I received The Call exactly a year ago at 11:30 a.m. EDT. That was a bit early. For almost nine years I had worked from my home in Charlotte, NC for a small company in California, so calls from the office before noon my time were not frequent. When I heard that my boss, his boss and the HR director were on the phone, I did not need to hear another word from them to know that my life was about to change.
It did not exactly come as a surprise, since we already had a mass layoff in late 2008, and when several scientists left on their own in the spring and summer of 2010, there was no visible effort to replace them. Furthermore, several important projects fell through as our customers (mostly pharmaceutical companies and health plans) were sitting on piles of cash but refused to spend it on anything.
And so I got to share the experience of millions of Americans in the Great Recession. I am sure many of my early experiences were typical – dealing with severance paperwork, signing up for LinkedIn, shipping company computers back to the office (well, this may be less typical), composing a resume and browsing ads on the Internet. I am also sure some of them were nearly unique.
My top priority in the first month and a half was actually wedding and honeymoon planning. I proposed on top of the Eiffel Tower in late April, we came back from Europe in early May, booked the earliest available church date – early October, and thus had less than five months to plan everything. For various reasons (including health scares with our parents) we were seriously behind by the second half of August (in fact none of the honeymoon arrangements had been made). So having plenty of free time was a pretty substantial silver lining.
The wedding went well (I must say that I actually consider myself better off than a year ago – a good wife is a lot harder to find than a good job) and the next day we flew to Rome. I had some secret hopes of having some job interviews via Skype while sitting on our room’s balcony in Sorrento with the Gulf of Naples and Mt. Vesuvius in the background or in Agrigento with the Concord Temple in the background, but, alas, that was not to be (in fact I did not score any interviews for months). After 25 days, we came back (just in time for Halloween) and I completely focused on the job search (except for an occasional weekend in Las Vegas or on the Atlantic Coast).
All through the winter, the job market was frozen. I would apply around New Year’s and get and interview in March! In the spring there clearly was a thaw, but summer has brought a drought. I’m not an economist (although I occasionally play one on FrumForum), but I think we may well be headed for a double-dip recession.
Another observation I can report is that being overqualified for most positions is no fun. On the other hand, employers are now much pickier about skills and experience. Back in 2000 the interviews went: “You don’t know Java? No problem! Are you at least willing to learn?” A couple weeks ago I got a call about a PhD level position which overall looked like a good a fit. The HR screener asked me how much SAS experience I had, and when I replied “light”, that was it – they wanted intermediate or advanced.
I don’t even know whether with employer attitudes like that I should still bother applying for any quantitative finance positions – I don’t have any experience in that field (only book knowledge). In my opinion, that is actually a good thing, since the existing financial models were proven spectacularly wrong in September 2008, and a fresh unbiased look would be beneficial. But the employers have their own opinion.
Longtime readers probably think that it would not be like me to write a long article on any topic without any political angle, and I am not going to disappoint them. So here goes.
Unemployment insurance is not well designed (and if it was voluntary, I would not bother paying the premiums). The cap is low, and I get less in a week than I used to earn in a day. It can cover my mortgage payment and some of the utilities, but that’s it. If not for a nice severance package and my savings and investments, I would be in serious trouble and definitely could not keep my home (while selling it quickly would be quite a challenge nowadays).
On the other hand, it discourages me from even trying something less conventional, e.g. getting a temporary contract for a couple months in another city, since I would not save much over that time and might still be jobless for months afterwards, but without the benefits. I can only imagine that people with average incomes who get unemployment benefits equaling half of their previous pay, but without any FICA taxes or commuting costs, have a much stronger incentive not to work until the benefits run out, especially if due to falling demand for some of their skills new jobs are likely to pay somewhat less. The system really needs to be overhauled.
The political system also needs to be overhauled. We should scrap the primaries and start from scratch. We may eventually come up with a similar system, but first we must acknowledge fully that the grandiose experiment in democratizing the nomination process has completely failed (does anybody think for a moment that in the bad old days of smoke-filled rooms Christine O’Donnell would be nominated for Senate in Delaware, even if the smoke in the room was from some illegal substance?!).
Special interests (often amounting to little more than a handful of politically active billionaires) manipulate the primaries and exercise a chokehold on both parties. This results in a situation where we have the worst economic and unemployment crisis since the Great Depression, but neither party cares at all about either the economy or the jobs, while each party is obsessed with ideology. Let’s review the tape.
President Obama was inaugurated four months after the start of the financial crisis. He had plenty of time to revise his priorities and come up with some new plan. But what did he actually do? He did his best to just ignore the crisis and instead he focused mostly on his pre-existing ideological priorities – such as universal health care and global warming. Sure, both are important issues, but neither was an immediate crisis.
Obama just claimed – quite implausibly (e.g. does anybody really think that raising energy prices is a sure way to improve a fragile economy?) – that tacking those issues would help solve the crisis. Sure, he also had a half-hearted stimulus. But it was very ineffective, since the bulk of it financed either pre-existing priorities of congressional Democrats or the priorities of special interests, such as public sector unions. Furthermore, Obama did some damage to the economy by circumventing bankruptcy laws to reward his allies in UAW. Now he finally promises to present a jobs plan – after he comes back from vacation.
The Democrats’ insouciance about the economy and jobs created an opening for Republicans who seized the opportunity and took control of the House of Representatives. But did they proceed to advance serious proposals to improve the economy and create jobs? No! They immediately started fighting for their own pre-existing ideological priorities, such as smaller government. Nothing wrong with it, but that’s not exactly what’s on my mind most of the time.
Furthermore, all that unusually fierce fighting led to a debt downgrade and destabilized the markets – just as I have to keep selling my stocks and bonds in order to pay the bills. There will be consequences. In the last decade I donated at least several thousand dollars to various Republican causes. This decade, Republicans can forget about it (they should count themselves lucky if I still vote for them). Let them solicit donations from those whose economic interests they represent. That’s certainly not me.
And so it looks like neither political party is going to offer solutions any time soon. The unemployed just have to wait until at least 2013. The problem is, I can’t wait till 2013.