As featured in The Wall Street Journal, Money Magazine, and more!

From the category archives:

Career and Work

Comments
Email this article Email this article
Print this article Print this article

New Graduates Facing Unemployment May Never Reach Income Potential

by Flexo on October 19, 2009

in Career and Work

The unemployment rate for young workers between the ages of 16 and 23 is 18%, and that is an increase of five points from a year ago. That age group includes high school drop-outs as well as college graduates, and for these people the future looks bleak. Adults are taking the minimum-wage jobs teenagers might be offered in other economic situations. Older workers, otherwise approaching retirement, are not leaving the workforce as quickly. The openings for younger workers aren’t there.

The bad news is starting your career in a recession is one of the worst things you can do for your long-term financial security. More bad news is that there is little any one person can do about the economy at large. Here are the numbers, from a study at Yale quoted in the cover story in today’s BusinessWeek:

For each percentage-point rise in the unemployment rate, those who graduated during the recession earned 6% to 7% less in their first year of employment than their more fortunate counterparts. Even 15 years out of school, the recession graduates earned 2.5% less than those who began working in more prosperous times.

Young adults might be destined to be a “lost generation.” Here are some suggestions for 16-to-23-year-olds who find themselves having a difficult time starting their career in this recession and want to mitigate its effects on long-term income.

1. Finish your education

It’s an issue of supply and demand. First, if you have not done so, completing your Bachelor’s degree will have two important effects. First, it will improve your marketability among entry-level employees when fewer open positions will create a competitiveness that ensures that the best qualified candidates will win. A Bachelor’s degree is a gateway to at least the middle class, and that’s going to be more important than ever.

Second, finishing college now will keep you out of the worst of the recession. This will allow you to stay out of the worst fight for jobs, but it has some drawbacks. Delaying the start of full-time income can also have detrimental effects on your long-term income — but if you wouldn’t be working anyway, this isn’t much of a disadvantage. Also, if you are relying on student loans, you will be amassing more debt that will require payoff down the road, perhaps shacking you to a job or career that is not best for you. New student loans have higher interest rates than they have in the past, adding to the pain of debt.

If you have your Bachelor’s degree, consider spending a few years to earn your Master’s or Doctorate degree. Are you worried about being overqualified? Don’t be. As we’re seeing in the recession where many workers are competing for few jobs, anything that helps you stand above the rest will be an advantage rather than a disadvantage. You might want to consider adapting your desired career to one better suited for an advanced degree, however.

2. Become an apprentice

In general, apprentices earn more throughout their careers than those who don’t hone their skills in a formal training program. Traditionally, apprenticeships are common for certain crafts and trades. Electricians, plumbers, and carpenters often get their starts through apprenticeship and there is significant income potential in these fields.

One creative answer is to become an apprentice for a career that does not traditionally fit this profile. For example, if you have musical talent and would normally consider performing or teaching in a better economy, consider composing music for films or television. You can contact a professional currently in the field and contact them about becoming an apprentice. One key to successfully finding an apprenticeship is the willingness and the ability to work for free.

3. Start your own business

I’m not talking about selling your possessions on eBay, but padding your savings account with cash rather than padding your home with useless objects is never a bad idea. Everyone has at least one marketable skill. It may require some time brainstorming to determine exactly how you can turn your skills into a service you can offer people or other businesses.

A recession is perfect timing to start a business, particularly if you can dedicate all your time to making it work (that is, you are otherwise unemployed). Many new businesses suffer because the owner needs to devote his or her time to the day job, a spouse, and perhaps even children. For young workers, the time will likely never be better for starting a business with the ability of giving it your full attention.

4. Save money

As a recent graduate or drop-out, you may have the option to move back in with your parents for a short time. After all, there is a recession and being able to save money on rent or a house payment is worth the temporary shame you might feel for going home with your tail between your legs. This is most likely the biggest opportunity for savings, but you don’t want to take advantage of the situation. Show your parents that you’re working hard to make the recession work for you, and they’re more likely to give you a break. And don’t forget to express gratitude.

Consider frugality as a way of life. In an economy where you have less control over your income thanks to fewer employment options, you can still control your expenses to a point. Take the extra time to determine what you are willing to cut back in order to help your money go farther. Occasionally, generic brands and store brands are good compromises.

Creativity leads to success

Surviving in a recession where it’s difficult to find a job relies on creative thinking. Use the opportunity to rethink your career path. If the acquisition of money has been your ultimate goal, realize that money by itself is not a goal. You may use the opportunity to break into a less popular field with a lower income potential but with a greater satisfaction potential.

Accept that the odds are against you if you want to compare yourself and your bank account against people who began their careers in the height of the economy, people who, on average, will out-earn those entering the workforce right now.

Photo credits: CarbonNYC, roland
The Lost Generation, Peter Coy, BusinessWeek, October 8, 2009

{ 12 comments }



Comments
Email this article Email this article
Print this article Print this article

Fulfilling a Dream for $8 an Hour

by Smithee on October 13, 2009

in Career and Work

I just graduated a “Level One” (read: newbie) improv class. At first, I signed up for the class because I can think of few thing scarier than getting on stage with no script. I’m not known for thinking on my feet, I don’t “BS” well, and even when I know my lines, I get terrible stage fright.

So I made myself go to this class as soon as I knew I’d have eight free weekends in a row. It took about four years to get up the courage. I’d like to say that it also took some time to get the admission fee together, but of course the $200 went on a credit card (technically it came from the $800 that would otherwise have gone toward paying down the credit card, but the net effect is the same).

I didn’t have an extra $200 to take that class, but man, was it exciting. I had to deal with strangers, criticism, bad accents (most of them mine), and a basic requirement of acting in a scene where 1) you don’t know what you’re going to be saying, and 2) you also don’t know what the other people will be saying.

I didn’t think I could do it, but after eight weeks, we put on a show, and darn it if the audience didn’t laugh and cheer.

So, I figure, the class was 3 hours every weekend, for 8 weeks, for $200. That’s $8.33 an hour to have a creative outlet, learn to think on my feet, and re-learn to perform in front of strangers. I think that’s a reasonable price.

I still don’t have an extra $200. In fact, I’m still about $6,000 in a credit card hole, but I signed up for Level Two, anyway.

{ 3 comments }



Comments
Email this article Email this article
Print this article Print this article

Earning What You Have: The Mindset I Hope I Never Lose

by Smithee on September 25, 2009

in Career and Work

I think I come from a moderately humble background. My parents are both college graduates, which is a statistical leg up by itself, but my father had to work two jobs until I was 15, and I’m the youngest of my siblings. Mom also started working part-time when I was about 10, and then full-time later on. Suffice it to say we were not showered with gifts, though I only remember one particularly depressing Christmas, when I got a fancy pair of socks from Santa.

It was only later that I learned Mom had something of an addiction to JCPenney, and they were saddled with a pretty huge credit card debt until they were into their fifties. (It wasn’t all household shopping, of course. I’m sure that’s how they paid for part of our college tuition, too.) So, we weren’t spoiled, but we did pretty well. Lower middle-class, I guess you’d say. And I grew up into the belief that if you possess something, it’s because you earned it.

I knew kids poorer than me, and I knew kids richer than me. I remember listening to a conversation a “rich” kid friend of mine had with her mother, and her mother was lamenting the fact that when my friend was younger, she got everything she wanted. Her mother felt it gave her an unfortunate sense of entitlement. I don’t have that, and I hope I never get it, but as I get older, I can foresee some ways in which it might happen.

Ways I’ve already “cheated”

College

My college education was paid for by my parents. I had no student loans and no scholarships of any kind. I’m not sure I was even aware of the need to apply for such things, and though I took a part-time job working for the Dean’s office, anything I earned basically went toward feasts at Taco Bell and the occasional computer game.

I sort of feel like I cheated, in that respect. But if I know anything about parents, I know they’re happy to give their children opportunities to succeed. And I thank them for it all the time. I feel like I’m paying them back a little when I receive recognition in my field, or a raise.

Do credit cards count?

Okay, so credit cards are my enemy. If there is a little devil over my shoulder, he’s wearing Visa and Mastercard logos (and why are the little devils always men, huh?). Sometimes I want something, usually electronic, and I convince myself I’ve earned it, even when I can’t pay for it yet. I get it anyway. It’s cheating.

Except these things do eventually get paid for, and the interest payments seem like punishment enough. I know people who’ve reduced their credit card debt by more than half just by ignoring them for years. Their credit scores suffer, too, of course, but that’s the decision they make. It’s hard to tell in the long term which method costs more.

Being born into it

But there are people who don’t have modest backgrounds, and whose parents can’t help but give them everything they want. The brain is a funny thing, and so these kids grow up into adults who have an enormous sense of entitlement. Without any other educational influences (and thankfully, these are plentiful), such people will become impossible to deal with. A person like that could rationalize away never giving to charity, or hiding money in an offshore account, just because they can.

That’s not really cheating, but I think it’s really pathetic. I feel bad for a person who’s never felt the uncertainty of knowing where they’ll get the rent money.

Easy come, easy go

Instant celebrity (or anything similar to winning the lottery) can mess a person up. Parties and drugs aside, all too often they seem to make terrible decisions with their finances. If you go from $40,000 a year to more than a million a year, how do you not have the presence of mind to save most of it? And yet, the apparently overwhelming temptation is to buy lavish possessions, a mini-mansion, and then throw parties for your friends until the money runs out.

We know that record companies will do everything they can to steal from their latest money-maker, all the while making the artist feel like they’re financially secure. Hopefully this knowledge has filtered its way into every aspiring star’s consciousness, and they’ll be prepared with a reliable attorney.

Of course, it’s not just musicians who find sudden wealth. Sometimes you just have to be the random, somewhat-telegenic person in the right place at the right time. Monica Lewinsky, for example. All she had to do was tell her story, and she’s set for life. She didn’t earn that.

Ridiculous salaries

I get an itch every time I hear a phrase like, “Blah Blah, who earns $750,000 a year…” No, he doesn’t. Nobody “earns” that much. If the world were a reasonable place, the highest salaries would go to emergency workers, really great teachers, investigative journalists and people who find and stop wasteful spending in government offices (that’s not a complete list, just off the top of my head). But as it is, we reward athletes (who we often find were cheating with steroids), and executives who don’t actually do much, aside from make plans, smile at clients, and otherwise increase shareholder value.

But that’s capitalism for you. We give the money to people who make us money, not necessarily to the people who earn it. I don’t want to be the recipient of that kind of money. But if it were offered, would I refuse it?

Conclusion

I struggle with the concept of “taking advantage of the system,” because it’s impossible to know if I’m benefitting at someone else’s expense. And for me, that’s a deal-breaker: wealth should never come through a method that deprives someone else who is just as deserving as me.

I have an entirely new group of decisions to make, since my wife and I are incorporating a business, and we’ll have to weigh the consequences, for example, of “do we take a tax deduction on the part of the mortgage we’re using for business?” I don’t want to be a cheater, and I hope I never lose that attitude.

{ 15 comments }

Comments
Email this article Email this article
Print this article Print this article

People Will Judge You Based on Your Name

by Flexo on September 17, 2009

in Career and Work

Humans are by nature judgmental, and there are good reasons for this. Even though it is often premature, judging quickly helps people make critical decisions with limited information. That limited information, when combined with prejudices or generalizations, can result in poor decisions.

An interesting article from CNN Money asks if your name can prevent you from getting a job. Absolutely. If you have the “wrong” name — wrong in the eyes or ears of the reviewer — you are less likely to be called for an interview after sending a résumé identical to someone with the “right” name.

The National Bureau of Economic Research conducted a study a few years ago in which the authors responded to 1,300 employment ads, sending out 5,000 résumés. In addition to keeping recruiters and hiring managers busy, they measured that résumés featuring names like Emily Walsh and Greg Baker would receive responses 50% more often than those featuring names like Lakisha Washington or Jamal Jones. When comparing résumés featuring good qualifications with those featuring superb qualifications, the superb applicant has a 30% higher chance of being called if the name on the résumé sounds “white,” whereas superb applicants with a “non-white” name do not see an increased probability.

While this doesn’t measure the likelihood of getting a job after an interview, it does point out the initial judgment due to nothing more than a name. If you feel your name could be an initial detriment to your job search, there are several options, but none of them are very good.

1. Legally change your name. Your name is a symbol of your identity. Decades ago, it was common for immigrants to the Untied States to Americanize their names, and it wasn’t such a bad idea for those looking for a new life in the country. This practice is less common now, whether it is due to pride or the shrinking world. I believe for many people, changing a name to fit in with a prejudicial world is too much of a compromise to make.

2. Take on an Americanized nickname. Interestingly, it is apparently common for people born in China to take an English name but prefer to use their Chinese given name when living in the United States. Taking the opposite approach may help you fight the initial prejudice in the United States. If you feel your name is holding you back when searching for a job, keeping your last name but offering an American nick name might help you get your foot in the door.

3. Use only your first initial on your résumé. It would be interesting to see a study that measures the results of this tactic. It may only provide an advantage if the applicant’s last name doesn’t inspire a judgment.

I agree with the author of the CNN article: focus on the aspects of your image that you can control without sacrificing your identity. But this is only from my perspective as someone with a name that doesn’t sound very foreign. With the unemployment rate in the United States still high, perhaps more people are willing to compromise more for an advantage — or to level the playing field.

{ 18 comments }

Comments
Email this article Email this article
Print this article Print this article

Small Business Administration’s Top 10 Tips

by Smithee on September 11, 2009

in Career and Work

My wife and I recently started a business. Technically, I think we’re planning a business, since the incorporation papers are still winging their way through the mail, but it feels like it’s been started. We’ve got a P.O. Box, a domain name, and my wife the President of the company has been devouring books with titles like “Working for Yourself” and “Start, Run and Grow Your Own Business”.

For the moment, we’re focusing on finding work for her, since I rather like my day job (and subsequent health benefits… wouldn’t it be great to find affordable health insurance when you start your own business?), but I wouldn’t mind picking up some extra freelance work on the side. I’m starting to think that the only way I will ever pay off my credit cards is by increasing revenue to a level far above what I need to get by.

Our first outing as a company was a couple of days ago to a local Chamber of Commerce networking event. I had a couple glasses of wine so that I could pretend I’m not painfully shy, and though it was still awkward, I was rewarded to see people’s faces light up as I described the kind of work we’re planning. I saw some expressions on faces that seemed to say, “hey, we could use that kind of work at our business!”

But there’s still plenty for us to learn. Since the President seems to have the book-learnin’ angle covered (or could it be because my eyes get tired looking at words on paper?), I’ve been looking online for advice, and found that the Small Business Administration has a YouTube channel. The video production values are about what you’d expect from a bureaucratic agency, but I figured the content might still be worthy. As an example, here’s their video going over the “top 10 tips for small business owners”:

I noticed that “networking” isn’t in the Top 10, or perhaps everybody accepts it as a given. Either way, I hope this video series is useful to the rest of our readers who also have entrepreneurial tendencies. If you’re one of them, what other advice can you offer us newbies?

{ 4 comments }

Comments
Email this article Email this article
Print this article Print this article

Hip New Funding Site: Kickstarter.com

by Smithee on September 8, 2009

in Career and Work

This certainly isn’t the first or only Web site where one can describe a project and ask for donations, but if word of mouth is anything to go by, the new Kickstarter.com is the hip place to get funding these days.

I first heard about it on Twitter when one of my heroes Jesse Thorn linked to his project for people who want to learn to dress better, one might say “more sartorially”, if one were in the habit of speaking like a character in a PBS murder mystery series. Jesse described his project, tweeted about it once or twice, and the project is now over-funded and, one assumes, in production.

About 60% of the projects have been successfully funded, and they range from “help me produce my next album” to “experimental three-wheeled human-powered vehicle”. The trend seems to be that donors get a little something back for their effort, whether it be an autographed CD or credit in a Web series, etc.

I think I’m personally a little too old-fashioned and/or proud to ask for free money from strangers. If I have an idea for a new project (and I have them about once a month, most of them never launch), and I think it’s worth pursuing, and all I’m missing is the financing… isn’t that why people get things like loans and business partners?

Anyway, if you’ve used a service like this successfully, we’d love to hear about it in the comments.

Got a dream but no cash? The Internet can help, Matthew Goldstein, Reuters, Sep 4, 2009

{ 4 comments }

Comments
Email this article Email this article
Print this article Print this article

Top Ten Highest Paid CEOs: What Would You Do?

by Flexo on August 17, 2009

in Career and Work

Are you on this list? Chances are the following list of the highest paid CEOs does not include you, Don’t feel bad; I am not included either. In 2008, these ten individuals accounted for $2.2 billion in compensation in aggregate.

Whether or not CEOs deserve compensation at levels 17,000 times higher than the average worker in the United States or 50,000 times higher than the average worker across the globe is still up for discussion, particularly if compensation is not based on results. But for whatever reason, here are the amounts of total compensation for the ten highest paid CEOs of American companies.

  1. Stephen Schwarzman, Blackstone Group: $702,440,573
  2. Lawrence Ellison, Oracle Corp.: $556,976,600
  3. Ray Irani, Occidental Petroleum Corp.: $222,639,705
  4. John Hess, Hess Corp.: $159,566,940
  5. Michael Watford, Ultra Petroleum Corp.: $116,929,392
  6. Aubrey McClendon, Chesapeake Energy Corp.: $114,286,867
  7. Bob Simpson, XTO Energy Inc.: $103,485,972
  8. Mark Papa, EOG Resources, Inc.: $90,471,784
  9. Eugene Isenberg, Nabors Industries Ltd.: $79,333,079
  10. Michael Jeffries, Abercrombie & Fitch Co.: $71,795,744

According to the report from The Corporate Library, the organization that reported these figures, Schwarzman’s compensation amount includes the vestment of equity shares in the company he was granted when taking the company public. Only twenty-five percent of his total grant vested in 2007, and another twenty-five percent will vest each year until complete. That will keep him on top of the list for a few more years.

What would you do with $702 million — let’s say $350 million after tax? That would leave me with more than enough to start a foundation with an endowment and still have some left over to invest conservatively and provide myself a nice income for the rest of my life.

The top 10 highest paid CEOs are…, David Goldman, CNN Money, August 14, 2009.

{ 7 comments }

Comments
Email this article Email this article
Print this article Print this article

Growth Career Fields for the Next Twenty Years

by Flexo on July 27, 2009

in Career and Work

If you happen to be entering college and would like to decide the field you would like your career to be or feel the need to choose a major, you may want to consider a field that has growth prospects over the next twenty years or more. Even if you are already a few years into your career and it haven’t progressed the way you would like, now is a good time to consider shifting to a new direction. It would be impossible to accurately predict the future, but I can select a few careers I think will be growing based on current trends.

Information technology

Information technology (IT) is going to be huge, if not just in the next twenty years, for the remainder of the twenty-first century. While there is a trend of outsourcing jobs overseas, there are many types of careers that must remain local. Technology infrastructure is an exciting field. I expect broadband networks will be expanded to new areas and the populous areas already serviced by broadband will see upgrades. Beyond fiber optics, wireless broadband will be a strong trend as well.

Finance

Over the next twenty years, baby boomers will be retiring. Many still have pensions and many have 401(k) retirement plans. Retirees are going to need to know what to do with their money. Financial planners will have a strong market for their services, and so will investment advisers who sell products like annuities.

Health care

Politicians have their eyes on health care right now, and this is a valid response to the same social condition that requires more careers in finance. As the baby boomers, one of the largest demographics, continue to age, they will need more care. Home nurses will be in demand. Existing assisted living communities will increase capacity and new communities will be built. As an increasing number of people look to medication, more pharmacists will be needed.

Environmental scientists

Companies hire professionals to conduct environmental impact analysis whenever land is being developed. Not only is there still vast amounts of land that will be developed in the next twenty years, the focus on “green” will mean there will be even more work for environmental scientists. Environmental technicians will be in demand as well as entrepreneurs who create and manage the next generation of environmental consulting firms. The economy’s current slowdown means there may be less work now for environmental scientists whose work depends on new development, but I expect that to change when the economy recovers.

Not everyone needs to chase a career or job path that looks like it will be in high demand. I generally believe people should look to their own talents and desires before statistics in determining a course of study or career. I don’t deny, however, that fitting in to a carved-out path based on population patterns is a good idea for some people.

Are there any other careers likely to be in demand for the next couple of decades?

{ 4 comments }

Page 1 of 2412345Earlier Articles »···Last »