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Entries in Economy (2)

Sunday
Jan272013

Is The Middle Class Going, Going, Gone?

Is the middle class of old going, going, gone? Yes and the sooner we take our heads out of the sand of denial, the sooner we can strategize and create positive job solutions.

Here are economic facts of the last 40 years:

In previous recessions (2001, 1990-1991, 1981-1982, 1973-1975) mid pay jobs rebounded each time, but the net effect was still lost midpay jobs with each recovery.

In the recovery of 2001 there was a 5% net loss of midpay jobs, in 1990-91 a 20% netloss of midpay jobs, in 1981 32% net loss. In other words with each recession the recovery of midpay jobs has declined. The net effect is that the middle class has lost ground with each recession and recovery period. “Half of the 7.5 million jobs lost during the recession were in industries that pay middle-class wages, ranging form $38,000 to $68,000. But only 2% of the 3.5 million jobs gained since the recession ended July 2009 are in midpay industries.* Mid-wage jobs were 60% of recession losses but only 22% of recovery growth.

What about the poor? How do two working adults make enough money for rent, food and basic necessities on a $7.25 an hour minimum wage? They don’t. In California, the miniminum wage is $8.50 an hour.  If the minimum wage was pegged to inflation over the past 40 years, the federal standard would be $10.58 an hour.*  Still not much to build a better life on.

Who or what is to blame? It's more complex than this answer, but technology is the major culprit, though of course the housing market and banking excesses share the blame. Though we love our technology, it is the main problem in terms of recapturing lost mid wage jobs because robots, software and newer and better apps do jobs faster, cheaper and more productively than humans can. Companies understandably go for increased productivity and earnings and cheap, effecient labor. 

What's the solution?  First of all, letting go of the dream that things will go back to the way they were. Forget it. Let's move on. Then, we need our best, most creative economists, along with folks from the middle class and poor to brain storm short and long term solutions to job creation because, believe me, we are all in this economic soup together. If the middle class and poor continue to lose ground that affects all of our standard of living. We can create job solutions. We must start now and we can't leave that to Washington alone. (*“The Great Reset, Recession, technology kill middle-class jobs,” Modesto Bee January 27, 2013, ** Michelle Singletary, Mod Bee 1-27-2013) 

Thursday
Dec152011

Women: 5 Steps to Get Money House in Order 

If you're self-employed, an entrepreneur or career oriented you've got to get your money house in order.  I know, I know, it's nearly Christmas and you're crazy busy. But, I want to plant an important business seed for 2012 because it'll be here in ten seconds.  

In order to make the most money, have less stress, and achieve your full potential (financial is part of that) and have fun along the way, here are 5 Money things you need to do in 2012.*

1) Get Your Money House in Order:  Assess what's working well financially and what the challenges are. For example, let's start with the basics.  Are you making enough money? No? What do you think/feel are the 3 main reasons for this? Be careful about blaming the economy. I know it's a factor, but I also know many businesses that are booming - mine included.

2)  Know your Money Story: Especially if you're struggling to get to the next level financially and you keep bumping up against the same obstacle or stuck place. I can guarantee you that there's a hidden emotional piece in your history. Yesterday, while going through The Money History with a client, she realized that her "make do and settle" pattern came from resistance to becoming like her mother. A huge ah-ha.

3) Write down your goals for 2012. If you're self-employed and you have a goal of earning $25,000 or $50,000 net income a year, how many clients will it take each week and month to bring in that amount of money. The more specific you are (a spreadsheet is handy) the easier it will be to achieve. Look at your goals each day, visualize the end result as if it's already happened. Then take action each and every day.

4) Realize that you have a RELATIONSHIP with money. As Suze Orman says and I'm paraphrasing: "Women don't show the same care to their relationship with money, as with other relationships, because they have a dysfunctional relationship with money. What are your money dysfunctions: Overspending, debt, avoiding, underearning, not respecting your money so you don't take good care of it?  Identify THE major dysfunction and conquor it this year.

 5) Grow your Wealth: One of the biggest money mistakes I see women make (and I used to also) is to not grow their wealth. Women give too much time, energy and MONEY away to others - primarily children. If they don't they feel guilty. More money comes to us as we learn to respect it, take care of it, grow it. If you haven't started a retirement account or savings account (for emergencies - $1,000 minimum) make it a goal to start this year.

 *If you're in Modesto or close by check out my 2012 4 hour Business Strategy Session for Women). I do this workshop every year and at the end we do a Vision Board with your Goals and Action Steps for 2012)