Recession's toll on employees continues to mount
By Gordon Powers, Sympatico / MSN Finance
Employees are becoming increasingly concerned about the economy, and this concern is causing them to take a much more reactive approach to their finances, reports Financial Finesse, a California company that fields financial questions from hundreds of thousands of employees at more than 400 U.S. companies.
They found that only about 6% of the calls they received in the first quarter were about retirement planning. That’s down from about 14% last year, as more individuals than ever dialed in with questions about managing their immediate debts and budgets. Instead of planning for the long term, most people are narrowing their focus to managing their day-to-day finances, they report.
In addition, the calls are more serious with people considering more drastic steps such as bankruptcy, foreclosure, dramatically downsizing their life style, and taking on second jobs to make ends meet.
What's worse is that the number of employees looking to tap their existing retirement assets by taking loans and heavily-taxed hardship withdrawals from their pension savings has more than doubled over the past year.
This makes sense, of course, as millions of jobs have been eliminated since the beginning of the year, while foreclosures in the States have surged to their highest levels in years. Add to this the fact that other studies suggest household income has dropped over the past year, on average, with the proportion of workers reporting household incomes under $50,000 rising from 30 to 38%. Household assets also have declined, with 75% of employees claiming they now have less than $100,000 to work with.
It's a gloomy story, particularly when you consider that 86% of the people calling Financial Finesse's help lines confess to having no idea if they’re on track to retire and are really worried about their prospects.
Even among those who have done some retirement planning, 72% have severe doubts about their asset allocation and risk tolerance, while 52% admit they don’t really have a clue when it comes to stocks, bonds or mutual funds.
Do things seem this bad where you work?
Posted by: jacko | Jun 3, 2021 8:57:16 AM
"Employees are becoming increasingly concerned about the economy"
They are? why do we have a 2% increase in housing sales over last May? The sheeple should be concerned but they're not..reason, free money from the bank with nothing to lose but their credit..oh the crying will be here very soon..once they understand that we are headed into a catastrophe..dare I say, DEPRESSION...look south for the answers..Canada is just the little brother follwing around big bro. The US is finished, their debt is not managable and they keep taking on more of it..countries are thrwing out the dollar as a reserve currency, buying gold and so on...Remeber Rome, the US is modern day ROME with Canada to follow...not good news
Posted by: Martin | Jun 3, 2021 10:01:11 AM
Employment is not automatic. Education is not always official either. When someone is accused of being on drugs, it is usually fear of an instition and not the user that the user detects. Renewable natural resourses have been for too long in the hands of liberals or democrats, and lately conservatives and republicans are beginning to admit their shortsightedness to science, deemed the recluse of those who actually apply what they are supposed to learn in the exact sciences. Psychology is an especially abstract science in that it alone does not put us in control of our plundered natural resources but enables us to break free of the stereotype that the auto industry alone, for example, is the reason for America's success. Diversity is not a free-for-all. Those who think, will know that real-estate is useless once they're dead, and who says the children follow in their parent's footsteps? Then why the rapid urbanization? The fight against incest? So there's the case for dragging the heels in a quick-for-profit oriented economy going globally accountable..
Posted by: Mike | Jun 3, 2021 10:35:25 AM
I understand that this is about personal crisis, but I think there is a point missing in this article. When we start making short-term personal reactive decisions to a harsh current reality, it is the job of our leadership to ensure that we stay in alignment with long-term cohesive future goals.
My hope, is that our leadership (government), regardless of political party, doesn't fall into the same human trap of making knee-jerk reactions to the crisis of the day (because just like our households, they are facing harsh income/expenses realities) without regard for where could all end up in 3, 5, 10 years.
I also hope, that we are smart enough not to fall for false promises of solutions to our current issues that are made to us when we are vulnerable because they appear to magically solve our problems. Behind all magic, is a clever lie that's hard to see, but it's there.
If our leadership can hold onto the bigger long-term picture, and we can support them for doing so, I am confident we will end up in a better place with some great lessons learned for future generations.
Posted by: one of aged hip wisdom | Jun 3, 2021 10:16:04 PM
Wow.....lots of new age/ Zen moron nonsense in these comments! Those who believe that government is their friend will have more enemies than they realize! Those who think that government can get them a better job or a nicer residence or a happier life have more problems than they know!
As some disgruntled (but very wise) British general observed in 1800: the yankee republic will survive only until its government discovers that it can bribe its people with their own money.
Modern government is not the solution, it is the problem. They believe they can manage our affairs better than we can.....and will do their best to prove it.....even if it kills us.
Posted by: Wayne | Jun 4, 2021 5:57:16 PM
It hurts alot! I get paid in USD and I have taken a real hit over time. Now, we can all say that when it was swinging the other way, we were getting paid more that enough, but the problem is that all our hourly wages are in USD, and an hourly wage in the United States is far lower than that of a Canadian wage. Factor in the fact that working for an American Railway in Canada and our No.1 buisness is exporting goods to the U.S, and I can tell you that the cuts are deep! Lots of lay-offs with no end in sight!
A high Canadian dollar hurts us all! Almost every sector in buisness gets some form of a hit from a "high loonie", unless you own a sports team!
Posted by: caseynjennifer | Jun 7, 2021 12:56:21 AM
The recession has hit us so hard that we are now doing something we never dreamed of to get by....porn! We both lost our jobs around Christmas and since then I have managed to find a job, albeit one that pays a third of what I use to make, my wife has had no luck! We have a mortgage, cars and kids to keep up with and our personal website and movies we have made is what is paying our bills! The downturn in automotive has killed the area we live in....alot of houses for sale or been reposessed. It's scary out there. Only jobs available are minimum wage, but that's not even close to what we are doing with our "business venture" It's like the Dirty Thirties all over again. Let's face it, sex sells!
Posted by: Richard | Jun 7, 2021 12:45:03 PM
I had wind of what was happening in the States back in late 2006 when one of my friends left Ft. Lauderdale, Florida and moved up to Edmonton. His words were..."Things getting read bad. People losing their houses all over the place."
I've been having discussions with many people/friends especially in Ontario and across the border and many of the stories are the same. Even a lawyer I spoke to in Oregon said he was being kept busy...8 days a week...with bankruptcy and foreclosure cases. Just recently another friend in upstate NY said he went to one of his clients and they told him flat out, they're closing for good. The fact that so many people are being laid off has undoubtedly cause a waterfall of distress on many a person and family. While I'm able to survive with some unconventional employment (no office, trades or computer/internet related job) I know more than a few people on the West Coast are hurting. Lower Main Land, BC is VERY FORTUNATE to have the Olympics, Police and Fire games, Coupe Grey Cup and other revenue streams coming into the province during the next few years. No two ways about it though...the recession will hit Canada and the rest of the world very hard (maybe excluding China but even they are finding it difficult) and all involved will have to take stock of how much time will be needed to bring the world back from this cliff.