You've Got No Job!

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21

You older folks built the infrastructure to make my generation so shitty. You brought the technology and allowed the corporate fashion and media trash into our lives at  young age. We also grew up at the most prosperous time in human history and we don't know how else the world works.
That being said, the few of us that are hard-working, and want to make a difference can't do it because you folks are holding onto your jobs and can't offer much beyond unpaid internships for entry-level work.

I'm fortunate enough to have a full-time job that pays a decent wage, but there is no career path to pursue beyond that. The prosperous careers right now all have a lifespan. What will happen to all the nurses when Medicare and Medicaid run dry? What will happen to all the worthless tech jobs when the world realizes all the shit they make is useless garbage? 

I almost enlisted in the Air Force a couple years ago. Did you know enlisting in the military is competitive now? I qualified for every job in the Air Force, but opted out because I thought an 8-year commitment was too risky. 

Our entire economy in the USA is based on digging holes and filling them back in. Our natural resources are either gone or are too expensive to extract, therefore we can do nothing but offer services to ourselves and the rest of the world. 

Housing prices are outrageous. The cost of having a family is outrageous. The cost of living single is outrageous. The cost of education is outrageous.

Everything is different now for us. Primitive and pre-industrial skills are really hard to acquire now, but that is where our future lies, and it sucks.

 

 

22

I have had my own business for almost 10 years, and maybe I have some useful input.
Don't have employees. Have contractors and pay them well (to make up for the extra taxes they will owe). You won't have to manage any of their taxes, your filing requirements related to them are limited to annual 1099s, and you won't take on the financial and paperwork burden of a full-time employee (and the corresponding stress of consistently having to find things for them to do). There are some important caveats with this approach, like you can't control your contractor's work hours or how they go about their work, but that fits in with another item essential (I think) to small business success – learning how to delegate.

If you can avoid it, don't have a physical workspace. Have a "virtual company." Saves money, saves time, people are more productive and if they are parents of younger children (as most of my colleagues are) they will love this.

Ideally, start a business that requires a limited up-front capital investment, or where the capital investment (computers, tools, specific types of supplies, etc) is something that would be valuable for you to make, regardless. 

Don't be afraid to have to train your workers. If someone has initiative and potential, there's really no reason to resent becoming a teacher/guide in terms of the hands-on skills. Corporate and other jobs used to provide employees with this. Now, more often than not, they avoid it. I think we are all worse off for this, and too often our professional relationships cease to be meaningful because they've lost the expert/apprentice component they used to have.

I realize the points above are a bit ahead of the case for people who have not yet begun, so let me say that I could not agree more with the need to diversify revenue streams in this day and age. People used to ask me if I felt insecure being a freelancer/small business owner and I used to tell them "No, it's more secure to have 20 clients than 1 employer." People don't ask me so much about this anymore. 

Having your own business is not for everyone. Your paperwork burden increases in general, and things are nowhere near as predictable (at least for a while). The barrier between home:work can become non-existent at times (although many "jobs" are this way too). You have to learn how to market yourself. You may have to learn how to become more self-directed in your work. But along the way you are likely to redefine what "work" means to you, and there are those wonderful moments when it sinks in that no one is telling you what to do any longer, no abuse is being hurtled your way that you have no control over, and no one is telling you to work all weekend (though you may still choose to work all weekend). 

 

23

I hear what you're sayin, and agree.   Xer's got a bad deal (worse in some ways)…millennials got the worst in others - at least the ones (like single digit %) presumably like you who push themselves rather than be pushed.  The rest of them are gonna look to mommy and daddy till the bitter end.  Good luck. 

24

I agree with you. My generation isn't very encouraging. I went to school to study ecology and I know about systematic thinking more than most. I've tried to engage folks my age in these topics and it is just as challenging as trying to engage a baby boomer. Some older millennials recognize the problems, but are apathetic or fail to recognize how these problem directly affect their lives. For me it was connecting the financial problems to natural resources that connected me to the urgency of the story. A timeline is important. 
Peak oil and climate issues do not mean much when you recognize them as a steady transition, but when you recognize them as demanding lifestyle change within a short period of time with resourced struggles, financial apocalypse, etc. Things become more clear,

25

Within a 5 mile radius of the small town I live in with a population of 20,000+, here's what I've observed in the past year.  On one side of town, an interior decorating firm closed, a good sized local trucking company closed, and two restaurants that have been in business for decades have closed.  A furniture store that was in business over 100 years closed.  In town, the hospital system was bought out by a large national healthcare corporation that promised no lay-offs, no cuts in salary, and no cuts in benefits.  Instead, they have laid off many, cut salaries, and cut benefits.  On the other side of town, a large national retail outlet is closing.  Another regional retail outlet closed.  A liquor store closed (that one is a sign of REAL problems).  Another family restaurant in business for decades closed.  The two local malls are like ghost towns.  The car dealers have swollen inventories that aren't moving.  A power plant is up for sale.  A mine some distance removed from the town, a very large local employer, may be closing within the year.  Obamacare has reeked havoc in small businesses with many workers having their hours cut and businesses suffering under the costs of increased premiums for their workers.  A neighbor just sold his business that was faltering.  He was very fortunate to find a buyer.  My sense is that the new owners will go under in a year or two.  Other friends with small businesses are struggling to get by.  Commercial real estate is under occupied as evidenced by For Rent signs all over town due to new business start-ups becoming progressively more rare.  A local credit counseling agency closed.  Many small businesses are cannibalizing one another because of insufficient discretionary income to supply them all with sufficient customers.  The latest is that a surgeon closing down his office.  Other medical doctors have sold out to the large corporate entity and become employees rather than small business entities, often under duress from the large healthcare corporation.  A young chiropractor can't find work.  Young people are having difficulty finding employment that offers any opportunity at upward mobility.  More and more individuals are going on Social Security disability as the new form of unemployment.  And I'm sure there's a lot more I'm not even aware of.  The area still looks relatively prosperous to the casual observer but it's like a house with carpenter ants.  All looks well until structural collapse ensues.
       

26
Everything is different now for us. Primitive and pre-industrial skills are really hard to acquire now, but that is where our future lies, and it sucks.
    Careful now WT.  Everything will be different for all of us- regardless of generation- by-and-by.  Nobody knows exactly what the future will bring.  Certainly not for any given individual.  OOG states there's some good construction jobs available in Texas.....Aloha, Steve.
27

Wow…Bleak picture you see. Just the opposite in South Central Texas. We have growth, new business startups, a fairly vibrant local economy. I have to wonder first what state you are in? (Geographical not Mental) And if your town is truly representative of the larger area or is there some local explanation?
Thanks for the detailed view…it is quite disturbing.

28

After the cheap money ends, each and every currently strong towns, cities, and states will rot from the inside out.  It's incredibly strong here too, for now.  Seriously, what economic heroin can push this inflationary based high higher?

29

Hi Oliveoilguy,
As I said, on the surface, it looks pretty good here too.  Not great, but good.  We're in the upper Midwest.  We have an award winning town with many new upgrades in recreational facilities, buildings, and other infrastructure.  There's also new private construction going on, and, God bless 'em, a few new businesses starting up.  One of the new constructions is a large (for the area) theater/entertainment complex with hotel and other amenities.  Folks with business savvy are asking themselves though, who is going to patronize these new businesses when the pre-existing ones are just getting by.  My sense with a number of the new business owners is that they're first timers, overly optimistic, don't realize what is occurring and what the risks are, and will be belly up in the not too distant future.   But overall, the growth has slowed and the cracks are beginning to appear more and more.  Money is definitely tighter.  You can see it in falling charitable contributions and the growing size and needs of the poor and working classes and you can hear it in how people talk.  People are keeping a brave and cheery front but privately, they're concerned.  If they're not concerned, they're too naive to know they should be.  When municipal, county, and state government employers begin to pull back (which you can see the first signs of), the decline will likely accelerate.
A friend who is a boilermaker and makes a very good income travels all around the country but notes work is down from what it was (in the past, he could work as many hours as he could physically handle).  He talks about idle rail cars, closed steel mills, closed factories, empty warehouses, etc.  All the things that are indicators of the health of the engine of growth of the country, according to him, are trending downward.  This is mostly in the Rust Belt and Plains States but he also goes to the South and both Coasts which seem to be doing better than the Heartland. 
BTW, if young folks are looking for careers, boilermakers seem to do very well.  An accountant friend told me of a boilermaker client who is collecting a $100K/year pension from his union alone, not including savings, investments, and social security.  Hard and often dangerous and potentially unhealthy work but the pay is good and the demand is still there.  Good welders and electricians are being sought out as well.  
I'm not surprised things are looking better in Texas.  Except for the bad years in Houston, whenever I've visited Texas, things seemed to be bustling and healthy economically.  I think Texans, in general, have a more can do, grab the bull by the horns attitude.  Plus, they don't seem to knuckle under to the federal government as much.  There is a stronger, more independent spirit, something that is gradually disappearing in much of the country as despair spreads and the dependency mentality grows. 
 

30

As I have written elsewhere, it's clear that wages are no longer an adequate method of distribution of an economy's surplus, and a different arrangement will be made whether we like it or not.  The future does not have to be bleak by any means, unless we insist on clinging to failed models until they collapse.
It seems that local economies based on either energy or various credit/asset bubbles are doing well and everyone else is not. But given that bubbles in real estate, tech stocks, tourism etc. will all collapse along with the primary driver of all these bubbles, credit money, those are not quite as solid as many seem to believe.

As Peter Drucker observed decades ago, enterprises don't have profits, they only have expenses. The key to surviving/prospering is lowering expenses to the absolute minimum, and that means eliminating the costly overhead of labor wherever possible.  Many of us who once employed dozens of people have concluded the only way to survive, financially and psychologically, is to never hire another employee, ever, under any circumstance. We are all one-person shops that contract out whatever help we need to other independents. It's a flexible ecology and as a result it is resilient, adaptable and secure, as noted above by other self-employed people.

The more real skills a person can bring to bear on problems, the more value they can create and the greater their opportunities to contribute.  It sounds overly simple but it boils down to that.

31

Wow, exomatosis, your town in the upper Midwest sounds where I lived in the 70s. Long Island, NY was depressed like that after all the defense contractors closed (Grumman and all those who supplied Grumman). Hard times.
Where I live, in SC near the state capitol (population 129K ), in or near my town (population 19K) they just built five new chain restaurants, three new gas station/convenience stores, a new headquarters for a major insurer, two new elementary schools, a new high school, and added onto the main mall.

Here we have a decent economy, but I would not call it robust because some of the drivers are more fragile than others. My local area is being sustained primarily by money from large military bases, retirees, and higher education. However, and not federally funded and therefore actually sustainable, SC in general has resources: We have a huge agricultural base: forestry/lumber, and food-producing agriculture (poultry and eggs are the biggies, followed by turkey, beef. Those seem to be trending away from factory farming at a good rate) and - well, read the list at this link. At least we grow a lot of food here; fruits and vegetables and nuts and honey. Lots of manufacturing, but not all of what we make will be useful after a crash and too much of it is based on petroleum: chemicals are our biggest product mostly used in textiles. Maybe we can become the land of cotton again. Oh, and some mining.

One thing we have is water. Oliveoilguy, how's the water situation in your part of TX?

When my son in FL could not find work, he moved here. I've met workers who moved here from Detroit. There seems to be a migration to places like SC & TX where there is work.

32

Some nice things for me working for a small consulting firm include that each employee is not treated as expendable.  We're small enough to all know each other and work more efficiently without unwieldy layers of management, but with enough diverse and professional staff to compete with the big national firms.

33

" My starting pay is $14-$18 and you can get to the mid-20's"Well that probably not much more than they can collect from unemployment or wealthfare entitlements. A lot of workers at the low end can do better by simply working for a short period, enough to start re-collecting unemployment again. They continue to repeat this cycle as long as states continue to  offer generous unemployment benefits. Why would they want to work full time, year round when they can get a six month or more paid vacation using unemployment benefits? Its not that they lightweights, they just have a better deal than working for you. You best option would be to seek out retirees looking for part time work to suppliment thier income, or people 40+ years that have a mortgage or other obligations that requires them to work. You will never find a reliable 20 something willing to work for $14-$18/hr. 
As a small business owner for well over a decade, I am closing up shop this year. With rising taxes, ridiculous regulations, retroactive fees imposed by my state, I've giving up. There is no point working 60+ hours a week when 60% or more of my income pays fed, state and local taxes. 
I see the economy imploding this year. I think it will be a lot harder to make a buck by the second half of the year as Obamacare starts doing real economic damage. Perhaps if you located in a region tied to the shale oil boom you'll do OK for 2014.

34

"Just the opposite in South Central Texas. We have growth, new business startups,"Thats likely because of the oil boom (shale/LTO), which is going to peak in the next year or two. The biggest issue I see for TX is water and a large number of people moving from Calfiornia and other big debt states to TX. I have a feeling that TX demographics are going to change dramatically, and not for the better. Sooner or later the shale/LTO is going to switch from a boom to a bust, but there will be a lot more people living in TX and probably a lack of long term employment opporunties for them after the shale oil goes bust.
Here in the northeast, the economy has not improved since 2010 and is starting to slip back into recession as states in the Northeast have increased taxes and business are leaving or downsizing.
 
 

35

…when you have zero chances to get back in the labor markets - at a reward more than rent, food expenses, other necessities?
I am disabled, living in western Europe. I simply can not work a full week. I get disability  Off late I have been finding that even when I send an inquiry for unpaid volunteer work they aren't interested. I do not have the skills to start a business, and even if I had, I'd lose every penny I'd make relative to my disability. There is zero incentive for me to work … in fact there is considerable disincentive. 

To make more money with "a business" than my N disability I'd have to make about 2N worth of money since I'd lose 0.3N worth of subsidies on top of my disability and a third in taxes. In other words, completely impossible. People who have their own companies can't even find contracts right now. At my age, with my resumee, with my background there's massive competition. 

What are my best options? Join some radical extremist left wing populist party and prepare to storm the barricades and murder the rich a few years from now? Because that's what will happen, eventually. 
I am not the only person in this situation. There are at least a million in my country. That's more than 5% of the population, not even counting pensioners. Most these people have simply given up and crawled away in their welfare, games, TV, alcohol and ignore the world.
If all these people get cut off, sooner or later, there will be hell to pay.

36

Wendy said "One thing we have is water. Oliveoilguy, how's the water situation in your part of TX?"
So far water is holding out. In San Antonio if there is prolonged drought and the aquifer level drops, they  start restrictions.  The water in our area is very hard, so many people in our community have installed rain catchment systems. We use well water for our livestock and rain water for domestic use.

One ranch nearby pumps 18,000 gpd to fill a recreational lake. That seems wrong to me since much of it evaporates.

Also I'm concerned about the impact of the shale oil boom, but not concerned enough to stop driving.l 

37
Lambert here: “Twenty years of schoolin’ and they put you on the day shift.” –Bob Dylan. Of course, that’s oldthink. Back in the day, they had shifts. Real wages have been flat for thirty years. Seriously, are we to believe that economists and the elites they service just got around to noticing? Pas si bête.
From The Nikked Capatilist.

And

At the same time the share of employment at the upper and lower ends of the occupational skill distribution has increased substantially
My interpretation: Society is stratifying. However:

No-one is immune to automation. Did you think that you might get a job as a night watchman? Maybe not. We've got that covered too.

Perhaps your job is at the high end. Like say having to make split second decisions on the Stock market? Eer.  .  .  . Nope.

My belief in my model that humans are becoming irrelevant to the economy is becoming stronger.

38

Hi Adam,
I've run a successful consulting business for well over a decade. I had worked for several companies in the past and I ended up giving up as I was unsuccessfuly in getting these business to adapt to the changing economy. Most of the managers and business owners didn't want to change until disaster hit, which forced them to make drastic cuts or revert into crisis mode to rectify the situation. As Employee, I could see the train wreck coming, and continued to jump ship before the wreck hit them. After several iterations I gave up trying  and started my own business. I end up taking over the clients from many of my previous employers that could not provide the quality of services or at a competitive cost (After they lost them or they went out business). Switching from a employee to an self-employed business owner, I more than doubled my salariy with in 18 months.
However that said, times are changing. Its becoming more difficult to run a small profitable business as the gov't is piling on the regulations, and taxes. I am closing up shop this year as i've become worn out and i am not willing to submit 60% of my pay for taxes. 
My advice if you plan on striking it out on your own:

  1. Speak with an accountant that specializes in small businesses. They will explain most of the important things you need to be concerned about: Corp Registration, Taxes, which type of corp you should use (ie C-Corp, LLC, etc). Getting Business liability insurance, etc. Either they will have an in-house attorney to file the Corp Registration or recommend you a business attorney to work with.
  2. Get all of your corporate registration work completed before you leave your current employer. It can take six or more weeks before the Fed and states will issue a tax ID. Without a TaxID you make find it difficult to get Business to Business work as companies can get fined big $$$ if you don't have a TaxID and you didn't pay your taxes in full.
  3. Try to get a some work set up before you leave and besure to have four to six months of living expenses saved up. When you first start up you may not have a signifcant number of "paying" clients to offset your living expenses. It may take you six months or more to establish enough clients. This depends on your business model and what types of services or products your offering.
  4. Avoid all overhead. Do not stock any inventory, run out of your home office. Do no hire workers or contractors until you have enough work to justify a full time position. You don't want to take on unnecessary risks or overhead. Rememeber HP and Apple started out of a garage in someones home. There is no reason to rent an office.
  5. Avoid retail customers!, and deal only with other businesses. Retail customers are a pain and are more likely to stiff you (ie not paying an invoice, getitng you to do a lot of presales work and switching to anther vendor). Before comitting to a project with a business, do a background check on them to see if they stiff vendors or are late paying invoices (Google, D&B ,etc) are your friends. Be sure to alway put the payment terms on your invoices with a 5% to 10% penality for invoices beyond 30 to 45 days past due. You may wish to work with a business attorney to create a business contract template to avoid getting stiffed. Agrreements should be signed and dated by both your client (either the manager or owner, not a low level employee) and yourself. The Agreeement should state the work that is being performed, the rate your charging and any expenses you need to charge back (travel, equipment, etc). The signed agreement is your only recourse if there is a dispute. For in-state work, note on the agreement that you will be including the current statelocal sales taxes, for out of state work, state the business owner is responsible for paying the statelocal taxes (unless you obligated by law to collect it). 
  6. Don't use Quickbooks. Its sucks and they try to nickel and dime you to death. I managed to just use customized excel spreadsheets.
  7. keep a finaling cabinet or file box with all of your invoices, recipients and other business related paperwork. Organize expenses or other periodic paperwork in monthly folders Prepare monthly expense reports (ie internet, phone, travel, postage, office supplies, equipment). At the end of the year you will need to create a categroized yearly expense report for your corp tax filing. Ask your account to give you a list or sample form.
  8. Since FedState tax payments are electronic, set up a separate business checking account for electronic payments. Should the FedState Revenue offices get hacked they will likely try to drain any cash in the account. Put only the funds needed to cover the taxes due, plus a couple of hundred dollars. use a seperate account for business operations and non-electronic payments. 
  9. If you need health insurance, or plan on offering for your employees, then use a C-Corp instead an LLC since you can deduce it as an expense. To my knowledge health insurance is not deductable with an LLC (maybe that has changed).
  10. Expect to file quarterly tax returns. These aren't too difficult to do. For the first 5 or 6 years I used to file them myself, but later I got too busy (and lazy) and choose to have my account take care of it. To make it easy for them, I still prepare monthly expense reports and a sheet with all of my invoices with sales taxes and expense reimbursments listed on a spreadsheet. if you have all of the documents and sheets readily available they will not charge you much to handing the quarterly returns for you.
  11. Avoid fix costs projects at all costs! Use a time and material form and provide a range. ie this project will require between 40 and 60 hours of work to complete. The lower number should be the maximum time you expect to complete the job. Customers have a habit of not providing all of the details need to accurately estimate a project. Be prepared for designimplementation changes during thr project. If any of these deviations will take considerable more time, notify the business and document the adjusted changes to reflect the additional cost and project results. You don't want to get stiffed working 200 hours on a project originallly quoted for 100 hours because of customer changes requested half-way through implementation.
  12. Avoid needy, less profitable customers. From time to time, you will run into customers that penny pincher and get you to under-budget the cost, or constantly change the scope of the project forcing you to commit more time than you expect. This can be serious problem if you are supporting multiple customers, and are unable start work at another client you previously scheduled. At a certain point, they are not worth the extra time and expense needed to satify them. Your time is better spent focusing on other customers or finding new customers. 
  13. Stand by your work. If you make a error, fix it at your expense. Its better in the long term to provide quality work and get repeat customers than it is to spend many unpaid hours finding new customers. If your work is top notch, you may not need to waste any time with sales,  as word of mouth will direct new customers too you. (not always, but it does happen). Choose an implementation that has the least risk, Avoid experimenting with something that your completely unfamiliar with, as your likely to make mistakes and under-estimate the time to implement. You also want your project to function as intended and not have glitches that reduce stability or reliablity (which usually results in unhappy customers).
  14. Document your work and have the customer sign a project completion document that states all of the projects goals, changes, work performed and costs. This will help avoid invoicing disputes, especially when the scope of the project had changed.
    Hope that helps!
     
39
  1. Building loyalty is high on their agenda.
  2. The Trades are highly valued.
They get an hour for lunch. Mothers stay at home with the result that the population is well adjusted.

 

40

Good info Tec Guy…even for a 30 yr. business owner. I appreciate the detail. And totally agree about dumping bad customers. I had a Lady and her husband approach me on a home and barn and ranch infrastructure project. I didn't get a "warm fuzzy" but agreed to do the barn and some other work. And thought that if that went well I would do the house. Without going into gory detail,  suffice it to say that she was impossible to please. She offended 4 of my subcontractors who made it clear they would never work on her projects again. So…I walked away from a 1.5 million dollar house not having anything of that size to replace it.
But…Good decisions usually breed good results, and shortly thereafter I got a large home with some of the sweetest, kindest clients I have ever met. Just knowing them has been a blessing and made this last half year very pleasant.

Chasing money is not always the top priority when trying to grow a successful business. Focus on good work and integrity and the money will come.