True Cost of Unemployment
What is unemployment really costing you?
Besides the loss of income, most people are probably not aware that the longer they are unemployed the less marketable they become – and the vast majority of people who are unemployed for over a year will end up taking a pay cut when they do find their new job.
In today’s ecomomy the cycle of poverty begins when a struggling family encounters a small, extra expense for which they just couldn't prepare - an unxpected car repair or an unplanned illness that results in an extra trip to the doctor, for instance.
But when a family loses its income because the primary breadwinner can't afford the simple medical care, car repair or other expense that would've kept him or her gainfully employed, that family has no choice but to turn to the state for support.
We all know that when a person becomes newly unemployed and must depend on the unemployment or public welfare system to survive, that person loses a measure of dignity. But unemployment also takes a devastating economic toll, both on the newly unemployed person's family and on the state that family calls “home”.
The cost of unemployment can be hard to quantify. From your sense of self respect to your bank balance; from your state of your health to your relationships...
Example:
From DENVER, CO -- What a job search could possibly cost an unemployed person looking to make a:
- $19k for a $50K salary
- $77K for a $100K salary
WHAT? Didn't expect that? Let's explain.
First, this is obviously not an out-of-pocket cost, but it is wages and money you can not get back. The general rule of thumb for finding and starting a new job is this - it will take 1 month for every $10K in salary (5 months for $50K job, 10 months for $100K job, etc). Here is what a prolonged job search could cost in lost wages. $50K pay = $19K lost ($960 per week over 5 months). $75K pay = $43K lost ($1,440 per week over 7 to 8 months). $100K pay = $77K lost ($1,920 per week over 10 months).
Again, these numbers represent lost wages. But, even as wages and paychecks stop coming in, the expenses of life do not. People still have monthly expenses to keep up with. Two closing thoughts: 1) If you find yourself unemployed, quickly invest the time, effort, and job search tools needed to shorten the job search and control lost wages (you can't get it back). 2) If you aren't prepared for unexpected job loss, you should promise yourself to make that investment in your future. Job Search Readiness + Opportunity = Job Search Success.
Courtesy of The Career News December 1, 2008 Vol. 8, Issue 48
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