Thu 07 Jan 2010 – 15.52
There is a feeling of rage mixed with exhaustion mixed with disappointment that comes from realising your own job prospects are dim. It’s almost a state of mind, where you view yourself in the third person, weighing events with both rational and emotional views, yet not being able to govern yourself with either faculty.
What can be done when you’re laid off, facing an impossible job market and ruthless competition? How can you come to grips with your own self-worth when the world around you says you are worthless? And how does one pay rent?
Recently, a friend relayed to me these feelings, in not so many words. She had been laid off from a job she didn’t exactly like, but now faces the task of finding something new. Being a middle twentysomething, it is difficult to assert expertise in a given field, but holding a degree (in her case, a Master’s too), you can’t market yourself as a penniless learner.
I, and she, have both found ourselves previously in such terrible job situations that we’d rather have no job at all. In my case, I quit this job in favour of the generally unfavourable lifestyle of a freelancer. In hers, she was laid off as a gesture of professional half-mercy, finally cutting her free from a job that was more trouble than anything else. (although the pay was good). But neither of us are eager to jump back into a job that we know isn’t brilliant. Or rather, we can’t tolerate that level of frustration again at such a critical time in our lives and careers.
Being a working twentysomething is a powerful thing. We are energetic and eager to learn, we don’t have personal baggage (mortgage, kids) so we can move from city to city, we don’t mind the late hours and enjoy making connections with co-workers, we’re plugged into the latest technology and can spew knowledge of all subjects in a manner unlike our parents. We have a lot to give. But in return we do have some requirements — simple requirements — for a fulfilling, or even tolerable, worklife.
We need to be taught. Resourcefulness can only bring us so far, especially when we are new to a field of specific role. We need to find a rhythm, even if that rhythm is a sort of managed chaos that may come from certain professions like journalism, (or blogging). We need to be led, for there is nothing worse than a spiteful boss who is constantly monitoring you, telling you what you’ve done wrong. We wouldn’t mind an industry-appropriate salary and maybe even a day off. And we need to know that there is, in fact, a tomorrow — that every step brings us forward. These requirements are somewhat philosophical, but with these in place the rest is just details.
What do we do now?
Should we just quit our jobs and hide out until the economy gets better? Should we travel or live on a farm? Should we move back with our families and write a book? Should we go back to school? (I would advise against that, though, unless you’re studying to be a nurse or engineer)
In the 4+ years since finishing grad school, I haven’t been able to shake these feelings. I haven’t managed to find the instant answer to finding workplace happiness and the general answer to career happiness. I don’t have iron-clad advice for weary friends and I don’t know how to un-fuck myself from the current situation. The feelings persist.
And yes, the title of this post is inspired by the James Taylor lyrics to “Shed a Little Light”… there is a feeling like the clenching of a fist / there is a hunger in the center of the chest. …
posted by Scott in careers, education, life, personal finance.
Job Prospects in the Recession
Mon 21 Dec 2009 – 9.33
The very excellent BBC Business Daily podcast has tackled the sensitive subject of job-hunting during the recession. While clearly it sucks, there are some subtitles in play. According to the program, workers who are hired during a recession are often hired in lesser roles, for lesser pay, and then have a harder time throughout the length of their careers. A scary sentence indeed.
Yale economist Lisa Kahn remarks on one point with which I strongly disagree: that a graduate degree strongly improves your likelihood of finding a job. While the theory has been sound for generations, the practice observed by peers and colleagues (and by myself) is that the extra degree doesn’t matter for shit. In many cases a graduate degree is viewed simply as another line on a resume — easily skipped.
I write this now from behind the desk of an office where I am consulting. In many ways, I have found a job, but as the podcast reiterates, most of the hires in the last 18 months have been temporary, conditional, freelance, or otherwise non-permanent.
This all comes through the lens of my bourgeois middle-class existence. There are folks out there who literally can’t afford to look for work. The transportation, dry cleaning, printing, etc. are too expensive. And what about those factory and farm workers who are out of work. Unless there’s another factory or farm, their prospects look bleak.
So as I sit here on Madison Ave., dressed in a crisp shirt and tie, I wonder, how has your job-hunt been going? Are you out of the woods yet? I’m getting there.
•• Check out the episode entitled “Your future job prospects? 21 Dec 09″ »
posted by Scott in careers, education, personal finance.
Graduate Student Lives in a Van
Tue 08 Dec 2009 – 15.31
Well, the headline kind of says it all. Today I uncovered the story of a Duke graduate student who, in an effort to save money and avoid debt, lived in his van while he attended classes.
If it weren’t an English major writing, I surely would not have read. Here’s a taste.
The idea of “thrift,” once an American ideal, now seems almost quaint to many college students, particularly those at elite schools. The typical student today is not so frugal. Few know where the money they’re spending is coming from and even fewer know how deep they’re in debt. They’re detached from the source of their money. That’s because there is no source. They’re getting paid by their future selves.
posted by Scott in education, health & fitness, personal finance.
Congress Offers Relief to Student Debtors
Mon 06 Jul 2009 – 20.10
If you’re like me, and the millions of others who are burdened with many thousands of dollars of student debt, then here is a bit of good news: the US government will take action to make loan repayments proportional to earned income, and will forgive loans after 25 years of faithful repayments.
The terms are highlighted in an article from The New York Times dated last week.
… the interest rate on new federal Stafford loans, the most widely used federally guaranteed student loan, will drop to 5.6 percent, from 6 percent. By 2012, the rate will fall to 3.4 percent, under a schedule mandated by Congress.
… The extended payment program, called “income-based repayment,” limits what borrowers have to pay to 15 percent of the difference between their gross income and 150 percent of federal poverty guidelines. After borrowers make payments on loans for 25 years, the balance is forgiven. (The Education Department already offered an “income-contingent” repayment plan, which was similar, but less generous.)
There’s a ton of charts and numbers to comb through, so if you’re interested, definitely check out the Times article, and poke around the links.
This scheme appears to be similar to one that is offered in Britain, where students aren’t obliged to repay loans until they are earning at least £10,000 per year. That isn’t a great sum, about $18,000, but it implies that if you’re properly unemployed, or only working part-time at the local pub, you aren’t going to be burdened with a monthly payment for that expensive education you’re not “using.” Then again, in Britain tuition fees top out around £2500 per year for UK students, so I don’t feel too sorry for them.
Is this finally a chink in the armour of the American college capitalist system? Is the government inching slowly toward the European-style socialism that our population so desperately craves (whether we know it or not)? Will this new plan help prevent education from being the next bubble to burst?
Your thoughts:
posted by Scott in education, personal finance.
Is Higher Education the Next Bubble to Burst?
Wed 01 Jul 2009 – 10.33
It’s almost a taboo to speak of colleges and universities as businesses. The decisions they makes aren’t based on profits, they’re based on academics, right? Well, sort of. Higher education is a business, where the “products” are the graduates, and the effort is to sell those graduates to the world with the goal of getting more raw materials, students. And money. And prestige. It’s tricky.
But in America, as well as other nations, higher education carries with it a massive pricetag; attending is a sure-fire way to start your young adult life in debt. While most parents and economists alike will tell us that it’s an “investment” in our future — one that will increase the earning potential over our lives as a whole — the upfront costs are painful enough to warrant some evaluation. After all, the most basic laws of capitalism show us that if the the price of goods and services gets too high, people will stop buying! This even applies to supposéd critical purchases like gasoline, clothing, food, and now education.
I read recently, for the first time, the notion of higher education as a bubble that will soon burst. An over-inflated industry taking risks on its own future, which is now less-than-certain. The main point here is about the ever-rising costs of tuition and fees, making education unaffordable for all but the super-rich. Here’s a sobering statistic:
According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent — more than four times the rate of inflation and almost twice the rate of medical care.
posted by Scott in careers, education, personal finance.
Half of Everything Goes to Rent
Tue 21 Apr 2009 – 20.08
It has long been known that twentysomethings in New York, especially those who are straight out of school and into their first job, will spent half of their wages on rent alone. That’s half to rent, and half to everything else. Turns out this practice is no longer just for the young lot. A new study reveals that a higher percentage than ever, 27%, are crossing that tragic 50% barrier.
That percentage is up 13% since 2002, with 82,159 more NYC residents throwing more than half their income into the ravenous rent hole, as compared to seven years ago.
The numbers are quite troubling, but also a bit stoic. If you’re interested in the figures, Gothamist tells the story, as do a number of other news sources.
When I was looking for my first apartment I learned of a magic formula, relating to rent and income: Your annual income must be 40x your monthly rent burden. So if you make $40,000 per year, you shouldn’t be paying more than $1000/month. Trouble is, $1000 isn’t what it used to be. In fact, that price point almost guarantees you’ll have to live in the outer boroughs and suffer the tragic commute. Even when living with roommates, an apartment in Manhattan will cost each tenant can easily cost $1500 for something that might generally be considered puny and ridiculously small.
The 40x rule comes into play when signing on to a lease, especially through a proper leasing agent. If you do not reach that magical threshold, you’ll have to find a guarantor to back you up on the lease — usually a parent with deep pockets. I’ve heard rumours that some agents require this person to earn 100x the month rent, which is pretty absurd by anyone standards. Hell, my parents don’t make $100,000/year. But the 40x rule kinda makes sense as a guideline; doing the math in reverse reveals that figure to be approximately half of you take-home pay. But this is half of overall pay, leaving an even tinier slice for … everything else!
Considering the rising cost of healthcare, food, fuel, utilities, New Yorkers are getting squeezed even harder. It’s more of a struggle than ever to afford those $14 martinis.
Since moving to Jersey City, my rent has gone down quite a bit, but so has my income. In fact, my income these days comes largely from unemployment, but I’m still not quite up to that 40x mark. Times are tough, my friends.
What percentage are you paying?
posted by Scott in careers, health & fitness, life, personal finance, real estate.
Higher Education Can Be A Financial Disaster
Tue 17 Mar 2009 – 23.27
In what is fast becoming a recurring meme on this blog, we have to take a look, yet again, at the absurd financial implications of paying for a university education in this day in age. This article from Thinking on the Margin focuses on a couple who both attended law school on credit, and it didn’t really work out.
Whether you’re looking at an MBA, JD, or PhD — if you’re pursuing an advanced degree for financial reasons, chances are you’re better off either going part-time or else not at all. Otherwise, you may end-up financially strapping yourself for life.
I can relate. After finishing my MA, I’ve been pretty much unemployed for three years and counting. All the while, my student loans are still present and I still have to pay every month for that “priceless” knowledge and skills. Aside from rent (and I assume a mortgage, if I ever get one), my student loan payments are the largest bill each I have to endure each month.
There is some debatement about whether or not it’s urgent to pay off that debt. Most financial advisors will tell you that your student loans are ‘good’ debt, because you education, generally speaking, is an asset that will appreciate in value. That’s sort of a perverse way to look at it, but it makes sense. Nothing is guaranteed, of course. But the flip-side of that argument is that no matter how ‘good’ a debt is, it’s still a debt. It can affect your ability to get a mortgage, to get small business financing, and as we see from the case above, can be hell on a marriage.
I fear that soon we’ll be disclosing our debts on the third date — would you want to be with someone buried in debt? After all, if you end up married, it’s now your debt too.
Not to mention that whole net worth thing. Mine will be strongly negative for the next twenty years or so (at this rate, probably more than that).
posted by Scott in careers, education, life, personal finance.
Tue 10 Feb 2009 – 13.39
In the continuing saga of New York being ridiculously expensive, The Daily News this week runs the numbers of how much money it actually takes to live in New York. Apparently, the magic number to be considered middle class is $123,000!
There’s a ton of doubt to be seeded into these numbers, as well as to their comparative power. For example, that $123k in New York will afford you a similar lifestyle to a measly $50,000 in Houston, TX. Really?
A New Yorker would have to make $123,322 a year to have the same standard of living as someone making $50,000 in Houston. In Manhattan, a $60,000 salary is equivalent to someone making $26,092 in Atlanta. You knew it was expensive to live in Manhattan, but Queens? The report tagged Queens the fifth most expensive urban area in the country. The average monthly rent in New York is $2,801, 53% higher than San Francisco, the second most expensive city in the country.
Check out the article for more shocking and depressing stats. »
Naturally, this forces us to challenge what it means to be Middle Class, and what kind of lifestyle you deem necessary. Along similar lines, I just watched a lecture from Elizabeth Warren entitled “The Coming Collapse of the Middle Class”. It’s lengthy, but informative. And equally depressing. This is the sort of thing that makes you think twice about what sort of career you want to pursue, how many kids you want to bear and where you want to live. Maybe that SUV with rims isn’t so important after all.
This comes amid scandal about how many fancy finance professionals are complaining that they can’t survive on President Obama’s proposed $500,000/year capped salary. The New York Times tells the tale of how families will feel the pinch, and how that salary doesn’t allow for their normal affluent lifestyle including a full-time nanny and private school tuition that would make Harvard admins blush.
Not every bank executive has school-age children, but for those who do, offspring can be expensive. In addition to paying tuition, “You’re not going to get through private school without tutoring a kid,” said Sandy Bass, the editor of Private School Insider, a newsletter that covers private schools in the New York City area. One hour of tutoring once a week is $125. “That’s the low end,” she said. “The higher end is 150, 175.” SAT tutors are about $250 an hour. Total cost for 30 weeks of regular tutoring: $3,750. Two children in private school: $64,000. Nanny: $45,000.
So while you’re scratching to make a dollar out of 15 cents, shed a tear for the über-wealthy who might have to take the subway or pack a lunch or raise their own children for a change.
posted by Scott in careers, personal finance.
College Really Expensive, says NY Times
Wed 03 Dec 2008 – 12.06
The Rising Cost of Tuitions, via NY Times
This just in, the cost of higher education is ridiculously expensive. In fact, the phrase “fuckin’ overpriced” comes to mind. That’s my interpretation, but recent reports published in The New York Times back up my sentiment.
The Times article illustrates findings from the National Center for Public Policy and Higher Education regarding the costs of education.
Over all, the report found, published college tuition and fees increased 439 percent from 1982 to 2007, adjusted for inflation, while median family income rose 147 percent. Student borrowing has more than doubled in the last decade, and students from lower-income families, on average, get smaller grants from the colleges they attend than students from more affluent families.
In other words, we’re getting less and paying a lot more. We could debate [again] the general value of higher education and the manufactured “need” to have a degree, but what is clear is that our society can no longer afford higher education.
Over the last two decades, higher education institutes have began viewing themselves as corporations — paying their presidents as CEOs, treating their students as products, investing in branding, and even structuring degree programs to make piles of money in order to support underfunded subjects. But the drawback of this is that if they expect the American public to education as products, then it too will fall victim to the same rules of consumer culture. In this case: no matter the product, if it’s too expensive, we won’t buy it. (it’s a tough call when it comes to things like fuel, air travel, food, and now education). But that’s just a fact of economics — if we can’t afford it, we won’t buy it.
But let’s step back for a second. Do you feel that today’s college-educated workforce is less or more or equally educated as previous generations? Clearly, with the increased numbers, we’ve lost some exclusivity in academic prowess. Just think that 150 years ago anyone with a degree spoke Greek, Latin, French, and probably German, just as a matter of class and upbringing. But compared to our baby-boomer parents, the first generation of Americans who “needed” to go to college, I think we’re actually doing better. We’ve read the same books, studied the same subjects, and suffered through the same drama of academia, but we’ve done it all while multitasking with the Internet and information age in general. The average college student now is exposed to data and info every minute of every day, and our ability to index and reference it is more important than our ability to memorise it.
But is it worth the money?
For me, the six years I spent in higher education were immense and life-changing. You can’t put a price on that. But I’ll be paying $262.22 every month for the next twentysomething years! I can’t even imagine if I had gone to medical or law school, a situation where you can’t even work part time, and where scholarships are scarce. Considering the recession, I wonder if it isn’t wiser to save that $40,000 for every year of tuition and use it to start your career.
I’d be interested to hear your opinions on the money side of things, especially in light of the new statistics.
posted by Scott in careers, education, life, personal finance.
College Sophomore Fixes Personal Finance Crisis … or Does He?
Mon 24 Nov 2008 – 11.31
Zac Bissonnette, a sophomore at UMass Amhearst and columnist for WalletPOP.com, has proposed a simple solution on how to fix the financial problems faced by our nation.
In this case, he tackles personal finance, as opposed to institutionalised banking and large-scale industrial money-mongering. Since those companies are run by people, perhaps the principles are transferrable. How to fix personal finance and instill responsibility with credit cards, for example? Teach finance in High School.
The high school I attended, however, like most other public schools, had no financial literacy program in place. As I wrote in an op-ed piece when I was a student there, the failure of the schools to teach kids about money has done more to perpetuate the status quo than any lobbyist in Washington could ever dream of.
However, I disagree with this notion. I feel, perhaps too traditionally, that finance matters should be taught at home, by parents. My view may be skewed by the fact that I was raised by a Jewish mother, but I feel very strongly that my own savvy in managing my own finances goes back to the days when I received an allowance, had to complete chores, and worked for minimum wage. My parents showed me that money is important, and that I could only buy nice things for myself if I made a difficult decisions to save instead of spend. When I received my first credit card at 18, no one had to lecture me on how not to drown in debt, I already knew the simple maxim of living within my own means and paying off the balance each month.
Are high school students ready to learn life-long lessons on personal finance? Will dealing with abstract dollars in textbooks have the same impact as real-world money earned at a crappy after-school or summer job? Methinks it will not. Nothing teaches you the value of a dollar more than waking up early, working a hard day in the sun, and then getting disrespected when that paycheck arrives. Ever scrub a toilet? That helps too.
So rather than mandating high school students drop Latin for Personal Finance, why not give them less homework and ask them to get a part-time job. They might even learn something on the job.
posted by Scott in education, personal finance.