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Life on Severance: Comfort, Then Crisis - WSJ.com - The Diigo Meta page

online.wsj.com/...SB125780714976639687.html - Cached - Annotated View

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jasonwelker
Jasonwelker bookmarked on 2009-11-10 keynesianism wages recession sticky wages unemployment

Things are scary out there for the unemployed in America! This article tells some sad stories of opportunities lost and next eggs blown! It also illustrates a key concept from AP and IB Economics: the theory of sticky wages and prices, at the heart of Keynesian macroeconomics. 

  • The family recently vacationed in Virginia Beach, Va., and likes to dine on Porterhouse steaks. Since losing his job, Mr. Joegriner, 44 years old, has had several offers. He's turned each down in hopes of landing a position comparable to what he held before.
    • jasonwelker
      Jasonwelker on 2009-11-10
      Unemployed Americans unwilling to accept lower wage jobs! This sounds like evidence of the "sticky wages" Keynesian observed in his arguments for fiscal stimulus!
  • Mr. Joegriner is a member of what might be called the severance economy -- unemployed Americans who use severance pay and savings to maintain their lifestyles. Many lost their jobs in 2007 and 2008, and thought they'd soon find work. Now, they're getting desperate.
    • jasonwelker
      Jasonwelker on 2009-11-10
      I bet these people just wish they had taken that good offer a year ago. Finance people laid off during this recession must have an artificially inflated view of their own value in the labor market: over-inflated like the assets they had dealt in!
  • Last week, lawmakers passed a bill extending unemployment benefits up to 20 weeks. Unemployment benefits, which typically last about 26 weeks, were expected to run out for 1.3 million people by the end of the year, according to the National Employment Law Project.
    • jasonwelker
      Jasonwelker on 2009-11-10
      Extending unemployment benefits, while it is a NICE thing to do, only increases the downwardly inflexible nature of wages.
  • The dramatic changes in such sectors mean that many of the eliminated jobs will never come back. Some workers may suffer a permanent hit to their standard of living.
    • jasonwelker
      Jasonwelker on 2009-11-10
      Why won't certain jobs ever return to the US economy? Is it at least partially BECAUSE American workers are so unwilling to accept lower wages?
  • When Michelle Patterson was laid off as an executive director of marketing for a publishing company in January, she figured she could subsist comfortably, at least for a while, on the $20,000 she had reserved from her savings and severance combined.
  • She spent as much as $250 a week on networking meals and drinks with contacts. Some days, she scheduled up to four coffee meetings a day, picking up the tab most of the time. She also spent $30 a month for pedicures and $150 on her hair.
    • jasonwelker
      Jasonwelker on 2009-11-10
      You've got to be kidding me! This is what our world has come to. Unemployed Americans, delusional about their own worth, spending $180 a week on what, mani-pedis?

This link has been bookmarked by 5 people . It was first bookmarked on 10 Nov 2009, by Jason Welker.

  • 17 Nov 09
    mpohorilak
    mpohorilak

    "one are the fancy salon visits; Ms. Patterson sips Starbucks just once a week. She downgraded her cable TV to basic channels, saving $8 a month."

  • 11 Nov 09
    ssmacleod
    Stephen MacLeod
  • 10 Nov 09
    jasonwelker
    Jason Welker

    Things are scary out there for the unemployed in America! This article tells some sad stories of opportunities lost and next eggs blown! It also illustrates a key concept from AP and IB Economics: the theory of sticky wages and prices, at the heart of Keynesian macroeconomics. 

    keynesianism wages recession sticky wages unemployment

    • The family recently vacationed in Virginia Beach, Va., and likes to dine on Porterhouse steaks. Since losing his job, Mr. Joegriner, 44 years old, has had several offers. He's turned each down in hopes of landing a position comparable to what he held before.
      • Jason Welker

        Jason Welker on 2009-11-10

        Unemployed Americans unwilling to accept lower wage jobs! This sounds like evidence of the "sticky wages" Keynesian observed in his arguments for fiscal stimulus!

    • Mr. Joegriner is a member of what might be called the severance economy -- unemployed Americans who use severance pay and savings to maintain their lifestyles. Many lost their jobs in 2007 and 2008, and thought they'd soon find work. Now, they're getting desperate.
      • Jason Welker

        Jason Welker on 2009-11-10

        I bet these people just wish they had taken that good offer a year ago. Finance people laid off during this recession must have an artificially inflated view of their own value in the labor market: over-inflated like the assets they had dealt in!

    • 4 more annotations...