UK Employment Situation “Alarming”
I realise that I’ve banged on about emergency funds quite a bit recently, but I make no apology for it, as a disturbing news release by the ILO (International Labour Organisation) last week shouts from the rooftops that the the current employment situation is “alarming” and unlikely to improve any time soon.
40% Out of Work for >1 Year
Traditional wisdom surrounding emergency funds states you should have somewhere between 3-6 months of expenses saved up. Worryingly, the ILO found that more than 40% of jobseekers in advanced economies had been without work for over a year, indicating that it was taking much longer for people to find jobs.
When you consider the Eurozone statistics – Spain’s unemployment rate is almost tipping 25%, France has had its 11th consecutive unemployment rise in as many months, and the UK is expected to top almost 9% over the summer period – things are bleak, particularly with forecasters from Centre for Economics and Business Research (CEBR) today warning it is likely to keep rising for the next 5 years.
Forced Retirement at 65
When you couple this with a recent supreme court ruling that employers can force retirement at 65, and UK company insolvencies are back on the rise again, there has never been a more important period in our recent history to have as much cash stashed as possible.
Public Sector Cuts Backfiring
David Cameron and the coalition government is slashing the public sector, with 20% cuts in almost every department. But it’s ok, because “the private sector will pick up the slack”, he said. Alarming statistics from Markit shows the eurozone composite purchasing managers’ index (PMI) fell to 46.7 in April from March’s 49.2 however, a figure described by Howard Archer from IHS Global Insight as “truly dire” as that indicates the private sector is actually sharply contracting, and not expanding to ‘take up the slack’ in the slightest.
Oh, and in case you missed it, just to add the final insult – the UK is back in recession, too.
Unfortunately in these turbulent times there is unlikely to be any such thing as a ‘safe job’. Certainly some will be safer than others but gone are the days of jobs for life.
Do More, With Less
Companies are demanding more of their employees, and those who are unwilling to give are readily shown the door under the guise of ‘performance management’. After all, there isn’t exactly a shortage of people looking for work.
At least one company I know of takes the view “be grateful you have a job. Now accept this re-trebling of your workload or, you know where the door is.”
I can see their point. Companies need to do more with less. They need to streamline and make efficiencies, else they may not exist this time next year. But how far is too far when it comes to businesses taking their pound of flesh from their employees?
Bottom line: Your emergency fund probably isn’t big enough. Start growing yours today, for a safer tomorrow!