Career Strategy for the 2001 Economy

Question: I just got laid off. I'm debating whether to aim for a very low salary just to get a job or to get some professional training. Which do you recommend?

This is the best time to take the training. If you can sustain yourself financially, go for a professional training which will really improve your employability. This is because the employment picture is not likely to improve until the beginning of 2003. There are several reasons for this probable delay in economic recovery:

1) Most companies invested heavily in overhauling their system to avoid Y2K-related disasters.  Almost everything was optimized at great cost. Processes were reviewed and improved. Computer systems were replaced with new ones. Almost anything with electronics were updated. It would take 2-4 years before these investments would become obsolete.

2) The Internet economy which enriched millions of Americans through overvalued stocks is certainly not coming back. The Internet technology continues to improve but most Internet companies have permanently lost the power to seduce Americans into investing into websites which have no real product or services. The ones gaining from the Internet now are the companies who already knew how to make money before the frenzy for Internet stocks began.

3) The buying power of Americans will not improve in the next 12 months, even if the Federal Reserve interest rate goes down to zero. There is no formula to recover money invested in now dead companies. The best the Federal Reserve interest reduction can do is keep the hope of American consumers alive.

4) Three years after Y2K, most equipment and systems in corporate America will need replacement. Also, processes and procedures will need to be changed because they have become obsolete. This factor, more than the interest rate, will presure businesses to purchase and invest again. Because most Y2K-induced purchases and changes were instituted in 1999 or earlier, demand for skilled workers will inevitably pick up in the 2002-2003 period.

5) The years 1995-1999 were characterized by mega-mergers and mega-acquisitions. These activities generated redundancies which are still being sorted out. The merged companies postponed laying off thousands of redundant employees for fear of Y2K and in anticipation of greater economic expansion.  The Y2K threat ended but it was followed by further shrinking of economies worldwide. In short, most businesses are over-invested but revenues do not come. This means massive layoff of employees will likely continue for some time. 

 If you are in Texas, there is one way you could consider yourself lucky for losing job at this time. The Texas Workforce Commission (TWC) will pay your unemployment benefits as well as your training expenses. The training programs available in their list are very good; some are so expensive even fully employed workers can hardly afford them. Yet, because you are unemployed, not only do you receive unemployment checks, you get to train for free.

Ray Colorado
PinoyTexas.com
Copyright August 24, 2001