Lately there seems to be a sense that perhaps the worst of the recession is behind us. Consumer sentiment is up and the jobless rate is falling in many places. People are relaxing a bit and thinking that we might soon be back to business as usual. They’re heading out to the malls and taking vacations again. I don’t want to be a gloom and doomer, but I would advise you to beware of the second wave.
Many people who recently heaved a sigh of relief that they had made it through the recession unscathed are now losing their jobs. Many who thought that their job was recession-proof are finding out otherwise. The problem is that while many employers are beginning to recover, many are just now starting to feel (or admit) the effects of the last couple of years. Take governments, for example. Despite the fact that the overall economy might be improving, many governments are still losing money. Tax revenues have been down for a couple of years and are still below “normal.” Any cushion of money that they had has been burned through. As budgets are set for the coming year, many are cutting even more jobs and closing down more services. Governments are having to make tough choices because all of the easy cuts have already been made. People like policemen, firefighters, teachers, nurses in public clinics, and other “essential” personnel whose jobs seemed recession-proof are finding that they are, indeed, expendable. Or, if not expendable, subject to pay cuts and freezes.
Many private companies that have tried to hold out through the recession without layoffs or cutbacks are finding that they must now make some cuts. Profits have not recovered sufficiently to keep going at present levels and any extra cash is likely gone. Money might have been mishandled or misspent during the worst of the recession, leaving little for current expenses. This means that some layoffs might yet be coming. Even those that had layoffs earlier in the recession may find that things are not recovering quickly enough to prevent further cuts. Certainly not all companies are about to lay off employees, but there are many who are just now making adjustments to their overhead. If you’re already out of work, don’t bet on jobs suddenly becoming easier to find, either. Since many companies are still trying to stay afloat they don’t have much extra money to hire new employees.
Even if you’re lucky enough to keep your job, you may find that you lose money saving services in your area such as libraries, medical clinics, before and after school programs, or recreation opportunities. You may also lose the wide selection of retailers in your area that makes cost comparison and sale shopping easy. As the recession drags on, more retailers have to shut their doors. The many things you take for granted that help you save money on a daily basis might not be there for long.
This isn’t to say that you should live in total fear of a job loss or that all of your precious services are about to be cut. I’m only trying to point out that I don’t think we can relax back into our wild-spending ways just yet. While you might be able to begin to enjoy the high life again to an extent, stay vigilant and make sure you have an emergency fund in place and a plan for what you will do if you lose your job. Despite the fact that some things are improving in our economy, there are still some areas that are struggling and more cuts to be made. The people most likely to be affected by this second wave are those who thought they were the safest. So don’t get complacent and think that if nothing bad has happened to you yet that you’ve survived the great recession. There are still some adjustments to be made and you should stay prepared for the worst.