Wake Up Call!

In the years following the Great Recession the level unemployment and underemployment are often debated.  Whether the debate is on economic recovery or lack therefore, depending on the channel you are watching of course, the number of Americans not at work always triggers passionate responses.  Until yesterday I really thought I had heard everything there was to hear.  Thought those that could shock me had done so already.

Brendan Greeley, one of the hosts of Bloomberg Surveillance, posed a question for one of the day's guest hosts.  "What do you say to that person who is struggling to cobble together 40 hours in the service industry?"  When Joel Kurtzman responded I was ill-prepared for his response.    As I questioned if I had actually heard correctly, I quickly grabbed my remote control.  Thanks to the ability to rewind - I did confirm I heard correctly.  "People need to wake up".

It is difficult to place that statement, do I agree or do I disagree.  Initially it comes off as arrogant and unsympathetic to the plight of the poor. Yes he spoke of "individual responsibility" being important when looking for a better paying job or yearning for a better life.  But we are not all made equally, quality of education and the basic skills nurtured growing up are definitely not uniform across the board.  Most of the people in those "service jobs" are really doing the very best they can under the circumstances.  To ask them to "wake up" is nothing short of an insult.  So Mr. Kurtzman with all due respect just because you were born with a silver spoon in your mouth, it clearly does not follow that everyone had the same foundation for building a life.

That said I have also had the misfortune of meeting people who are for all intents and purposes "lazy".  There are those of us who do the bare minimum, no drive at all.  No yearn to soar above where they had after high school or college.  Yes it is this group that Joel Kurtzman was referring to.  Sometimes the path we choose is not working for our greater goal.  It comes short of our basic needs.  But then is it correct to be content when you are in a position of lack.  Do we stay there  and wait for a miracle?  Or do we "wake up" and reinvent ourselves.  It is hard to reconcile people saying they need jobs, and seeking that the government do more to create jobs.  Statistics show that on March 31, 2015 job openings were at a staggering estimated 5.0 millions.  Latest report has unemployment at 5.4% which translates to approximately 8 million people - who are said to the actively looking for a job.

There is definitely a mismatch of the skills that employers are looking for and the skill level of the 11.6% of the population that is unemployed, underemployed or purely discouraged.  "Wake Call" does not seem as arrogant any more. Instead of being discouraged why not take the necessary steps to ensure you are adequately qualified for the job or pay you seek.  People really do need to "wake up" to the fact that every other aspect of the economy "supply and demand" mean that there is a demand that needs to be met and the suppliers meet said demand.  Since there is an unwillingness to improve one's skills to match the job opening, is it correct to term them "discouraged".  Clearly they do not want to wake up to the demand.

A stitch in time...

Growing up I often heard the proverb "a stitch in time saves nine" and looking back I wonder just how many proverbs and famous quotes are out there to guide us that we so often overlook and do not take the time to understand the true value of the message therein.  Take for an example one of Abraham Lincoln's quotes "“You cannot escape the responsibility of tomorrow by evading it today.”  That speaks to the heart of financial/retirement planning, our need to prepare for tomorrow today!

Too often people use the excuse of lack of time to sit down and go over their finances.  For some it is "not having enough money to live on today let alone save for tomorrow".  All in all many fail to see how plugging that one leak in our budget today can serve to increase our savings for tomorrow when we do not have the flexibility of youth. A stitch in time - every dollar saved today, compounded accumulates to serve a future need.  

It is our view of reality that alters what we view as important.  For most economist it is our inability to relate to our future self that prevents us from being more committed to saving for retirement.  I contend that our level of income guides us on what we view is being important.  For the very poor it is the next meal that they invest all their efforts into acquiring.  For the homeless it is where they will sleep tonight.  For the working poor it is putting food on table and paying some of their bills, for not every need can be met.  For the middle class it is buying a home, planning for retirement or putting your children through college.  For the wealthy it generational estate planning, ensuring your children and grandchildren will be comfortable while still being able make a difference to the world around you through philanthropy.  All in all our station in life predetermines what we need to plan for.

Missing from the groups I mentioned above are the groups who do not know where they fall.  For they either view themselves poorer than they actually are and still others perceive themselves as being more affluent than a true reality check would reveal.  The need for a thorough financial assessment for these two groups is acute.  A change in behavior today can still have positive results regardless of your age.  It goes without saying, the younger one is when responsible behavioral changes are adopted, the better the chances that your tomorrow will be more financially secure.