But much less has been said about probably a more pressing concern to most workers--your job. Is it safe? Is the credit crisis going to make it impossible to find a new one if you get unceremoniously evicted from your current position? How long will it be before you can ever expect to see a raise or bonus again?
1. It has already hurt job growth.
Unfortunately, the credit crisis has already begun affecting job growth. The unemployment rate has grown an entire percentage point--from 5.1 to 6.1--between the month JPMorgan Chase moved to bailout Bear Stearns, March, and last month, August. Furthermore, it is likely to get worse before it gets better. Goldman Sachs Group economists wrote in a report to clients yesterday that they expected unemployment to rise to seven percent in late 2009.
2. The damage is likely to spread to other sectors.
At the outset of housing market's turmoil, most expected jobs in the banking, finance, construction and real estate sectors to take a direct hit, as the problems started in those areas. However, now it is clear that the damage is likely to spread to other industries, including ones that who use credit to buy their goods or rely on new investments to move forward. In short, most of them.
As for the IT department, David Foote, CEO and chief research officer at the IT workforce research consultancy, Foote Partners told Computerworld this week that he thinks more companies will be looking more closely at what parts of IT spending are actually critical, and some IT workers may be safer than others. But, overall, he finds little reason for techies to worry.
"Bottom line, considering tight credit, oil prices, and overall consumer confusion and pessimism, plus the lag time between business decisions and direct labor market effects, we won't see much IT workforce reduction or jobs shifted to outsourcing for the next few quarters," said Foote.
3. Skilled workers might not be spared.
Historically, most downturns have spared white collar and highly-skilled workers while hitting the least skilled the hardest. Yet observers believe that this downturn is likely to be more democratic than ones previously, because of the severity of the credit crunch.
"Research indicates that employers hire relatively more skilled workers when they invest in new plant and equipment, especially high-tech information and computing equipment (the so-called “capital-skill complementarity” hypothesis)," Alan B. Krueger, an economist at Princeton, told the New York Times this week. " If funds for investment are not available because of the financial crisis, however, companies will hire fewer skilled workers."
4. If you were going to retire soon, it will be a lot harder to.
If you've just retired or were about to, sadly, your timing could not be worse as by beginning to withdraw from you nest egg just as the markets tumble, you are essentially locking in your losses. But what if the wheels of your retirement were already in motion? What if it plummets the day after your retirement party, increasing the risk that you will outlive your retirement savings? Experts say, as depressing as it sounds, working just a few years longer can make a big difference.
"It does not have to be entirely unpleasant," writes New York Times columnist Tara Siegel Benard, trying to put a good spin on the depressing news. "Maybe you could continue to work a bit longer but start taking the trips you planned for retirement: say, keep your job, but go to Maui. Or perhaps you could work part time and earn enough to cover the amount you would have drawn from your retirement portfolio. At least you are not dipping into your savings while they are down."
5. It looks like this downturn is in for the long haul.
The next logical question is, "Well, how long will this last?" and while nobody agrees on an exact date, few have any confidence that it will be over by the holidays. Many argue that it will be at least 30 months long, and although no one goes as far as to liken it to The Great Depression, more than one parallel has been drawn.
And it's not just economists and pundits. One reader poll in a business newspaper found the 54 percent of respondents consumers believed that the recession would last through the second half of 2009 and possibly as long as 2011.
But does this mean that you'll never, ever get a new job? Not exactly. Most hiring experts suggest that you simply market yourself differently than you may once have, not by skills and career path maneuvers, but as someone who helps save organizations money and how will can do this for them.