Although many people do not like to talk about losing jobs, but recently, the whole country’s official jobless rate stood up at 7.2%, it’s already the largest proportion in last 16 years, and unofficially, the rate may be as high as 17.5%, because the government doesn’t track people who’ve grown so discouraged that they haven’t actively looked for work in a year.
Anyway, there is nothing funny about losing your job, and despite optimistic economic outlooks, the truth is companies are not hiring, and if they are, they’re not paying. The tech industry is particularly suffering with magazines like IT Contractor predicting up to 6 more years before the vigor returns. And in May, this publication reported that business investment in technology has hit its lowest point since 1938.
WHAT IS GOING ON?!?
The government relies on statistics, not the human’s behind the statistics to tell a story. In reality, millions of people are underemployed (working well below their normal salary levels and skills). Ask the waiter at your favorite restaurant or the clerk at the retailer. You may surprised to discover how many have MBA’s, BA’s and yes, even doctorates. I can think of three Ph.D.’s, one MBA and three other college graduates, all friends of mine currently in this situation. All with at least 10 years experience and brilliant track records. They can’t find the positions in the 75K to 150K salary range their experience demands. They’ve taken low paying positions, while they attempt to launch their own companies or fill the gaps with freelance. These people show up as "employed" in government reports. In reality, they wish they were.
Here are essential steps to make if you are laid off.
1. File for unemployment.
Call Your State’s Unemployment Office. Don’t feel guilty about this. You and your employer have been paying into this fund your entire working life. You’ve earned the money you are going to receive through your own hard work. This is the very first thing you want to do the second you are terminated. Call your state’s unemployment office. Most states begin the benefit period from the day you call, not the day you were let go. You will not get paid for the first week of unemployment in most states (although in some they count the day you call as the 1st week–let go Friday, call, become eligible the following Monday. ) It will take 3-4 weeks to get your first check, longer if you were fired because they must do an investigation. In most cases you will still receive compensation even if you were fired. The exceptions are termination for misconduct (lying, cheating, abusive language etc…) or criminal acts.
If you’re laid off, you automatically qualify for state unemployment benefits. Payment levels are determined by how much you made, up to state-imposed limits. Typically, you can expect to receive about $293 a week for 46 weeks. If you live in a state with a high jobless rate (6% or more), you’ll get 59 weeks.
Filing can be done without leaving the house. Opt to file online if offered, since phone wait times can be lengthy. In most cases, it takes two to three weeks after you file to receive your first benefit payment. Some states require that you wait a week before getting benefits so that the second week claimed is the first week of benefits. To be eligible, you have to be unemployed through no fault of your own (you can’t have quit your job or been fired for misconduct), and you must have worked for a “base period,” usually four of the last five calendar quarters. Even if you have received severance, you still may be eligible in some states.
2. Trade down the totem pole.
Snagging a job, even if it’s not your dream position, will allow you to better weather the economic storm until the job market improves. What’s more, there is value to getting your foot in the door at a company where you ultimately might want to pursue a long-term career.
3. Get retrained.
If your old job was in an industry hit especially hard by the recession, consider developing a new, more marketable set of skills. The good news is that retraining is available on any budget.
If you can afford to go back to school, check out community colleges or technical schools, which generally tailor programs to local industry needs. For instance, DeVry University, which has 91 locations across 26 states, interviews employers to determine which skills are in demand. Based on that information, the school currently is churning out project managers, software engineers, and computer-systems experts.
If paying for retraining is not an option, you’ll find many nonprofits that offer training services at no cost. Goodwill Industries, for example, is particularly useful to those who have been out of work for a long period, lack education, or are disabled. The charity offers free training in fields such as IT, health care, retail, and banking.
If you are 55 or older, AARP has job programs for anyone who meets certain income requirements. It will assess your skills and interests, then connect you with free training.
4. Fill time gaps in your résumé.
If you currently are jobless and worried about the impression that will make on a potential employer, seek out freelance or consulting work. While not full-time, freelance work allows you to expand your experience and stay sharp. When revising your résumé, don’t forget to include any volunteer work you might have done. For example, leading your church’s finance committee is critical experience for a financial professional—whether you were paid or not. You can list such efforts in the experience portion of your résumé. Also, consider taking a class that relates to your profession, and list that detail in the education section of your résumé.
5. Find other sources of money.
While many states are extending the term of unemployment benefits, a government check doesn’t pay like a real job. Indeed, jobless benefits replace only about 35% of lost wages for most American families. Certainly, this is the time to tap any emergency savings. If you’re broke, don’t delay—slash expenses and cash out any certificates of deposit you possess.
You may be tempted to withdraw funds from your 401(k) savings plan. But be forewarned. If you empty your 401(k) before you turn 59, you immediately lose as much as half in taxes and penalties. Once you’re laid off, you lose the option of taking a loan or a “hardship withdrawal” from your 401(k). Your best option is to roll over the money into an IRA. Once the money is in an IRA, you will be able to tap it without penalty to cover large medical expenses or pay medical-insurance costs.
Most insurance companies will not allow you to do more than one month’s worth of prescriptions at a time. Sometimes your doctor can request multiple months if you are to be out of the country for an extended stay. If you depend upon medicine for your health, get as many months as possible before your prescription card expires. That $10 a month prescription could turn into a $120 a month requirement you can’t afford right now.