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The Terrifying Reality of Long-Term Unemployment

theatlantic.com

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Re: The Terrifying Reality of Long-Term Unemployment

#231

Post by kevinskii »

srdev wrote: post #171
icelancer wrote: post #94

Earlier quoted context omitted.

>They jump to the conclusion: "well if nobody else wants him, why should I?" Having been in charge of hiring, this is way, way more true than it is false. It is not irrational at all.

Do you have statistics on how often you've hired long-term out-of-work people and the frequency of said people to be sub-par employees?

For what little it's worth: I can think of 6 colleagues who have been, or are currently, long-term unemployed. I personally wouldn't have hire any of them, had it been my decision. I'm glad it wasn't. Two of them were among our best hires ever. The other four didn't work out so well.

Still, that's quite a high "hidden gem" rate.

Re: The Terrifying Reality of Long-Term Unemployment

#232

Post by jngreenlee »

nilkn wrote: post #169
enraged_camel wrote: post #127

Earlier quoted context omitted.

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

> Instead of having that money tied down on a house, people are much better investing in the stock market, which has, over the past 100 years, gone up by 7% annually. Just to be clear, that 7% is after inflation. The historical performance of the stock market is closer to 10-11% pre-inflation. > The only time a house makes sense is when raising kids. Retirement is of course another scenario where it makes sense. Mobi…

"Just to be clear, that 7% is after inflation. The historical performance of the stock market is closer to 10-11% pre-inflation."

Can you link to something backing this claim up? I was thinking the wise/old 7% saying is in nominal, not real, dollars.

Re: The Terrifying Reality of Long-Term Unemployment

#233

Post by vorg »

cletus wrote: post #84

This doesn't surprise me at all. One thing I've come to learn in life is the importance of social proof. Social proof takes many form. It's why MIT and Stanford CS grads have tech companies come to their campuses and throw money at them (these institutions don't have a monopoly on good engineers). It's why if you have Google/Facebook/Twitter on your CV you are pretty much guaranteed a job. It's why academic staff who…

> I would absolutely without a second's doubt invent fictitious employment and get a friend to back up any reference check and I wouldn't feel the least bit bad about it.

There's many managers who'll employ you if they suspect it's a lie so they'll have something against you if they want to get rid of you quickly later on. So the trick is to make up a lie that'll fool the HR filters but not the sociopath managers who'll employ you to be their bitch.

Re: The Terrifying Reality of Long-Term Unemployment

#234

Post by scarecrowbob »

mgkimsal wrote: post #217
nilkn wrote: post #195

Earlier quoted context omitted.

Indeed, if I could find a very stable, long-term remote development job paying $80k-100k (which is quite a bit lower than the going rates in NYC and SV), I'd seriously consider moving to a small town and just buying a home for $100k. Pay it off completely in a few years and live a really, really comfortable life afterwards. I'm just starting my career, but one of my big goals is to achieve the above either through a…

The going rates in NYC/SF also have going rates for living expenses. A single person might not mind having a small apartment or sharing with someone - people with families or other priorities can't live like that. It doesn't have to be telecommute - mid-senior developers can get jobs making $70-$80k in many major areas around the US (Minneapolis, Raleigh, Atlanta, Nashville, are just some I know of off the top of my…

I second your post here-- I am currently idled through the end of summer by choice (we're moving and then traveling), but it's not a big deal-- I live in the sticks, but I do drive into Austin, TX pretty frequently. There are indeed a lot of opportunities, but you do have to focus on business development as part of what you're doing; while I don't have a lot of specific offers on my plate for the fall, I'm not worried about finding fun, interesting development projects.

Re: The Terrifying Reality of Long-Term Unemployment

#235

Post by eli_gottlieb »

enraged_camel wrote: post #132
eli_gottlieb wrote: post #129

Earlier quoted context omitted.

A house is a very useful durable good. Like automobiles and refrigerators.

It's funny you mention automobiles, because nobody buys automobiles as a means of investment (since they lose a ton of value quickly). As a useful durable good, sure houses have value, but renting accomplishes the same purpose (of giving you a place to live).

I wasn't being sarcastic. That was my point: houses are a durable good, which means they're not an investment at all and shouldn't be treated as such.

Re: The Terrifying Reality of Long-Term Unemployment

#236

Post by jngreenlee »

nostromo wrote: post #186
enraged_camel wrote: post #127

Earlier quoted context omitted.

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

A few things you're not accounting for: * Leverage. (The most you can leverage a stock investment is 2x. For homes people can leverage their money up to an insane 20x, for example: by buying a 500k home with 25k down. The proper comparison is not to compare buying a 500k home vs 500k worth of stocks; it's buying 25k or 50k worth of stocks vs a 500k home.) * Mortgage deduction. (Imagine if you could invest 500k in the…

One additional negative to home ownership is transaction costs. Real Estate agents, laywers, lenders, title companies all get you comin' and goin'. They love churn!

I like redfin.com as a market changer in this space. Check them out!

Re: The Terrifying Reality of Long-Term Unemployment

#237

Post by dredmorbius »

nostromo wrote: post #186
enraged_camel wrote: post #127

Earlier quoted context omitted.

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

A few things you're not accounting for: * Leverage. (The most you can leverage a stock investment is 2x. For homes people can leverage their money up to an insane 20x, for example: by buying a 500k home with 25k down. The proper comparison is not to compare buying a 500k home vs 500k worth of stocks; it's buying 25k or 50k worth of stocks vs a 500k home.) * Mortgage deduction. (Imagine if you could invest 500k in the…

What leverages up can (and will) leverage down. The problem with the housing collapse was that people with low or zero down-payment mortgages found that the property value fell, wiping out their entire stake (if they had any at all). More skin in the game should (though there's some research suggesting otherwise) make the market more stable by reducing the ability to speculate. This is a lesson that goes back to the crash of 1929 and the Dutch tulip bubble.

The mortgage deduction is priced into your home (as are low interest rates). Absent the deduction, real estate prices will fall. As interest rates rise, housing prices will also tend to soften.

What inflation giveth, it also taketh away: your mortgage costs are reduced, but so is the appreciation of your house.

Re: The Terrifying Reality of Long-Term Unemployment

#238

Post by stretchwithme »

The worst thing about the interventions into the labor market is that they prevent people from being hired.

It would be far better to hand aid to the working poor directly than to have a minimum wage or impose regulations that make hiring the working poor more expensive.

Many people seem to think making the employers pay somehow reduces their profits with no other ill effects. But in reality, it is also likely make prices go up. OR the take home pay of workers go down or rise more slowly.

Just because these effects don't happen immediately doesn't mean they don't eventually happen or that they don't accumulate. And just because you don't understand how artificial prices interfere with supply and demand doesn't mean the effects aren't real.

If you are one of the least productive laborers, your labor may not be worth the minimum wage to anybody. You're completely shut out. Good luck finding a place to live under the nearest bridge.

Re: The Terrifying Reality of Long-Term Unemployment

#239

Post by snowwrestler »

nostromo wrote: post #186
enraged_camel wrote: post #127

Earlier quoted context omitted.

>>There is another side of this that the article doesn't touch on: home ownership. Oh boy. There's so much I can say about this topic, and none of it is positive. Basically, the way our culture mindlessly promotes home ownership is insane. Absolutely insane! Every time I hear people complaining about "throwing away money" by renting, and how they would rather put that money into a house, I want to hold them by the sh…

A few things you're not accounting for: * Leverage. (The most you can leverage a stock investment is 2x. For homes people can leverage their money up to an insane 20x, for example: by buying a 500k home with 25k down. The proper comparison is not to compare buying a 500k home vs 500k worth of stocks; it's buying 25k or 50k worth of stocks vs a 500k home.) * Mortgage deduction. (Imagine if you could invest 500k in the…

Excellent summary. Home ownership will probably never in our lifetimes look like a better investment than it does now. Mortgages rates are extremely low, and because of all the quantitative easing, it's possible that we will see higher than average inflation over the next 10 years.

As a result you can basically borrow hundreds of thousands of dollars, long-term for free. Inflation offsets a fixed interest rate--and the spread is probably only about a point right now, with low inflation.

The housing market is recovering, and immigration reform could create millions of new legal customers for real estate. The only downside is that the mortgage deduction will likely be capped, reduced, or taken away as part of tax reform in the next decade.

Re: The Terrifying Reality of Long-Term Unemployment

#240

Post by stretchwithme »

jngreenlee wrote: post #236
nostromo wrote: post #186

Earlier quoted context omitted.

A few things you're not accounting for: * Leverage. (The most you can leverage a stock investment is 2x. For homes people can leverage their money up to an insane 20x, for example: by buying a 500k home with 25k down. The proper comparison is not to compare buying a 500k home vs 500k worth of stocks; it's buying 25k or 50k worth of stocks vs a 500k home.) * Mortgage deduction. (Imagine if you could invest 500k in the…

One additional negative to home ownership is transaction costs. Real Estate agents, laywers, lenders, title companies all get you comin' and goin'. They love churn! I like redfin.com as a market changer in this space. Check them out!

Of course. The real estate lobby is behind all these programs, and the propaganda about home ownership.

Many people would be better served renting. All of the incentives are actually causing us to spend a lot more on housing than we otherwise would have, capital that is being diverted away from building productive industries.

Which is fine, since we are letting China have all that stuff anyway. We have all the empty houses and the debt to brag about.

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