Return of the artisan

Considering the dismal unemployment data out today, and the even more dismal predictions, we find ourselves at a juncture where there will be a nearly unprecedented number of people out of work. Depending the unemployment figure you are looking at, we are approaching the same number of people that were out of work at the height of the depression in the 1930s (12.5 million today vs. 14 million in 1933--the worst year for unemployment during the depression). 

With so many people out of work, and so few available jobs, we may see the rise of a kind of neo-artisan. During the months that it can take to find work, there are many of us relying on our secondary skills (gardening, cooking, music, art, writing, foreign language ability, etc.) to get by. I would predict that many of the closet artists, writers and musicians would tap into the skill set that was deemed "unprofitable" during the go-go economy of recent years and find ways to make it work for them. In developing these skills, making contacts, gaining confidence and buyers along the way, bankers may find value in throwing pots, insurance adjusters might instead make their dough by baking and former Wall Street Execs could make a respectable living playing the blues. 

Who knows? But I would bet that we will see a flourishing of artisanal entrepreneurs and a proliferation of talent in the months and years to come. So, if you are looking for work, or fulfillment, begin nurturing that hidden talent, and, when you have something that someone else might buy, hang a real and/or virtual sign out and see what happens--you might surprise yourself. 

The photo is of "Joe the potter" at Horseshoe Mountain Pottery ; see also John Sanchez at Sanchez Art Werk and guitarist Brendan Burns for examples of folks who have been putting their talents to work for them for a number of years now and using the internet to their advantage.

When to "cut bait"

I always liked the expression "cut bait"--it suggests both determination and realism. After a long day of fishing, someone has to make the decision that the fish aren't biting and that it's time to call it quits and return home. In my last post, which has become more pertinent judging by the new crop of upcoming layoffs reported this morning, I suggested that people need to identify a top three or four major expenditures that they could cut if a job loss is in the offing. 

For example, first I would, depending on public transportation in your area, loose all extraneous vehicles (motorcycles, 2nd and 3rd cars, boats, etc.) that cost you in upkeep, insurance and/or monthly payments. Second, lose the expensive cable setup--go basic cable and dial up internet if you can't live without these things--you'll save a bundle annually. Third, any major purchases you are paying off, either through store credit or on credit cards--big screen TVs, unnecessary furniture, that $1000 espresso machine...you get the idea, take it back. Fourth, push back any leisure travel, family vacations or other boondoggles you have planned to 2011 or 2012.

We are creatures of habit, and when faced with the craziness that would accompany a job loss, we may be hard pressed to make the necessary adjustments. The compulsion to cling to the things that give us comfort in hard times have the potential to drag us down if they continue to drain our resources. All the more important to have a plan in place should you ever need to make the call and "cut bait."   

Unemployment -- it's worse than you think

The financial meltdown became widely recognized just a few short months ago. The debate over whether or not the US was in recession quickly changed to whether or not we are heading toward a depression. The cheerleaders of the US economy, those who spent last summer blustering on about the economic strength and fundamental soundness of our economy, are much more somber, if not altogether silent, these days (there are a few exceptions, but they are beginning to look a bit ridiculous). Now the debate, subdued as it is, concerns the possibility of a depression in US. In fact, in the comparative assessments of many of the pundits, we have slid from undergoing a recession similar to the post 9-11 era, to the early 1990s and now it is suggested that we will be experiencing a recession that would compare to the length and severity of the early 1980s. The next stop is the 1930s, at which point the debate over whether or not the US is sliding into a depression will have been resolved. 

One point that is being used to mollify us is a comparison between today's unemployment figures with those from the 1930s. The high for that decade was around 25% in 1933. Currently the Bureau of Labor Statistics reports that, as of October 2008, we have an unemployment rate of 6.5% -- a far cry from the 1930s. This fact has been repeatedly brought up to dispel the specter of a new Great Depression. However, if you look at how the Bureau of Labor Statistics reports its figures, 6.5% measures only those who have actively sought a job in the last four weeks (category U-3). A better estimate is the U-6 category which measures 

1) people that are unemployed and includes those who are unemployed and have looked for work in the past year, but not within the last 4-weeks, and

2) the marginally employed--i.e. those who want full time employment but are unable to find it. 

This more inclusive number put the US unemployment rate at 11.8% in October (see http://www.bls.gov/news.release/empsit.t12.htm). 

However, the SGS Alternative Unemployment Rate, which includes people who desire employment but have not looked for work during the past year, is much higher. This figure was used until the Clinton administration, but is no longer included in Bureau of Labor Statistics reports as it tends to be politically inconvenient. The SGS Alternative Unemployment Rate is currently at 15%. 

Considering that recent mass layoffs in the financial sector and currently projected layoffs in retail and manufacturing, the unemployment rate could double during 2009.  Even Goldman Sachs projects official unemployment (U-3) rising to 9% in 2009. If the SGS rate correlates with this projected rise in the U-3 rate, then a conservative estimate of the SGS Alternative Rate will shoot to around 23%. At this point we are talking depression era unemployment levels by the end of 2009--and who knows what 2010 will bring. 

If you still have your job, I would begin the uncomfortable process of considering what you would do if you had no income for 6-12 months. Do you have enough savings to see you through? Most Americans don't.  But don't get bogged down with worry and stress-- now is the time to formulate your plans B, C and D. Could you live on unemployment? Would you be able to pick up a comparable job within a few months? Do you have family or friends that could put you up for a while? What possessions would you get rid of first? It is a good idea to immediately identify the top three or four items that you would not be able to afford if you were in reduced circumstances. Too often folks loose their job yet still try to get along as they have in the past, but this denial simply drags them down faster.