses to spend money so the economy recovers but individually, and this is selfish advice, you need to have a bunker mentality and save your way through this.

Stick that money in your mattress, a high rate CD, or a plain old online savings bank… until the clouds roll past anyway.

(Photo: bobjagendorf)


 Career 
8
comments

Is Your Job At Risk?

Grays Papaya Recession SpecialBefore the last few weeks, I saw most of the talk about a recession as just talk. Experts were trying to get ahead of the curve on calling an economic slowdown through the US economy and we as consumers were eating it up. With short term lending on the fritz (ignore the movement of the stock market, there’s too much noise in that), companies are truly going to have an economic reason to start cutting back and labor is far easier to reduce than any other asset.

CNN Money just did an article on this very idea, of who is most at risk in a downturn, and they highlighted people who fail to perform, who are relatively overpaid compared to their peers, and those that do not adequately fill a business need.

Based on my limited experience in the workforce, I think the folks on this list of best paying careers are pretty safe but here are the groups that I think are at risk:

Cost Centers

A cost center is a department in an organization that doesn’t product a direct profit. A research and development department is a cost center, the marketing department is a cost center, and the HR department is a cost center. While cost centers are important, cuts often start there because they don’t directly affect the bottom line. If you’re a widget maker and times are getting tough, you might slash your HR department in half because you don’t intend to hire anyone in the next year if things stay rough. You’ll let go of an HR person before you’ll let go of someone working the manufacturing floor because the technician directly contributes to profit when he or she makes a widget.

Low Oversight or Visibility

If you’re working on a project that has very little visibility or has limited oversight, I’d try to find out how important it is to the firm. If management needs to pare away some overhead, are they going to cancel the project you’re working on? If it’s an important project, why is there little oversight over its progress? If it truly is an important project (it’s not uncommon for management to overlook important projects simply due to volume) and you want to help ensure it’ll stick around, try to get more visibility.

Contractors/Temps

If you’re a contractor or temporary employee, I’d be the most wary because “not renewing a contract” is the easiest way to let go of someone without dealing with the legal headaches. It could have nothing to do with your job performance, need, or anything else – it’s simply easier to let go of someone who isn’t a full time employee of a company.

Solution? I don’t know and I don’t know if there is one, the best advice I can give is that you should always, in both good times and bad, have a contingency plan. If you’re a contractor/temp now, you should be pushing to go full-time or have another job lined up. If you’re in a low visibility project, get yourself on a high visibility project. If you’re in a cost center, maybe find a new job at a firm where your specialty isn’t a cost center (accountants to an accounting firm, HR specialists to a head hunting firm). And as always, boost up that emergency fund.

(Photo: bobjagendorf)


 Your Take 
22
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Your Take: Are We In A Recession?

Gray's Papaya: Recession Special!It used to be that the measure of a recession was two consecutive quarters of negative GDP, something that we haven’t done yet. However, with all the bad financial news (enormous national deficit next year, 1 in 171 homes being foreclosed, record unemployment, stock market woes, financial companies taking massive writedowns, domestic car manufacturers tanking, etc), it’s sure feels like a recession despite the official measures telling us otherwise.

(As an aside, the two consecutive quarters rule is really a trailing indicator. You’re in a recession when the GDP is contracting but you don’t label it a recession until after two quarters, so you live it before you label it. Makes the term kind of useless, doesn’t it?)

I’m curious to know whether you think we’re in a recession. I posed the question to Chris Farrell, Marketplace Money’s personal finance guru, and he said:

I am in the camp that believes we are in a recession. Yes, government statisticians recently reported that the economy is expanding at a 1.9% average annual rate. And it takes the National Bureau of Economic Research–the official arbiter of when and if the U.S. economy is in recession–between 6 month to 18 months after a downturn begins to label it as a recession.

Still, the job market is weak, and getting worse. Layoffs are hitting more industries. Home prices keep spiraling lower, and we haven’t seen bottom yet. The credit turmoil in the financial system is spreading, most recently reaching the credit card market. Consumers are strapped for cash, with higher energy and food prices sapping budgets. Exports are one of the few bright spots in the economy.

What’s more, official history is being revised downward. It’s intriguing to note that when the government revises previously published statistics the figures are usually worse than initially reported. For example, the fourth quarter of last year was recently revised down to negative growth: -0.2% from the previous 0.6%. Mike Mandel, chief economist at Business Week, has been making a strong case over at his blog that the consumer spending figures are too high.

It feels like a recession. It looks like a recession. And eventually I think it will be labeled a recession.

(Photo: bobjagendorf)


 Personal Finance 
24
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What To Do During A Recession

So there’s a ton of talk recently that we’re moving towards a Recession. That’s right… a Recession! Isn’t that horrible? Well, sort of, but what exactly is a recession? A recession, by definition, is when the GDP declines for two or more consecutive quarters; but how does that really affect you? In reality, it’s a period of economic slowdown that is marked with companies earning less, paying less, and generally things in life are a little less prosperous.

So, what should you do to prepare yourself if a recession, specifically a prolonged recession, hits? It’s actually quite simple, the biggest fear you have and the biggest thing you should prepare for is the possibility that you could lose your job. In a recession, companies often scale back operations as sales lag and when that happens employees are often one of the things to hit the chopping block. To prepare for this, keep your ear to the ground and make sure that in the event that you are let go, the first you hear of it shouldn’t be the moment after your boss calls you to his office to deliver the bad news. The second part of preparation is to pull back your spending and boost your emergency fund. What? Don’t have one? Start one immediately! That’s what you will be to lean on as your income because you won’t be earning money if you’re unemployed.

Now, preparing for the worst is always a good idea but the worst may never happen. In recent memory, recessions haven’t been all that bad for most Americans so the doomsday scenario isn’t all that likely. What’s more likely is that raises won’t be as big and promotions won’t be as plentiful, which is fine because it’s better than being fired. So, if the only real tip is to pad an emergency fund, what’s the big deal? The big deal is that you need to begin planning for it now. If you wait until it hits the cover of Time or the New York Times, it is already too late.

How can you pad the emergency fund now? If you’re contributing more than your employer match in your 401k, consider pulling back so you can put that towards savings. If you’re making large payments on your car note, consider downsizing your car and getting into something you can handle better. Some things are easier than others (adjusting 401k contributions is easier than changing cars) but ultimately you want to reduce your spending to pad that fund. Whether or not a recession does hit, having a nice fat emergency fund is certainly something valuable in any economic situation (one can lose their job during a period of economic prosperity!).


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