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Diary of a Recession Baby
Aug. 18, 2010, 12:01 a.m. EDT · Recommend · Post:
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"¹ Previous Column
Scammers target unemployed workers
First Take "º
Gold, headlines, and hot money in inflation mode
By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) -- Since being laid off as a machine operator more than a year ago, Robert Blalock has drained his individual retirement account. Now the 56-year-old resident of Fernley, Nev., doesn't expect to retire until his 70s.
"We make our house payments, but it's month to month," Blalock said. "If I don't get a job pretty soon we may end up going into foreclosure."
Jerry Seib discusses why isolationism, protectionism and anti-immigration sentiment is growing as the economy slumps.
Blalock is one of millions of Americans who will experience a long-term lifestyle scar due to a job loss.
The long-term negative effects of unemployment can take different dimensions, said Harry Holzer, an economist at Georgetown and the Urban Institute. There will be earnings losses, and kids may have trouble in school, he and other economists said.
For those who lose a job, the consequences of a layoff are "severe and long lasting," Till von Wachter, an economist at Columbia University, recently testified before U.S. lawmakers.
"The average mature worker losing a stable job at a good employer will see earnings reductions of 20% lasting over 15 to 20 years," von Wachter said.
"The effect of a layoff is devastating," he told MarketWatch. "On average it will take a long time to recover."
Others agreed. "It's a huge hit, and also persistent," said Heidi Shierholz, a labor economist with Economic Policy Institute.
Earnings losses vary among demographic groups and industries, but no group is exempt from "significant and long-lasting costs of job loss," von Wachter said.
Still, that doesn't mean all laid-off workers will suffer the same fate.
"It's not predetermined," von Wachter said. "All of these statements are about averages. Workers can do things differently and they may advance and recover more quickly."
Education is a key factor in a laid-off worker's career prospects, many economists said.
"If those same people who lose work experience now take the time to get a little more education, an extra degree or certificate, if it's in the right field that can offset the loss," Holzer said.
For his part, Blalock has been working to expand his skill set. He recently earned his bachelor's degree in special education, and is looking for a teaching job.
"This is one of those things where you kind of circle the wagons, and hope for things to change a little bit," he said. "Hopefully, things will turn around. Sometimes you have to regroup."
It didn't take much for inflation to make its big comeback, writes Nick Godt.
3:50 p.m. Aug. 17, 2010 | Comments: 25
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