Christian Living

Jobs and Millennials

Scott Nicholson needs a job. Or so reports the New York Times in a recent article. The problem isn’t that Scott can’t get a job. It’s that Scott can’t get a job he wants. Here’s one situation that lead to a job offer he turned down.

It was in pursuit of a solid job that Scott applied to Hanover International’s management training program. Turned down for that, he was called back to interview for the lesser position in the claims department.

“I’m sitting with the manager, and he asked me how I had gotten interested in insurance. I mentioned Dave’s job [his older brother who makes $75k, this job offer was for $40k] in reinsurance, and the manager’s response was, ‘Oh, that is about 15 steps above the position you are interviewing for,’ ” Scott said, his eyes widening and his voice emotional.

The article documents the lamentations of a self-described “hard worker” as he searches for his first real job, post-undergraduate education. It seems two realities are hitting him hard while avoiding the third.

  1. His expensive undergrad degree and good grades didn’t earn him squat.
  2. Even though his parents are connected, there’s no high paying job waiting for him post-graduation.
  3. He has no debt, his grandparents paid his way through school, and his parents are footing his kennel fees indefinitely. This is a blessing and a curse.

What I find interesting is this desire to hold out for the right job. Scott would rather not work than work a job he doesn’t like.

It’s not just Scott who does it. It’s kind of an upper-middle class phenomenon in America. College graduates hold out for a dream job that doesn’t really exist. Meanwhile, hungrier and harder working students trying to climb the socio-economic ladder continue to take more advantage of a system that rewards hard work… thereby disadvantaging lazier, idealistic, rich kids who are looking for a fast-forward.

It’s a cultural disadvantage facing the suburbs right now. Somewhere, somehow, they have bought into a lie that pursuing the American Dream is easy. And a good job is their birthright.

A trip into American history only reveals the opposite to actually be true.

I wrote last May that there was bad news coming for the suburbs and Scott’s story only adds an illustration to the point. The problem isn’t that there aren’t jobs. It’s that there aren’t jobs that recent graduates are willing to do.

That’s two separate problems.

Don’t be a moron

  1. Life is not a made for TV movie. We’ve never lived in a country that grants recent college graduates wishes for easy street. If you want the American Dream you have to do it just like the next guy… you take it.
  2. You are not Mark Zuckerberg, Bill Gates, or one of these 20 year old billionaires. See, they didn’t just wake up billionaires. They worked their butt off and earned billions of dollars with their good ideas. But it also took time, they got lucky, and they are smarter than you.
  3. Starting at the bottom is not humiliating. It’s the only strategy that works. See, the economy depends on people starting at the bottom and working their way up. Likewise, how else will you learn? It’s not like college prepares you for the real world.
  4. There’s nothing wrong with chasing dreams. Heck, I’m still chasing the same dream I started pursuing as an 18 year old! I’ve come pretty far– but I’ve still got a ways to go! But understand that the chasing of dreams can take a lifetime of steps in the right direction while avoiding many pitfalls. If your life were a novel, it’d suck if you reached your goal in chapter 1.
  5. Desperation is the key ingredient to success. I can’t tell you how many times I’ve told parents… the best thing you can do to your post-college graduate is to stop feeding them, stop paying their bills, and make them either pay a real rent or kick them out. The smelling salt of items 1-4 above will never be accepted until a person wakes up to the reality that they are the ones who have to make something happen. If they don’t hustle, they don’t eat.
Politics stocks

A Failing Battle to Fight Foreclosure

Ángel Franco/The New York Times

This headline caught my attention this morning:

Ten months ago President Obama announced a $75 billion program to keep as many as four million Americans in their homes by persuading banks to renegotiate their mortgages. Lenders have accepted more than one million applications and cut three-month trial deals with 759,000 homeowners. But they have converted just 31,000 of those to the permanent new mortgages that are the plan’s goal.

It’s hard to fathom how many people are battling or have succumbed their life’s savings (their home) to foreclosure. In the third quarter of this year, 937,840 families received a foreclosure notice. (up 23% over the same period in 2008.)

It is important for me to state this fact– I don’t know a single person in which a bank has permanently helped during this housing crisis. They have done some short-term things. But every person I know, including ourselves, who has needed their bank to re-negotiate or process a short sale, has eventually had to accept foreclosure.

The government bailed the banks out, they’ve given them significant incentives, and yet they take the governments money– money clearly given to help re-negotiate loans– and just accept it as profit. Here’s another quote from the New York Times article:

The servicing companies make money either way. The Obama program pays them $1,000 for each loan modified, and another $1,000 per year for three more years if the borrower avoids foreclosure. On the other hand, the companies make large sums charging late and legal fees on overdue mortgage payments, and sometimes it is cheaper to foreclose than to cut the mortgage payment. link

Simply put, if your home is underwater (you owe more than it is worth on the market) and you need your bank to help you there is nothing they are going to do. They are going to stall, hem, haw, and outlast you. They know, relying that you are an honest person, that you’ll pay fines to try to keep your home but eventually you’ll get tired of the process and accept foreclosure. At least that is the banks great hope.

Maybe it isn’t always that way? Certainly, there are enough short sales going through to fuel the market and keep people’s hopes up. But for every person I know selling their house who has tried a short sale, it is merely a holding pattern– a glimmer of hope to hold on to– on the path of accepting the humiliation of foreclosure.

Bottom line, why is this happening? The banks make more money when you foreclose than if they do a short sale or modify your loan. It is in their best interest that you foreclose! The nature of how loans were created the entire Bush administration was that a loan was generated on a house, then the banks commoditized the loans and sold them off as securities. (Something like a bond) Then they hired servicing companies to make sure you paid your mortgange and that the investors got money.

Then the bank took out bets (credit default swaps) against the people they lended to. That’d be you and me. Read this little article about a 19th century confidence scam, it’ll sound pretty familiar to anyone who has bought a house! Don’t think it is possible to dupe the entire nation? Two words, my friends: Bernie Madoff.

See, in essence, the bank wants you to foreclose so they can make more money. And their processors (subsidiary companies) want you to struggle so you keep paying interest and penalties as long as possible. Then, when you finally give up, they still get the property. Cute, eh?

What’s the solution? The easy solution is for people to start paying 20% more for a house than it is actually worth. But who wants to do that? I’m afraid the government may be the only entity that can help. (Short of every American just stopping payment on their mortgages.)

Someone needs to help people on a wholesale level, renegotiate their loans. Like a one time amnesty program or something like that. It would seem reasonable that the local assessment office, which values your home for tax purposes, should be able to act as an independent agent to your mortgage company. “This home is now worth 25% less, you’ll need to reduce the principle on the loan by 12.5% to meet the homeowner half way or face a $50,000 fine fr0m the municipality and lose your license in this state.

Of course, that isn’t going to happen either. There is too much money to be made.

This is why people say this is a mess! It’s a big ugly mess.

Want to learn more? Check out this special from This American Life called “The Giant Pool of Money.”

news item stocks

From Wall St. to Your Street

Faced with sobering conditions, companies that issue MasterCard, Visa and other cards are rushing to stanch the bleeding, even as options once easily tapped by borrowers to pay off credit card obligations, like home equity lines or the ability to transfer balances to a new card, dry up. Story

Just like it takes a few weeks for us to see the difference between the price of oil and the gas pump, the recent crash of the stock market takes a few weeks to filter into our lives.

And from there it takes a couple weeks to filter from your street to your pew.

Are you feeling it yet?