Is Unemployment Really That High, was originally written on 2/3/2011 when unemployment was high during the recession. However, unemployment has skyrocketed during the 2020 global pandemic.
The nearby Kentucky Fried Chicken has a help wanted sign up for the past 6 weeks. I asked the manager how the hunt was going when I picked up my bucket of goodness and he said nobody was applying.
They pay $10 an hour for up to 8 hour shifts a day. That's $400 a week and $1,600 a month. Not bad right? I think so, even for a city like San Francisco. For $1,600 a month, you can rent a room with a couple housemates for $700 a month, and have $900 a month left over for food and entertainment. Not bad if you're single.
If you've got a family to support, $1,600 in San Francisco is not going to get you very far, which is why many move out of San Francisco to one of the burbs and commute.
KFC's inability to hire got me wondering: Is unemployment really 10%? Everyday, you see the media drone on and on about how bad the employment market is. I truly empathize with anybody out of work who wants to work. However, if KFC can't find a position for 6 weeks, perhaps the employment picture is actually much better than perception.
The city of San Francisco is hopping. There is more money out there than you think. I couldn't get a cab for 50 minutes the other day from downtown to the gym. I gave up and ended up jogging 3 miles in the rain in my work clothes and 20 pound bag. Shit, that sucked. I asked my well-to-do friend who is approaching his 80th week of collecting unemployment insurance how much he gets and how he's doing. He said roughly $450 a week, which he spends on going out at night. He's having a great time.
WHAT WOULD YOU DO IF YOU WERE UNEMPLOYED?
I actually think about it once every couple of weeks thanks to the media and my own paranoia. The truth of the matter is, I'd probably collect the maximum amount of unemployment possible in order to find the ideal job. I would hold out until the very end. It's the rational thing to do. However, when the unemployment benefits run out, I will be the first person to apply for the KFC job and then blog about it!
If for some miracle I had no savings after 10, 15, 20, 25 years of working, I would be the best damn deep fryer on the planet! I used to work for $3 an hour at McDonald's and know what it takes to be a star in the fast food industry. I'd work hard for my $1,600 a month and I would spend less than $100 a month on food because I'll be stuffing my face with all the fried chicken, mash potatoes, biscuits, corn, and coleslaw I can! I'd also take home all the leftovers which are thrown out at the end of the day anyway and feed others.
In fact, I would work hard to try and get promoted to manager and potentially double my income to $20/hour or $3,200 a month. I'd still look for that ideal job, but I would also be making the best of my time at KFC.
MAYBE THINGS ARE JUST DANDY
Is unemployment really that high? It's hard to believe it. Seriously, for all the negativity regarding unemployment, maybe we have very little to worry about. If you are under 40, you can go back and live at home with your parents or relatives. You've had the luxury of working for 20+ years before becoming unemployed. Therefore, likely have a huge safety net to last you a while.
Think about it. Saving just $10,000 a year for 20 years, 20 years ago and investing the proceeds probably leaves you with at least $300,000 in savings.
Finally, if you have absolutely nothing, you at least have a 13-month extension of the 99 weeks of unemployment which pay some $1,700 a month in many cities. Once the 99 weeks runs out, there's KFC for $1,600 a month and free food. Couldn't you live off $1,600 a month with free food? I know I can.
Note: Just the other day, I was sitting on the ski-lift chatting with a guy. I asked him whether he is taking the week off since it's a Wednesday, and he said, “Nope! Got laid off in December and am taking the winter off with a great severance package, healthcare, and unemployment checks until I plan to start looking again in April. I've already got two job offers but I want to ski!” Now that is the way to live!
What Do You Think About The Unemployment Situation?
Readers, is unemployment really that high? Or is it actually much better than the 10% unemployment rate would dictate? Why do you think it's taken 6 weeks and counting for the KFC to find someone to work for them for $1,600/month?
If you're 45 years old and have been working for 23 years, isn't 23 years of savings enough to hold you through several years vs. a younger person, say 27 who has only had 5 years to save?
Recommendations
I think the best think you can do if you are unemployed is to build a blog and start your side hustle! Post pandemic, you need to learn how to make money from home in case there's another one. The easiest way to make money from home is with a blog!
Update 2021: Thankfully, the unemployment rate has come down to about 6% as of 2Q2021. Here are the states with the highest unemployment benefits. Personally, I plan to re-retire within 12 months because I'm tired as hell! Here's to President Biden saving us from a lifetime of too much work!
Regards,
Sam
Found this through your post on Untemplater. I’d love a job that paid $10/hr. I love any job that wasn’t yet another 2 or 3 month temp position. Stores seem to rather have an opening for months than hire an ex-con.
Come to California. The minimum wage here is $10.25/hour as of Jan 1, 2012!
I think a lot of people don’t think about the changing demographics, especially California, New York, and others. Taxes are too high, and people are moving to other states. Arizona, Texas, and so forth. I don’t know if all the companies moving are going to have the same employees — maybe a few as a guess. The rest are out in the cold.
Moral of the story: Don’t tax so much and don’t regulate so much. Maybe business will move up a few notches where before they were leaving.
I see that you are so positive. To answer your question
on if it’s much better than the 10% unemployment
rate would dictate? I guess it depends
on the people you hang around. Some feel there is no hope
and some take advantage of other opportunities. I’m
an optimist and thinks everything happens for a reason
Yes there’s unemployment. But the majority of us are working
The ones that have given up is such a small percentage.
Dude what are u like Sara Palin and u can see Alaska from your front porch? You must be related to Marie Antoinette ‘if the people have no bread then let them eat cake!’. You obviously live in a well to do SF area where min wage jobs are available given the high net worth socioeconomic group that populates the area. People in your area are not looking for low wage jobs; those jobs have to be filled by those who have to travel into your area from poorer places; even then it’s not worth their efforts because after taxes a large percentage of the income is used for commuting to the job.
Have u been to Florida, Indiana, Ohio and Michigan recently? I have for biz and let me assure you there is some serious unemployment there particularly in the large inner cities. You won’t see $10 hr KFC jobs offered like leaves on a tree because they are taken. You won’t see many jobs available because there is no labor shortage.
Your anecdotal evidence is a bit moronic. Using your logic, if I don’t see any homeless people in my neighborhood then they can’t possibly exist, right?
Wake up princess there is famine, sickness and poverty in your kingdom even if you are sheltered from it inside your crystal palace.
I didn’t realize you are doing so poorly. I’m sorry for your suffering. Know that if you try hard, you can overcome and flourish. You can do it!
What’s this? No publishing of my rebuttal to u??
What rebuttal? I accept you are doing poorly and wish you the best!
I do think it’s easier for those who have had some time to sock away capital — if they’ve been prudent and have been saving, of course. For a younger person who might be still in debt, they don’t have as many options. Nonetheless if someone is getting 99 weeks of unemployment why on earth would they give that up in order to get paid less working the deep fryer? It’s rational to just collect the check until one finds something good.
If I were truly unemployed, I’d lose my mind if I wasn’t doing something productive! I lost my corporate job two years ago, but I’ve never collected a penny in unemployment benefits. Instead, I started drumming up freelance clients. It wasn’t the easiest path I could have taken, but I can hold my head up, knowing I didn’t sponge off taxpayers.
Seriously, though, if I had opted for unemployment benefits instead of forging my own path, I would have disintegrated into an alcoholic pile of goo within 3 months.
I realize that not everyone has the motivation to create their own success, though. Ability, yes, but not motivation.
I’d like to point out that your numbers are wrong. At 10 dollars an hour you actually get $1120 after tax, and those jobs don’t even cover health insurance. That might help clarify why no one seems to be biting the “generous” offer. Not only that but if you actually make the $1600 max in unemployment, you were making significantly more than that before you were unemployed. In most cases even if you applied for the job you’d be washed out as overqualified.
You are saying the government takes $420 out of $1,600 in taxes for an effective tax rate of 26% if you are making $19,200 a year?
I’d love to bet any amount of money that you are wrong and not even close. Please take me up on this bet, please? Pretty please? Cheers
Considering I am looking at my pay old paystubs as I say this, I’ll happily take you up on that. Why are you surprised? It’s a well known fact that between social security taxes, medicare, etc, wages in america are taxed at almost 30%. That’s what makes the investment taxation rate so unfair. You might get some of it back come tax return time, but $1120 is what you’d actually be getting month to month to pay your bills.
Though apparently is I was taking into account all taxes you’d be paying more like 40% https://articles.moneycentral.msn.com/Taxes/Advice/YourRealTaxRate40.aspx . I was just looking at what your take home would be though.
Man Sam, it’s good to read some optimism out there. A part of where I disagree is your assumption/insistence that people are logical.
Is it really so unbelievable to you that someone might have no savings after working for 20 years? Do you not know anyone who knows they should be doing something (saving retirement, eating less and exercising more, etc) but, despite best intentions, never seem to get their feet under them? People act out of short-term interests over long-term ones all the time. I doubt many people without savings at 45 or 55 have anything planned for retirement – they’re likely just in a massive state of denial.
I’m certainly not defending them or saying it’s normal to have nothing saved. I’m just saying that your assumption that people are logical and always make decisions with conscious reflection on short- and long-term consequences seems a bit rosy.
Miss T, yes I believe people are highly rational. Nobody sticks a needle in their eye bc it’s painful, just lime nobody doesn’t save for retirement if they don’t need the money.
Since we are logical, it is therefore logical to conclude that the economy is much much better than people give credit for. My thesis has panned out since my first bullish posts in June, 2010 and many of us have profited handsomely from it.
I’m sure you are doing great too, right?
“Miss T”? I like your abrasive style but I don’t know where you’re going with that. I do agree with you that the economy is better than people give it credit for; I just am not quite as bullish about just how well.
But anyway, touché. I am doing reasonably well for being 24. Certainly better than my boss who doesn’t think he’ll ever be able to retire because of various financial miscues. I have anecdotes on both the positive (my out-of-rehab aunt getting a decently paying job and that allowing her to get her life back on track, my sister who just bought a $2M house with not much, if any, money down) and the negative (the aforementioned boss, my roommate’s lack of work that makes him worry about rent and paying his parents back).
All in all I think people are doing better than advertised, but that doesn’t mean everyone is doing well.
Matt,
I think he made a typing error and didn’t mean to call you “Miss T.”
Back to the program, I think the economy will likely worsen versus getting better but we shall see in 11 short months.
Not sure if you are watching the stock markets and bond markets… but the stock markets are en fuego and the bond market is selling off b/c of so much strength.
The real unemployment numbers are much more dismal than the absolutey fraudulent figures you are hearing , Part time , seasonal temp work , people that have simply given up looking for work and have entered the welfare system are all factors that aren’t even being considered in these equations , The US economy is on the skids and everyone knows it. American Industry , once the envy of the world , is now boarded up factories and tumble weeds , No amount of feel good articles penned by Journalists on the Wall Street payroll are going to fool the American people! The reality is that there has been no recovery whatsoever!
The 45 year old should have had enough time to pay off their mortgage and have a decent retirement fund. But what they’d be dealing with is trying to put kids through college. I guess the 27 year old could still be paying off their own college tuition too. I think it can be tough at any age to lose a job and hope we can all get more job stability and see the economy recover.
You make a great point about mortgage and kids in one’s 40s that may cause a crimp on one’s savings. Hopefully, people have a saving/investing system in place and pay themselves first for their 20+ year long careers!
Genius has a point. I don’t know any of my friends working on Wall St. out of undergrad who has under a 3.5 GPA out of 4.0. Most of them were Magna Cum Laude 3.75 GPAs or better. There’s just MASSIVE competition for those jobs, so they have the ability to choose higher. It’s just the way it is, but that doesn’t mean you can’t break into the field. You just have to try that much harder.
What year are you Jeff? You still have time to jack up that GPA.
Perfect! You have another 4 semesters to get that GPA up. The issue is, the firms you want to apply to will only the top 10% of each target school. So, it’s not your competition btwn your school and state schools, it’s the competition with your fellow students.
Well done! However, I think I wouldn’t traveled the world and collected the $1,600/month instead. We paid into it!
Maybe I’m just an optimist, but that’s just how I look at it. I look at things very rationally. The job isn’t filled b/c people don’t need $1,600 as they have MUCH MORE than that.
Wow, I came out of the reader to see how many people answered your question regarding savings and age. It’s too bad that David M is the only one to brave the question. I did enjoy Nicole “giving it to you something nice”, however. :)
To give my two cents with the majority, I know of two cases:
Case #1: Female, 28 yrs old, 2 kids, from Detroit. Collected unemployment until it ran out. No money saved. Currently about to get evicted. When told about an alternative to eviction, moving into a lower cost rental, the answer was, “I’ll rather be homeless than live on that side of town.” Haha. I guess we’ll see her when she’s an icicle and have baby iciclets.
Case #2: Female, 26 yrs old, 1 child, lives with mother. Looked for a job for about the first six months. Afterwards, she decided that its best to stay home and nurture her child as many mothers wishes to do. She saves pretty much all of her unemployment, so I’ll assume that she’ll be okay once her benefits runs dry; And she’ll have had the benefit of raising her child on the governments dime. Is this fine? Maybe, maybe not. But it supports the “screw that KFC job theory.”
To follow up on David M, great job, Sir. I wish all can save as you have. Unfortunately, we know this to be totally untrue. From what I’ve seen, there are two types of blog readers, those heavily in debt, or those who have come from a deep dark debt laden place but had found a love for personal finance in their climb out.
So, Sam, to answer the question that I was looking to find from others:
I’m thirty years old, have one debt, a mortgage that I ignorantly financed for thirty years. I’m renting it out now but hope to sell it (at a substantial loss) once my renters leave later this year. I do understand that home ownership should be a part of my retirement plan so after selling, I will purchase another home at today’s low rates with a fifteen year or less mortgage so that it’ll be paid off by the time I reach forty-years-old. I have about $40K in retirement and am aiming to save an additional $10K per year for the next 30 years.
The problem is that too many people reach their financial “wake-up” too late and by the time they reach it, they are already forty-five-years-old. So, hell yeah it’s enough if one has been saving for 23 years, assuming that someone has but savings first all of their lives and had no financial hiccups to delete them–like a job lay-off.
Whew. Back to homework.
So again, the solution has to be to start teaching personal finance courses at as early age as possible, over and over again. HEck, I remember sex ed was during 6th grade!
I agree with Little House. I have a family member that’s been laid off for about 18 months now and hasn’t even really looked.
I definitely think the lengthy unemployment benefit period is making people piddle around about looking for a job. They are either holding out for a great position (i.e. high salary) or are enjoying their freedom to do what they want until the benefits run out (like my sister.) The Quiznos near me is also hiring and their sign has been up for a couple of weeks now. I guess no one really needs a job bad enough to work at Quiznos.
Good positive anecdote for the economy! Cheers
Not to burst your bubble, but most of the top financial firms have a 3.5 minimum GPA. Can you raise that your final year of school? It’s more like a 3.75 minimum ie A- or better.
i think unemp is higher for higher paying jobs (economic contraction), and maybe just about right at the fast food level. the issue, as highlighted already, is that those at the FF level are likely enjoying unemployment benefits, or just plain laziness
on a side note, what is the $3 an hour MCD wage worth today (inflation adjusted)? curious if minimum wages (typically what fast foods pay) have kept up with cost of living
$3 an hour 20 years ago is probably around $8-9 now. I remember when gas was only 89cents.
wow – wondering what the world was like back then; whether in actuality or as portrayed by our favorite friends at the media :)
Siloam Springs, northwest Arkansas, just over the Oklahoma border. Population about 13,000. Right off Highway 412, which runs through the strip mall section of town, there is a large factory building which has been sitting empty for the last few months or longer, at least since I’ve been visiting. I don’t know yet what was manufactured there, but one could safely presume that the average hourly wage at this factory was higher than a $10/hr KFC wage. I also presume that it’s not been shut down for very long, as it looks new and the grounds are well-kept. Don’t know if the people that worked there for the last 5 or 10 or 20 years now rely on fast-food jobs or savings. The fast food joints in town don’t have any help wanted signs, that I do know.
I also know of hourly wage employees at my job that don’t take advantage of the 6% company match in the 401k plan. Short-sighted, undoubtedly. Saving 6% of a 40k/year salary may not seem like much to many readers here. I suppose that when living on the razor’s edge every month, that extra $200/month is already spent.
Not taking advantage of any company match is just stupid. If people want to see living on razor’s edge, go to India. We’ve got it so good here.
“I’ve not really heard of someone not having the ability to control their spending, so maybe they have psychology problems to surmount?”
It is amazing how people see the same thing so differently – this is what makes the world interesting!
I know so many people with this problem. For example I know people struggling to pay their mortgage but continuing to buy Groupons to “save money”. I want to scream at these people and tell them that Groupons are not saving them money and that they are wasting their money on Groupons.
I have no way to support this but if I had to guess I would say that 30 to 50% of Americans have problems with controlling their spending. What else would explain all the money spent on Christmas presents when people have so much debt and so little savings?
I have the rational answer, because people get into debt because it feels great spending money they don’t have! https://www.financialsamurai.com/2010/10/25/best-way-to-lose-weight-and-become-debt-free/
Le me ask you though…. are YOU doing OK? Because again, it always seems like it’s someone else who has a problem, but we are doing OK. And if that’s the case, then I think most people are doing OK!
Regarding your debt post – that was another one of your very thought provoking posts that I made a posting to.
Am I doing OK, honestly compared to most of America I think I’m doing much better tha than okay.
You are absolutely entitled to your opinion and I respect it 100%. However, I just do not agree with the premise. As I stated before I believe people reading and posting to finance blogs are much better educated about financial matters and thus are doing much better than the average American when it comes to unemployment, income, debt, savings for retirement, etc.
When it comes to polls asking people how much they have saved and how much debt they have I can not think of any reason for people to overstate their debt and/or understate their savings. I do not know the typical number for either of these, however, I think the quoted numbers are accurate AND I also think the numbers for people posting to your blog will be MUCH better than the average numbers.
I’ll start out – I’m in my mid 40’s and have $400,000 house with a $190,000 mortgage. I have no other debt. I also have about $400,000 in retirement savings and $300,000 in other savings. These numbers are much better than the averages for people in America. However, I would say these numbers may be average or could even be below average for people posting to your blog.
As always, thanks for taking the time to read my post and everyone else’s post and more importantly, taking the time to reply to so many of the posts.
Looks like you are doing great, and that is great! You have helped me prove my point. The average American has much more money and savings than people give credit for. The media is just nuts for always trying to say people are suffering and don’t have this and that.
Everybody thinks they are special, but let’s be frank, we aren’t special. The numbers you have stated are very common, and actually on the low end of EVERYBODY I know who has shared their income with me between 35-45 years old.
This is why I’m so bullish on America. Most of us are staying humble, hiding our wealth and have much more than the statistics say we have.
Cheers
We’ve got a relative in the rural midwest, 34 years old, mother of 3, stepmother of 2. After she was laid off from her bartending/waitressing job (the bar went out of business) she has been trying to find minimum wage work for well over a year now. At the dollar store. At Walmart. At the Piggly Wiggly. There’s no KFC in the town, but she’s hit up Pizza Hut. There’s no jobs in the 60 min area surrounding the town, not even minimum wage (or lower than minimum wage, like waitressing) jobs. Her DH is making 36K/year at his construction-related job. Her bad credit keeps her from a lot of these jobs– The Dollar Store there doesn’t have to hire employees with bad credit and they do run credit checks. Sure, if they lived in SF she’d be able to get a job at KFC, but they couldn’t support 5 kids on that.
Hi Nicole, thanks for your thoughts! Isn’t it curious though how it’s never us, but a friend or a relative in trouble? Why is that? It’s so common an occurrence where I’ve almost stopped believing.
5 kids is a handful. Would it be safe to say the husband and wife have the financial means to support 5 kids, otherwise they wouldn’t? I know most people wouldn’t be pumping out kids if they couldn’t afford it. Or, is it just their supreme horniness that’s got the best of them?
I think that’s what you call “selection bias”… people who are trying to make ends meet don’t have time to read a blog by a guy who just spent 10K in order to get the opportunity to play tennis with grand high muckity-mucks.
She did not have 5 kids, she had 3. #3 was planned. #4 was gotten even though she was on birth control. #5 was a miracle baby, Irish twins with #4 (there’s something like a 7 month difference in their births– #5 was a preemie) who was conceived while she was breastfeeding, on birth control (depo-provera), they were using a condom and he had an appointment for sterilization (which he has since had done). All kids were had long before the recession hit when minimum wage jobs were much more numerous and before the husband’s company went out of business or the auto industry started to suffer.
I cannot fault them for not believing in abortion as a choice for them.
All to say, I do believe that unemployment is that high. Maybe not in the tonier neighborhoods in SF, but in the rural midwest, there aren’t these fancy minimum wage jobs to be had for the asking. But you can make enough to feed and house 5 kids without government handouts in the rural midwest (even if you’re behind on your car payment) , so moving to SF would make zero sense.
I see. And since you brought up $10K for joining a club, do you think that is an outrageous sum of money to spend? The club + the value of my care equals $15K, which seems modest copared to what others spend on a car alone.
How are you doing employment and wage wise? Hope you are OK.
Oh honey, you don’t have to explain your purchases to me. I don’t really care how you spend your money.
If I were making 36K/year supporting 5 kids and 2 adults, then I might want to avoid reading about such things. That’s the selection bias I was trying to explain, why folks who can’t get even minimum wage jobs might not be your target demographic, and thus might not be proffering their own stories to you.
1) It is no one’s business why anyone has five children.
2) It is quite possible to raise a large family in the rural Midwest on $36,000 a year.
Our schools are good, housing is cheap and fun is still the out of doors.
The high school football team is it.
Churches tend to be full and food is put on the table by neighbors when times are tough.
We learn how to live within our means.
Teachers are still paid in the $30,000 range- and they raise families as well.
3) Our children tend to do very well in the world-
Kansas ranks 5th in the nation for reading and 9th in Math and the state
universities keep pumping out real majors.
So…don’t feel bad for your cousin. She is, most likely, going to produce some
hard working, family loving kiddos….
Yes, there are some people who cannot keep a penny in their pocket-
but they are the ones with the third job and grandma watching the babies.
At least that is my experience as a transplanted big city girl in rural Kansas.
If the workers have gray hair, is it safe to assume they’ve been working for 20-30 years already? And if so, perhaps it isn’t so bad bc they’ve had 20-30 years to save and invest?
Union jobs pay more than market rate. Hence, they should have even MORE money saved up, since they are making more.
And, if you don’t save b/c you have a pension, that’s great. Which buttresses the point that things are much better than the media drones on to be.
Sounds like you have excellent initiative! You did what it took to survive, and survive you have!
So again, perhaps things aren’t so bad afterall. The worst cast scenario is for one to make $1,600 a month at KFC with all you can eat food. If that’s the worst case, i don’t think that’s so bad.
“SF is not special. We are no different from anyone else. If you’ve worked 20 years, you’ve saved 20 years. To not do so would be irrational. Are you saying people are irrational and don’t save for their future? Are you not saving for your future?”
Yes I’m saving and probably almost everyone that is reading your blog is. However, I think you need to realize that people reading financial blogs probably are much more educated and much more financially savy than the average person.
I come from a family of 9 children all in our 40’s and 50s. I know almost for a fact that 3 of the 9 children have virtually no savings even though they have been working for 20 plus years.
Do you think it is ironic that people who are more educated and need less financial help are reading financial blogs? If this is the case, how do we reach out to people who need help the most?
Why do you think your 3 siblings have little to no savings after 20 years? I’m seriously curious why they wouldn’t save. Govt bailout expectation, or simply living life to the max? Thx
The reason they have no savings is they have no ability to control their spending. Any little extra money gets spent. Unfortunately, it is actually worse than just spending any extra money they spend more than the extra money.
For example, one sibling won $200 on a scratch ticket – I don’t remember now but I thing the $200 was spent 3 or 4 times over.
Regarding how we help people that need the help most – one idea is that everyone neeed to take a basic finance course in high school. I know some school do this but what percent I do not know. I think your question is a good blog entry.
Hmmm, so perhaps it’s like an addiction or something? I’ve not really heard of someone not having the ability to control their spending, so maybe they have psychology problems to surmount?
Basic finance courses in high school is such a no brainer and I agree. It’s part of the reason why I started the Yakezie Scholarship / Writing Contest. It’s to help educate high schoolers, and get them to think about PF issues now, rather than when its too late.
I think that unemployment benefits tell part of the story, but not all. I think a lot of people are doing like cousin eddy (From christmas vacation) and “Holding out for a management position” I’m of the opinion that you should take whatever job you can get, just so you can at least get some income coming in!
If it’s beneath you, transport yourself back a few generations (to when whoever in your family got to this country). Ask yourself if the work would be below them. I think the answer is no, so just go with that for the time being.
I’d work at Starbucks actually get KFC come to think of it. More prestigious and has great health insurance!!