Thursday, July 14, 2011

The Economy: A Layman's Perspective

While the news media, politicians, and the President are telling us the economy is improving, I'm having a difficult time seeing it from where I am sitting in the great state of Texas. Allow me to explain from my position as an untrained economist.

Every week someone from my friends list on Facebook announces a job loss. Sometimes, the spouse is able to pick up extra hours and make up the difference. Other times, they have a trade that allows them to quickly find a new job. But, many remain out of work. It has almost become an unspoken rule that if you run across a job (that you will not be applying for) that you share it with your friends on Facebook. Unfortunately, the job posts are as rare as the job loss announcements are common.

With each out of work person, the family must cut the budget to meet the new income level. Contrary to the news media's analysis, this doesn't make for a recovering economy. How do I know this? I am by no means a trained economist. But, experience can be a great teacher.

We learned yesterday that my husband lost one of his jobs. Yes, he works more than one. When you have a special needs child, the medical bills are insurmountable. I'm not at liberty to go into the amount of bills my son accumulates each year but to give you a hint he is three years old and just had his fourth major surgery. He will have his fifth surgery by year's end.

With the loss of one job means the loss of a third of our income. We must cut our household budget by one third. We were not living extravagantly but definitely did not have a tight budget. With the loss of salary, there will be no more eating out, no more movies, no more lattes, no books, no crafting supplies, no more driving that is not absolutely necessary, no more cookies and ice cream in the grocery cart, and I will return to the use of coupons to save every penny possible. My trusted travel companion, my SUV, will remain parked in the driveway. We can't afford to fill the tank with today's gas prices approaching $4 a gallon. Instead, my husband and I will share the economy car.

Now, here's your challenge: How many retailers will be hit by our job loss? How much money will no longer be added to the local economy? And to add to your numbers, my husband wasn't the only one laid off his job. There were others. So, add their income, budget cuts, and the retailers affected to the list.

We know numerous teachers have lost their jobs due to school districts cutting their budgets. We also know that Blockbuster (a distributor is in our area) laid off a lot of employees recently. We were enjoying Chili's burgers recently when half the restaurant was filled with employees who lost their jobs that very day. They were "celebrating" life one last time before going home to cut their budgets to their new income level. How many retailers were affected by the jobs lost at Blockbuster alone?

Despite the push to blame the business owner, large or small, for not hiring workers and for laying them off. The true blame should be placed on government as a whole. Budget talks are going on right now on Capital Hill and to no avail. My husband and I cut all non-essentials from our budgets when income drops. Capital Hill must do the same. I can name numerous budget items in the city that employs my husband that should have been cut from the budget as non-essential items. I mean, really, do we need a brand new bridge that runs parallel to an existing bridge with no problems whatsoever. According to the city, we do. Why? Because the old bridge isn't pretty and the new one will be. I could go on and on just about this one city. In the end, they cut my husband's salary and all the other city employees' salaries by five percent and gave them unpaid days off. I rather doubt one bridge will add as much stimulus to the economy as thousands of employees in the city.

I'm sure there are many more examples nationwide and on Capital Hill. When government cuts the non-essentials out of their budgets, then maybe we can add the non-essentials back into our budget thus boosting the economy.

1 comment:

Jennie said...

I'm so sorry to hear this news Cynda. I hope things turn around soon. You are right. When you have neat little kiddos like we do, every penny counts.