How is Job Loss Part of a Down Economy?
When the economy slows down because of a drop in demand for consumer goods, a rise in job losses or unemployment is not far behind. This is because employers no longer need to produce at previous levels, and in some cases cannot afford to, so it follows they also do not need to keep as much staff.
Therefore, a fall-off in demand can, and often does, lead to cyclical unemployment as employers struggle to maintain profit levels by reducing costs, most commonly by cutting staff to save on wages, to keep pace with falling demand. Unfortunately, what happens as a direct result of this is even more unemployment. The unemployed must now budget accordingly and so their reduced purchasing power further contracts the market causing consumer demand to continue to slide.
How to Deal with Job Loss
Although unemployment is generally referred to as a macroeconomic concept, no other statistic is felt on a more individual level. Unemployment figures may send signals about the health of the economy, but when a family member comes home with a pink slip it becomes personal.
The initial shock of unemployment can be hard to swallow but surviving a prolonged period of unemployment can be a challenge. The following steps help individuals who lost their job, for whatever reason, to get back on their feet.
- Assess Personal Finances. The first thing to do is start to go through finances. Determine how long savings will last at the current rate of spending and start moving around assets if necessary.
- Cut Spending. Highlight spending in the budget that can be reduced or even eliminated until income situations improve.
- Apply for Unemployment Benefits. The idea of applying for unemployment benefits may not be appealing, but if one is low on savings, he needs to meet expenses or face sliding into debt. Each state’s State Unemployment Service Office helps the unemployed to find out about qualification and documentation requirements to get the process started.
- Start Thinking About Your Next Career Move. Now is a good time to start thinking about the next job. If you have thought about changing your career before, use this adversity as an opportunity to make that move. If starting a business is of interest, individuals may be able to find a part time job that covers expenses while they work on starting a business venture. There may be several avenues to take so use the time wisely to consider possible options.
- Stay Positive. It can be extremely difficult to stay upbeat and positive in the face of such potential turmoil, but it is important to recognize that job loss is not the end of the road. Losing a job can be the chance to find something new and exciting or the impetus to become an entrepreneur. Seek encouragement from friends and family and try to hold on to the positives in life. The entire family needs to work together to pull each other up when times get tough.
Job Loss Can Lead to a New Career Path
Remember, losing a job could be the beginning of a bright new chapter in anyone’s life. What comes out of the experience depends largely on the person’s perspective, so it helps to make the decision to rewrite life’s script and get started on charting a new course.