Archive for March, 2009

If you’re involved in policy, then the unemployment rate is a key indicator of economic health. If you’re forecasting economic trends, then the same is true. But for the average job-seeker, this rate is little more than a distraction.

People are getting canned at increasing rates. If you’re reading this blog, then you already know that. We’re also in a recession, by the way, in case you’ve been living in a cave for the last six months. That’s about all the context you need in order to understand the level of competition in the job markets and to set realistic expectations.

Economic indicators, and especially the unemployment rate, are poor representations of individual opportunity. The stock of unemployed people is rising, and this is concerning to policymakers. But this is a $14+ trillion economy, and the labor markets don’t simply freeze in a recession. Businesses open and close, industries expand and contract, jobs get created and destroyed, positions get filled and vacated; the economy, and by proxy the job market, is always in motion. This motion ensures a flow of opportunities for individuals in all times. It just takes more time, more effort, more tact, and more luck to make it happen when that stock of opportunities wanes.

In addition, few people know how to interpret the unemployment rate.

First, less is not always better. Excess labor cools an expanding economy and prevents inflation, helping the economy to grow at a healthy clip. Economists disagree about where the break point is, but the “target” or “natural” rate of unemployment is probably somewhere north of 5 percent.

Second, the unemployment rate is a trailing indicator. This means that unemployment will continue to rise for a quarter or so after the broader economy has already turned around.

Lastly, the figure only counts people who are actively looking for work. Discouraged or retired workers do not count. As people give up, reignite a job search, or return from retirement, the unemployment rate will change. It’s important to realize that layoffs are not the only determinant.

Now that you know how to interpret the unemployment rate, you can feel educated when you ignore the latest release from the Bureau of Labor Statistics this Friday. If you’re looking for a distraction, watch Chris and me on Fox Business News during the lunch hour.

When the housing bubble burst, it took the economy down with it. Housing prices plummeted, investors got hosed, banks went under and jobs got cut. But you already know this.

It may surprise you to hear that the mortgage industry is adding headcount again. Mortgage rates are the lowest they’ve been since the 70s, which is starting to spur activity. According to a recent Bloomberg article, however, the industry is ill-equipped to process the $3.1 trillion in mortgages that are due to course through the system.

Banks and brokers shed so many jobs last fall that they are understaffed. Bloomberg claims Bank of America just added 5,000 to the ranks. Nobody else seems to back up the story, but it makes sense. Community lenders didn’t fire so many people, so they are less likely to be adding people. National banks and thrifts, on the other hand, are running lean.

If you can get past the irony and the bitter taste in your mouth, retail lending might be a a decent industry to find a job.

For those who are unemployed and looking for a job, tax season couldn’t have come at a worse time. And if the emotional costs of dealing with unemployment weren’t enough, a prolonged job search can prove to be very costly. Fortunately there are a host of income tax deductions available for those who are actively looking for work.

Expenses that you incur over the course of your job search may be eligible for a deduction against your taxable income. These costs are deductible even if you have a job, regardless of if you actually land the position or not. Armed with some basic tax advice and a little bit of moxie, you too can take advantage of these frequently forgotten tax benefits.

Qualifying expenses generally fall into three categories:

Outplacement & Employment Agency Fees

You are allowed to write off any agency fees that you have paid while looking for a new job within your current field of work. Allowable deductibles may include several employment services such as recruiters, career counselors and job coaches. However, if you find a job and your new employer agrees to pay back these fees, you will need to include the amount received in your gross income up to the amount of the tax benefit of the prior year.

Resume Preparation Costs

This category encompasses an array of expenditures directly associated with applying for a job. Such expenses include the costs of paper, envelopes, postage, phone and fax charges.

Travel and Transportation Expenses

Costs incurred from traveling to and from job interviews may also be tax deductible. Airfare, mileage, lodging and meal expenses — depending on the circumstance — are all examples of charges that may be written off when not reimbursed by the prospective employer.

As highlighted above, there are several different ways to cut down on job search-related costs through tax breaks.

However, the IRS imposes several limitations. For starters, expenses are not deductible for those looking to make a career change into a different field or for  first-time job seekers. Others may be ineligible if there is a substantial lapse in time between the last job held and the current job search. Finally, you can only deduct job search expenses if, together with all other miscellaneous deductions, they exceed two percent of your annual adjusted gross income.

For more information, download this PDF, courtesy of the IRS.

… and by retirement, I mean unemployment.

When I quit my financial services job in Boston in August 2008 to move home to Chicago, I had no idea how tough the job search would be.  I had a job lined up, but the market continued to crumble and the company froze hiring.  It was a tough transition, especially at first.  Maybe it’s just me, but I never thought I would be that person looking for a job in a miserable economy.  But I was that person — I still am that person — and I learned over the past few months that it is perfectly okay.

After I got over the initial frustration of meeting with recruiters and reading about mundane and unappealing jobs online, my outlook on the whole situation lightened quite a bit.  One of the biggest challenges for people in today’s job market is staying positive and realizing that sometimes things are simply out of your control. I think it’s important for people to remember that it’s all about having the right mindset.

At the end of September I was still looking for a job, and I started an “early retirement” blog.  The truth is that the blog started out as a complete joke, but  it’s actually been a pretty fun way to make light of the fact that I am unemployed and have all day to literally do anything I want.  My friends find it amusing (at least they pretend to) and encourage me to document some of the random occurrences of my fun-filled — and boring — days of early retirement.

Blog topics have ranged from daily food consumption, to awkward encounters with females at the gym, to the time when I woke up and thought there was a burglar in the house and nearly attacked my father, who had not left for work yet, with a sand wedge. There are many great perks of being retired/unemployed, but one of my personal favorites is having the time to do things I didn’t have time to do when I was working.

One day in early winter I was shooting hoops at the gym and decided that I wanted to increase my vertical leap so I could slam-dunk a basketball.  Wait a sec…the 6”1′ white kid who could barely jump over a footlong from Subway and who was cut from the freshmen basketball team to dunk?!  Yep.  Why?  Well, because I have the time.

A buddy of mine let me borrow his old vertical leap performance shoes and I have been working on “Operation Slam Dunk” for the last two months.  Some may think this is completely ridiculous — and it is in many ways — but it’s fun and it is something to keep my mind distracted.  I’ve even made a couple of YouTube videos documenting my jumping progress.

The point is simple  – for those who are in a similar situation, do something with your time.  Don’t sit around on the computer all day looking at jobs.  That’s not healthy.  Or fun.  Leave your apartment.  Get out and do something you have wanted to do for a while.  Take a road trip, reconnect with old friends, learn how to dunk or take up a new hobby like learning to play the fiddle or whatever.  No matter what, I think it’s incredibly important for people to take advantage of their newfound free time and have some fun.

By the time I settle into my nexy job, I’ll be able to dunk. What will you be able to claim thanks to your time off?

by Bill Clerico, guest blogger

Deciding to start a company is no small consideration.  It requires vision, patience and confidence (or arrogance).  When one has spent years working for someone else, receiving a steady paycheck in exchange for doing specific tasks, it can be downright daunting.

Last fall, I left the salary (and brutal hours) of an investment banking analyst for the life of an entrepreneur.  With a partner and close friend, I am building WePay.com, a new type of online bank that looks and feels like a social network.  The salary is gone, but the hours haven’t gotten much better.

There were more sacrifices to be made.  I moved from the downtown Boston neighborhood of Beacon Hill to the much more “modest” suburb of Revere, MA.  My credit card balance has seen better days.  My weekend beverage of choice (Hendrick’s on the rocks) has been replaced by dollar drafts.  I couldn’t be happier.

For me, the creative freedom of starting a company has far outweighed the sacrifices.  I wake up every morning to work on a problem I am passionate about: making it easy for groups of people to collect and manage money.  I was always “that guy” collecting the checks for ski trips and hounding people for their march madness pool money.  When Rich and I are done, “that guy” will be obsolete.

Though I am still learning as I go, I’ve scraped together a few thoughts to impart to would-be entrepreneurs:

• Find an idea that you are truly and utterly passionate about.  Some days, you’ll have nothing to cling to but that passion.  If you don’t believe in the success of your business unconditionally, how can you expect someone else to?

• Find investors, alternate sources of income, or both.  If your business won’t generate revenue right away, make sure you have some cash to pay the rent.  These days, investors are hard to come by, but it might be worth checking out angelsoft.net for some ideas, or searching for entrepreneurial networking events on meetup.com.  Think about skills you have that can help you make money.  Can you help build websites?  Tutor?  Walk dogs?  Craigslist.org can be a great resource to find odd jobs.

• Participate in the community.  Find local events in your area, and join Twitter and other social networks online.  The relationships you build in the both the real and virtual worlds will pay dividends in the form of customers, partners, investors and employees.

• Build a great team.  Someone who claims to be good at anything is usually mediocre at everything.  It’s a competitive world out there, and mediocre companies rarely do well.  Give yourself an honest self-review, find your weaknesses, and find partners, employees or advisors that can help you overcome them.

The good news is that few people have the guts to strike out on their own, so the mere act of going for it sets you apart.  And hey, if all else fails, you can always go get a job (though the title on your business card might take a hit).

Bill is the CEO of WePay.com, and maintains a personal blog at www.billclerico.com.  He can be followed on Twitter at @billclerico and @wepay.

The news media industry is changing. Long gone are the days when ratings and earnings weren’t required and massive staffs of old hawks were employed to create 30 minutes of perfected, unbiased fact. Here to stay are the days of digital journalists, predators (producer/editors) and one-man bands (a correspondent who can write, shoot, edit and be on camera).

Rising costs and diminishing ad revenue have forced the industry to change its model, but this doesn’t mean that the flashing sign next to the news studio is reading “no access.”

There is no question that the media industry has always been a difficult market to break into, and with the current job market, you might think it would be a bad time to try and get in. But, while the industry has been shedding many of its tenured employees, they have actually been adding less-experienced, entry-level type personnel. Plus, with less employees around to produce the same amount of airtime, more is being asked of everyone on board.

So what do you need to know to help you get your foot in the door?

First and foremost, be prepared to start with freelance work. Media companies, specifically production-based companies, are notorious for having their entry-level employees start on a temporary basis. It is partly a rite of passage and partly that financial costs have outgrown ad revenue (specifically for network news). But this shouldn’t be viewed as a total negative. Most freelance work has a specific end date; you will know if you are going to be promoted or canned. While this may seem daunting, it will give you a set schedule of promotion. Work your ass off for six months and you will be rewarded. Read the rest of this entry »

Economy plunges, grad school applications increase. This time around, business school applicants are leading the surge, which is no surprise given the carnage on Wall St.

B-school costs a ton of money and takes two years. Is it worth it?

Last Spring I saw a lecture from Frank Brown, the Dean of INSEAD.  For those of you who don’t know it, INSEAD is one of the most prestigious international business schools in the world. Promoting his new book, The Global Business Leader,  he offered some timeless guidance to prospective applicants.

Brown said that there are three possible reason to get an MBA:

1. the network: people often cite this as the single most important aspect of a b-school
2. the knowledge: the information acquired at b-school is often cited last in the order of importance
3. the credential: in many industries (consulting, for instance) there is only so far you can go without an advanced degree

A lot of people go because it’s “the next step” or, as Lee Sure pointed out, because “it’s a versatile degree.” Both of these may be true. Dean Brown said that an MBA is only worth the time and money if you need any two items on the list above. Network, knowledge, credential. Pick any two.

If only one of those perks applies to you, then you should reconsider the best use of your time and money. This sounds simplistic, but that’s the beauty of it. It’s a perfect litmus test. Think about it before you dismiss it.

I once got an email from a Kenyan prince (never mind that Kenya doesn’t have a prince) claiming that he found me through an internet search for “honest and trustworthy people”.  He wanted to pay me to use my bank account to transfer money into the US.  Offers for unemployment grants are scams, just like letters from African royalty.

The federal government does not give out grants to people who are out of work.

Aside from research and educational programs, the Federal government doesn’t typically give grants to individuals at all.  So-called “stimulus grants” are available for governments and organizations, not for downsized workers.

Capitalizing on misunderstanding about the stimulus bill, seedy Web sites are popping up all advertising “stimulus grants” or “government assistance grants.”  Some of them even managed to get “.org” status (I don’t know how). The FTC warns that these scammers have distributed computer viruses, fraudulently drained bank accounts, and stolen private information.

If you are an organization that actually qualifies for a grant, go directly to Grants.gov to make sure it’s real.  If you already got scammed, call (877) FTC-HELP.

by Lee Sure, guest author

After a few years of working and several failed attempts at getting in to med school, a friend called me telling me she applied to law school.

Her dream had been to become a doctor, to stitch up bodies, to write prescriptions, and to make her family proud. She called me to ask what my experience was like (I’m a second year law student at Georgetown). When I asked her why she applied to law school, she said it seemed like the second best way to work in the health care industry. “A law degree is so versatile,” she said.

Reasoning such as “it’s a versatile degree” or “this is the best way I can engage such-and-such a field” are the types of conclusive and generic reasoning that show law school was a fallback for her. Add mediocre LSAT scores, loads of debt (say $180,000 over three years), and an embroiled legal industry and you have front-row tickets to a boring, slow-motion train wreck. She was misguided by the idea that “more is better.”

The flaws in her reasoning aren’t confined to law school. For thousands of people each year, this short-sighted thinking overlooks the real price of getting a graduate education. Read the rest of this entry »

by Ben Deacon, guest author

Having just dusted myself off the scrap heap of unemployment last week, one would think that my new government job wouldn’t allow me the time to write a missive for TheCanned.com. It’s exactly that kind of thinking that is holding you back from landing a job in Uncle Sam’s extended family.

Today is St. Patty’s Day in Boston, a county holiday, and I spent my morning soaking at the Chinatown YMCA and listening to Annie Lennox’s Walking On Broken Glass on my iPod. These ideas came to me around minute 30 in the jacoozi.

The trick to landing a job in government is talking to people in government. Most open jobs are not advertised because there are people on the inside waiting to poach. A best practice for landing a government job is to bug the hell out of any of your friends who work in government. Call them every other day and say things like “I can’t believe that earmark is going to make it through committee. That garbage wouldn’t fly on my watch.” Government people love to hang out with each other so invite yourself out for a night of PBR’s. In short, become the insider.

Jobs can seemingly open up at random so be persistent in reaching out. In Massachusetts, the ascension of a new Speaker of the House meant that all chairmanships were shuffled. Staffs expanded and contracted across the government in one week. To the layman this might come as a surprise, but for people paying attention it was a fantastic opportunity to get a foot in the door. Read the rest of this entry »