So with a Failing economy and people being laid off everywhere, what do these people do?

Just like a Ponzi scheme, the economy requires constant growth. Since most people are financing their home, these houses are not paid off or owned by anyone but the banks. If people start losing jobs, the economy doesn’t grow, it risks total collapse because our economy is based on things having their current value. Once shit hits the fan, values change.

I see our economy as a big ponzi scheme which we are forced to play. Once it collapses, it will give the people that actually do own necessities a crap load of power and control.

They collect unemployment. And then they probably rely on savings and credit cards. When that runs out, assuming they’ve already tried to live more cheaply, they rely on friends or relatives. In michigan, there’s a 10-cent deposit on cans that people can try to collect and return to the store. There isn’t much. Food pantries, soup kitchens – but these are being depleted as the economy worsens, too.

Of course, if you listen to some people, having a social safety net causes these people to be lazy, and they could do much better if they’d just find a job. ;)

It does put people on the street, and it does increase debt. Nobody likes to think about it, but recessions can even cause people to die.

They ask for charity help, if that don’t help they unfortunitely have to go do illegal things

A situation like the one you describe forced people to change their expectations. They may have to find cheaper living space. Get rid of the big cell phone plan, and find a cheaper one. Get rid of cable TV. Stop going out to dinner. Stop going on vacation. Stop buying stuff.

We see this happening now. Of course, the less people spend, the less stored need to hire folks to serve them, and the cycle starts going round and round, making things worse.

On the job side of things, people try to find a job that is the equivalent or better than what they had. When the have no success, they either stay unemployed, or find a job with less compensation, or, if it is really bad, get anything they can, like fast food service jobs at minimum wage. They have to bring in some income.

If people are unwilling to adapt, or simply can’t adapt, then yes, they can end up on the street. Or maybe at a friend or family members house. People do what they have to. Sometimes it’s at a homeless shelter. Also, as seVen points out, some of them turn to illegal means of getting money. This is why crime and homelessness increase in downturns.

I rather join the military than be thrown on streets, even if war was fought for some fishy corporate agenda.

…then again maybe NOT

it’s just weird, you just kinda don’t even really think things like that could or would happen. It almost seems like something that is very avoidable, but when you think about it, it could very easily happen to anyone. It’s scary.

I think majority of people who lived through harsh times like my parents who lived through Soviet communism in occupied Poland would have less problem due to the fact of experience, they allready talk about raising a chicken farm in our back yard just in case hehe.

haha….well if they do…ill take a wing and a breast rotisserie style please :)

I just moved from a wealthy neighborhood in Eugene to a urban area of Portland. On Monday I went to the store to buy beer at around 10 AM. On my way home I saw a older man pushing a cart full of cans and told him that if he wanted to walk back to my house he could have my empties. He did, and keep in mind that this was only about 12 cans, so 60 cents.

I ended up chatting on my porch and sharing some pizza with him. A few months ago he worked in a auto parts warehouse (I used to work at one too) and got laid off. He looked for other work but didn’t have any luck. It only took a few months for him to lose his apartment. Now he sleeps outside and pushes a cart around all day collecting cans so he can eat.

What the fuck does he do? He doesn’t have a phone or address or clean clothes. McDonalds is going to hire the cheerleader in high school before him.

And I have tried to get fast food jobs before. And I am a clean but socially awkward person. I never actually got one. Every person that wants a job can’t walk into “The Arches” and walk out with a name tag.

And the “unemployed are lazy” dittoheads should share how they became so successful. Did your parents pay for college?

Well, I am half-way in this situation. Two years ago, my wife was laid off and I resigned and took a lesser paying job to avoid being laid off. My wife is finding it impossible to find a job.

What did we do?:
YEAR ONE
• Ate through our savings
• Reduced our expenses greatly (paid off some debt, stopped eating out, lowered cable, internet, and cell phone bills)
YEAR TWO
• Ate through one of our 401Ks
• I work three jobs at about 78 hours a week
UPCOMING IDEAS
• Eliminate cable, internet and cell phone completely
• Sell house and move in with mother-in-law

We’ve consulted with our accountant and even consumer credit counseling. They both say we’re doing everything we can, we just need more income (duh!).

We make half of what we were making two years ago and I went from 37 hours a week to 78.

wow cprevite, i feel terrible about your situation…if i wint he lottery ill look you up! I hope things get better for you!

@johnny0313x: I appreciate that, but we are, unfortunately, not the only ones. I have about half-a-dozen friends in the same (or very similar) boat – and there a thousands of other across the nation.

We are at least fairly young (37), I have a friend in dire straights also who’s 62. They don’t even call him for interviews.

And, I should add, we’re an educated bunch with very diverse resumés (my wife has a JD).

I just think most companies are being extremely cautious in hiring right now. Waiting to see what will happen this year with the new President perhaps.

@cprevite well I am sorry, thats really terrible, well lets hope for the best i guess, I wonder what the unemployment rate is right now compared to 2007,2006,2005,2004,2003…... I think that would be interesting info.

cprevite—my family started this downward slide in the beginning of 2007. We went from 300k family income to about 25k. What a shocker. We started poor but over the last 13 yrs have done great, until 2007. Arizona really sucks right now, and it is getting worst. I anticipate violence based on how my neighborhood is becoming a vast unoccupied area, vancant and foreclosed homes, for sale and for rent signs on every other house. Our neighbor paid 350k for a house 2 yrs ago, now it is worth 175k.

I suggest folks store some dried food, can goods, a water purifier, first aide, at least 6 month supple, and a game plan for when the financial system freezes up.

About a dozen of my work mates and husband’s work mates have killed them selves, even some of our past clients. The other’s are in bankruptcy or some stage of foreclores. The contractors that work for and around Intel are giving their employees 2 weeks to 4 weeks un paid time off, and hudge layoffs are coming in Electronic/Computer chip industry as well as retail and service industry.

We will see Hoover- Ville's--I call them Bush ville's, I mean there are homeless people sleeping in the greenbelt next to my house and sleeping in the park and public bathrooms and under the interstate bridges--I have never seen this here in 15 years. http://en.wikipedia.org/wiki/Hooverville

Anyone have any solutions? Employers are hiring, but they don’t actually write paychecks any more it seems. MY husband works, but we just don’t get paid much more than gass to get there.

Bank of America is cutting credit lines on millons of folks this month which ends the balance transfer game for most of us, I think.

Anyone have room for a family of 4 next month?

Aww Mizuki, that sucks. See, this is what I mean – it is so many people and will soon be many more.

The other thing we are not discussing here is the emotional toll this takes. My wife is very depressed and at her wits end. I wouldn’t be surprised if that desperation shows through at the interviews.

I’m sure you and yours are palpably stressed as well.

I’m so sorry for your family. I’ll tell you, I don’t pray – buy I may just start.

You know cprev—we are kind of going with the flow at this point. We drink more than we used to (at home of course) to help sleep, but I mean, we are working our asses off, and have cut all luxuries, and make cheap healthy food at home, but we refuse to be defeated by economic forces we cannot control.

My husband recently started selling legal services that are distress orientated, unfortunatly, he is starting to rock, but it is sad to make your living off the distress of others, yet they do provide a good service.

Just wait, the tide of unemployeed is just beginning.

@mizuki – please tell me you are being a little dramatic…your kind of scaring me…

both my husband and I were in the real estate lending business, so we may be canaries in the proverbial coal mine.

I know that some industries have not yet been hit, or maybe some industries are immuned to economic down turns.

Maybe some areas of the country are doing better than the South West.

That said, I was not exaggerating, or being dramatic—just telling it like it is.

MY best friend with a M B A and 20 yrs of experience just accepted a job at Countrywide, making $1500 per month—for a 45 your work week!

Dam that ownership society works great, no?

It’s a shame more people didn’t understand the impact Bush’s policies would have on the economy. Maybe he wouldn’t have been elected to a second term. Maybe the Supreme Court wouldn’t have given him a first term.

At the risk of sounding callous, I think there is a powerful lesson to be (re)learned during this time of austerity. That is, to save, save, save when times are good (like during the housing bubble), because you’ll never know if (and when) the good times will end. It is quite clear that we (in the US) have gone from a savings society to a spend-thrift society, and this recession will hopefully realign peoples’ economic behaviors (eventually).

As far as the state of our current situation, I hope that the Obama administration pushes through a broad stimulus package to avert a major disaster in the United States.

Every article or advice piece I see about how to survive these troubled times advises the same sorts of things. Stop drinking Starbucks coffee and make it at home. Get rid of all the cable TV movie channels. Stop eating dinner out all the time. Shop at discount clothing stores instead of the mall. Rent movies instead of going to the theatre. Don’t go to the freakin’ spa so often, and paint your nails yourself.

Perhaps this is rude, but if people need pointers like these, maybe that is why their times are more troubled. I have had one coffee at Starbucks in the last six years. I haven’t had cable TV since 2004. Neither of us have cell phones (and I have never had one). We eat out once every week or two, and then, it’s usually to a place with a $6 lunch special. I buy clothes at the resale shop. I have seen one movie in a theatre since 2004. I don’t even buy new books anymore. There are lots and lots of people like me, but even these people are feeling financial strain and sometimes losing jobs. Yes, we have Internet, but that’s the one luxury thing we still have left because it doesn’t cost all that much in the long run, and it’s essentally our entire entertainment budget. But even with this lack of expenditure on everything that the advice columns tell people do to without, we’re still stretching the paychecks to the limit.

That’s why we need to get the stimulus package passed sooner than later. Just look at the great depression and see what happens when unemployment skyrockets. Things are only getting worse in the leadership vacuum where Obama has no authority yet and Bush sits like a lump doing nothing.

Its amazing how fast the economy can crumble and how long it takes to rebuild. it seem slike every week that passes, its like you can literally see things falling apart, yet months can pass and see very little improvement. To be honest i expect more, not just of the world..but of humans. I think we are closer to all races being near a common ground then we have ever been before, now it’s time to work on everyone as a whole. I know pretty corny stuff but really i think we can only benefit if we all work together.

13 days

13 days to restore hope

13 months to see any palpable change.

Hopefully not 13 years to fix this bloody mess.

i dont get whats with the 13? the creepy part is the number 313 which is my birthday has been popping up EVERYWHERE i mean to a point that its really making me think something is going to happen that day. I have seen that number atleast 20–30 times in the past two weeks!

If you are on the east coast you can now say 12 days.

what happens in 12 days lol? barrack?

Yep! Hope arrives

I was laid off twice in my life due to company closure. The 1st time in mid December in 1974 I was a HS grad getting paid just over min wage living ih a HUD apt. There was less than $100 in the bank but that carried me through until the unemployment kicked in. I got a child support check and unemployment check the 2nd of January which covered the rent and bills and left me with $25 for food for the rest of the month. My daughter was 5 and with very careful spending and a reduced school lunch I managed to feed her but I only ate rice for almost the entire month. We lived in a small suburb and my former employer was one of the larger employers before they closed down so there were no jobs. One of my brothers bought me a public transportation ticket so I could get into the city and enough money for food stamps so I knew I could make it through February. By traveling 30 miles several times a week for interviews I was able to get a job before Feb was over. The money was a little better but my expenses were higher so I was on the edge again.

Nine years later I had earned a degree in business and was the controller of a small manufacturing company for almost 4 years. Things had been incredibly tight while I was going to school so I had become a champion skinflint. I could see what was coming almost a year in advance so I paid off all my debt and managed to save a few thousand. With my skills I was able to find work through a professional temp agency and in the 3 months it took to find another permanent position I was able to earn about 2/3 my former salary. I have never stopped taking classes since 1978.

The point is to be as prepared as you can possibly be with your own safety net of savings and as many skills as possible. You may not have a lot of new cars or expensive vacations to look back on but you also don’t have a job as a Walmart greeter, a crappy little room and cat food for dinner to look forward to.

From an ecological footprint point of view, we’re going to all need to learn to live like they do in Gambia or Nepal . Granted, we can do a lot with energy efficiency, clean tech wonders and good planning (if there’s enough will and effective distribution) but the entire world needs to find a better way to live since what we understand as civilization is unsustainable (we have been essentially eating the future.) I hope I’m wrong, but this is likely just the beginning of a whole series of economic, climactic and social shifts that will be very hard to adjust to. I expect a counter cycle of volunteerism and increases in alternative economies that value non-monetary exchanges and a greater emphasis on service, love and compassion. …AND Lurve!

I heard that during the depression, the maximum unemployment rate was 10% (which means 90% of the workforce was employed).

I heard yesterday that the US unemployment rate is already at 9%.

Food for thought.

daloon: You have it wrong.

First of all the unemployment rate is not simply a measure of who doesn’t have a job. Certain groups of people are excluded. People who are under 18 for example. In the 30’s most women would not have been counted, agricultural unemployment would not have been accurate.

At it’s height in 1933 the estimated unemploynent rate was close to 25%. Remember that meant 25% of families had nobody with a job. At one point in Cleveland the rate was 80% Double digit unemployment lasted for nine years. We have never had double digit inflation since WWII

http://www.huppi.com/kangaroo/Timeline.htm

Oops wrong key. The 9% you quoted is in fact much worse. Today’s unemployment figures do not reflect ‘discouraged’ workers whose uneployment insurance has run out and are no longer in touch with the EDD. It doesn’t count full-time students and it doesn’t reflect part time workers who want to work full time. And as the economy gets worse or stagnates there will be more unemployed workers falling off the radar.

You might consider this. The unemployment rate was 8% in 1930. With the adjustments for the data collection methods by today’s standards that might be 12%. If we don’t address the problem we may approach that figure.

@gg: thank you for clarifying my point. It doesn’t matter whether you are measuring everything, so long as you are measuring the same thing at two different points in time. I’ll take 12% and 9%. My point is that things are pretty bad—nearly at depression levels.

BTW, while all your points about how much of true unemployment the unemployment rate measures is absolutely correct, it really doesn’t help here. You’re preaching to the converted. The important thing is to use a measure that people buy into and understand as a point of comparison.

The point is if things are already as bad, or nearly as bad, employment-wise compared to the depression, then we have a lot worse to look forward to. All the stimulus measures in the world may not be able to prevent a much steeper economic decline. It’s only just started. People still have savings to live off of. When all the foreclosures are finished, and the savings run out, and unemployment insurance runs out, then we’ll start to see what it’s really going to be like.

I am hopeful that Obama has the right attitude about this, and is not afraid to run deficits or initiate make-work programs to help. It might even make the need for single-payer health insurance much more obvious to people (won’t the health care providers be crying when half their patiends can’t pay a dime). However, I fear that That Man has really fucked us over, and there is nothing that can save us this trauma.

Apparently in Spain it already nearing 20% unemployment. There is a much higher savings rate, however, and if you are laid off you get 2 years of unemployment at 70%, and of course there’s free health care for everyone. Things are definitely in crisis but there’s a safety net to soften the blow. That is why people agree to pay taxes.

Using the formula used in 1995, the unemployment rate is closer to 12.5% now.

It seemed to me that they used to report the unemployment rate and the UNDERemployment rate until Regan took office.