Chapter 2 in Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead is Paycheck Paralysis. It says the younger generation can’t get ahead because they don’t get good jobs. They have become Bouncers, Jugglers, Tempsters, and the Pajama Class. The stories are as good as the ones in the previous chapter.
Susan had seven jobs in six years after she graduated from college. She quit her first job because she wanted to live close to her future husband. She left her second job because another job offered a higher salary, and she quit her third job because the hours were too long. She left her fourth job because a startup gave her substantially higher salary and commission. After the startup failed, she was unemployed for a while. Then she got into retail, her sixth job. She left the retail job for law school. Now she works for a non-profit while attending law school.
The author said these frequent job changes are a result of flawed economy. Except for the failed startup and the aftermath of the dot com bubble, I don’t see where the economy has anything to do with it. She left one job for another voluntarily for personal reasons, often for higher pay.
Anna worked several jobs while going to community college. After that she worked for a government agency for 3-1/2 years until she decided to go to an art school in San Francisco. She worked several part-time jobs while she went to the art school. The $15,000-a-year tuition and fees were paid by student loans. Her part-time jobs paid her living expenses. Anna estimates she will have $76,000 in student loan debt after she’s done with the art school.
Working and going to school at the same time is tough. I don’t know what made Anna leave her comfort zone at the government agency for an art school in San Francisco, but we’ll have to respect her decision. She thought it was worth it despite the huge student loan debt she will have. Otherwise she wouldn’t have decided to go to an art school in one of the most expensive cities in the country.
Dylan has a bachelor’s degree in screenwriting from NYU. When she graduated, she was only able to get a job as a receptionist at a production studio in New York earning $17,000 a year. She then worked as a freelancer for a few magazines. Five years after graduating from college, she got her first full time salaried position in New York City earning $35,000. Because the expenses were so high relative to her income, she had to file bankruptcy. Now, 10 years after she graduated, she earns $45,000 but she still has $15,000 student loans debt which couldn’t be eliminated in a bankruptcy.
New York City is expensive! Everybody knows that, right? I bet she’ll have a more comfortable life if she lived elsewhere.
The Pajama Class: No story but basically writers, editors, and designers who work in the “creative industries” work from their home as freelancers without the security of a steady salary or benefits. According to the book, 83% of the Pajama Class prefer the flexibility and freedom as a freelancer. The rest want a full-time job but can only get freelance work.
It’s tougher to make a living now because we are competing in a global economy with a global workforce. Manufacturing jobs shrank. Even some white collar office jobs are outsourced overseas. When we directly compete with lower paid workers in other countries, our wage growth slows or stagnates. That’s the unfortunate effect of globalization.
The author made two proposals to get us back on track. The first proposal is creating more career ladder programs in which people can be trained on the job and grow their career. Teaching assistants can train and become teachers. Nursing assistants can become registered nurses. This is a good proposal and I agree with it. The second proposal is making it easier to unionize. I’m not too sure about this one because a union may be able to hold up the wages for its members but more jobs will just go overseas. Imagine a world in which people in union jobs are paid well while others don’t have a job. I’m not sure as a country we are better off that way.
Any thoughts? More to come. Next week we will look at debt.
Get The Best Rate
Mortgage rates came back down! I saw rates below 4% for 30-year fixed, just over 3% for 15-year fixed, with no points and low closing cost. Let banks compete for your loan. Get up to 5 offers at LendingTree.com.