By Kathy Bornheimer, for SBT
I agree with Clare Zempel’s statements regarding "Prepare for the Big Chill" in the July 7 issue of Small Business Times. I have heard him speak on several occasions over the years and he is a very practical man. We as a culture do not spend our money wisely and many went into overwhelming debt when the good times rolled. This includes corporate, government and individual spending.
Who’s bearing the consequences of these frivolous ways? It is the endangered working class. Those people in $25,000-60,000 household incomes are having the rug pulled out from under them.
Why? There are numerous reasons. They are in income brackets that disqualify them for assistance programs when they run into trouble. This group is employed in jobs that are the most vulnerable to lay off, downsizing, facility closure, etc. They were lulled into a sense of false security and became good little worker bees and never developed plan B. Financial institutions and credit card companies encouraged accumulative debt. Debt is like weight gain. Yes, it does creep up on you. You don’t realize that you’re in trouble until it’s too late, and just like weight problems, there are no overnight solutions.
I have been an employment consultant for almost 15 years now. In my practice I see the employment trends before they hit the papers. I’ve been connected with this group in waves and cycles since 1989. Another observation that I can detect is that these situations are now increasingly evident in people over the age of 50 with single women ahead of men significantly in this predicament. The majority of these people are skilled and educated, but they’re no longer needed by their employer. Their skill sets and employers needs don’t seem to match anymore.
Everyone needs to adapt to the mindset of the self-employed. In my entire professional life only one third of those years have been in salaried positions. The rest of my employment has been in straight commission or fee only income environments. I have also been the sole source of income.
Live within your means. Change your spending patterns and reduce your debt now.
Do not become house poor. Buy what you need. Save up for what you want. Have 6 to 12 months living expenses in a savings account. Is it easy? No, but it can be done. Treat your last paycheck as if it really is your last paycheck.
Do not be dependent on your employer for your financial needs. People need to take control of their own budgets. I have worked with people who have trapped themselves in jobs that they hate or that do not satisfy them personally or professionally. This will only increase the problems when they lose that job.
Things will get worse before they get better. Employment trends will continue to be lean and mean. The working class needs to prioritize what’s really important to them and prepare to weather the storms of uncertainty until they achieve work/life balance. This will actually benefit good employers as they will have a high quality workforce focusing on their jobs, not their problems.
Kathy Bornheimer is the owner of Milwaukee-based K.B. & Associates.
