Nouriel Roubini of Roubini Global Economics wrote on Sunday that the U.S. job market is sure to get worse at least through 2010, and could remain terrible for years after that. His advice to workers: “if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down.” He has a policy suggestion that could make things less bad, but the political chance of it being implemented is near zero, and the risk of bankrupting the country if it were to be implemented is considerable. If you have a job, the chance that you will be unemployed for the next five years is large enough to take notice of; if you are unemployed already, that chance is much larger.
For many of us, the issue is not about waiting for things to get better, but finding a way to survive until things get better. Strategies might include radical personal cost-cutting, such as canceling television and telephone contracts, cutting your own hair, baking your own bread, and heating only a few rooms in your house during the winter. If you have a quarter acre of land, subsistence farming might be an option (if not now, then when April rolls around). You might turn one of your hobbies into a business, even if you can only hope to make $20 a day at it. If you are more fortunate, you might just need a college degree, an advanced degree, updated training, or some sort of personal makeover to get your next job. Or, if nothing is going right for you, your plans might include selling everything, moving to a warm climate, and living in a tent.
It’s hard to believe this is America where we’re talking about this, but we are facing a situation where millions of workers will be unemployed for five years or longer. Congress lacks both the political will and the financial means to create jobs on a scale that would keep this from happening, unemployment benefits will absolutely not be extended for five years, and food stamps aren’t enough to keep you going. The job prospects for workers without a college degree who have been unemployed for more than one week are literally the worst they have ever been, so it’s foolish to just hope that the job offer you need will arrive next week. Can you survive for four years after the unemployment benefits run out? Yes, you can — but don’t wait till after the holidays to start figuring out how you might do that.
The bottom line is that it is your responsibility to make your household budget add up whether you have a two-income household, a one-income household, or a zero-income household in which the last unemployment payment is a distant memory. Don’t be afraid to look at those numbers and find ways to make them work — because for the first time since the New Deal, Uncle Sam is looking at us and saying, “This time, you’re on your own.”