Will the Recession Deflate Your Income Forever?
By Kristina Cowan
As you watch America's fiscal health deteriorate, grimacing through news of layoffs and current unemployment rates, you're probably concerned about your own financial survival, and on the lookout for some smart money secrets. You're not wrong to worry. Economists say incomes won't likely rebound until 2010 or 2011. But you're not defenseless. You can take steps to protect your income and job security.
What Is the Current Unemployment Rate in the United States?
News about the workforce has been grim. The unemployment rate is 8.5 percent, according to the Bureau of Labor Statistics. Meanwhile, surveys by Bloomberg1 found that current unemployment rates will rise to 9.5 percent by the end of the year.
"Wages are not only flat right now, but actually declining. All the signs point to the labor market getting a lot worse before it gets better, which will continue to put downward pressure on wages and family incomes," says Heidi Shierholz, an economist at the Economic Policy Institute in Washington, D.C.
Ken Goldstein, an economist at The Conference Board in New York, doesn't see current unemployment rates improving before 2010. "There's no reason to think that this recession is going to end any time this spring or this summer," says Goldstein.1
Smart Money Secrets & Tips for Weathering The Storm
Despite the cloudy forecast, career experts say you can create your own silver lining, one that protects your income and your career.
Survival for the Recession Tip #1: Invest in Your Education
Pursuing a bachelor's or master's degree, or perhaps week-long classes or certifications, will boost your skills and make you a more precious commodity in the workplace, says Jennifer Loftus, national director of Astron Solutions, a compensation consulting firm in New York. According to a report by the U.S. Department of Education, in 2006 young adults with a bachelor's degree earned 28 percent more than those with an associate's degree, 50 percent more than those who finished high school, and 98 percent more than those who didn't earn a high-school diploma.
Survival for the Recession Tip #2: Shift to an Industry That Needs Workers
Health care is one such industry, notes Loftus. Nursing, one of the fastest-growing careers, is expected to see a shortage of more than 1 million workers by 2020, according to the Health Resources and Services Administration. The median salary for a registered nurse with one to four years of experience is $48,895, PayScale data shows.
for the Recession Tip #3: Document Your Accomplishments
Whenever you finish an assignment, note how your work helped the company make money, save money, save time, grow the business, or retain customers, and illustrate your accomplishments with dollars, percentages, and other metrics, says Barbara Safani, president of New York-based Career Solvers. "By showing and quantifying your specific value add, you build a better business case to support the requested salary increase," Safani says.
Survival for the Recession Tip #4: Tackle Tasks No One Else Wants
This isn't about grunt work, Safani says; it could mean mastering a new technology others aren't comfortable with, or accepting an assignment outside the traditional scope of your job. "Employees who demonstrate this level of flexibility tend to get more flexibility from their bosses on other issues, including compensation," she explains.
Survival for the Recession Tip #5: Accept High-Profile Assignments Close to Review Time
This sort of project will likely be a focal point of your performance review, and because it's recent, your boss can quickly recall and document achievements relevant to the project, Safani says.