the illusion of job security

The Illusion of Job Security

The illusion of job security is real. When it comes to society’s awareness of history, they tend to forget the past. From a time span starting in the post-WWII era up through the end of the century, America experienced an anomaly where businesses were stable enough, and competitive enough globally, to ensure the retirement of their employees.  People were able to experience a golden age of long stable careers, and pension plans that would take care of the uncertainty of their retirement years……

the illusion of job security

But before that time period, all the way back to its founding, America was a largely self-employed society comprised of farmers, tradesmen, and merchants.  No minimum wage, no job security, no health benefits, and no retirement package.  They worked hard, and the family they raised was designed to be their social security so to speak.  Of course there were exceptions to this rule, but a very large percentage of society lived that lifestyle going back the past several centuries.

 

That brief period of job stability and retirement packages that came afterwards may be nothing more than an anomaly of post-war factors which made the U.S.A. extremely competitive in relation to the rest of the war-torn globe.

 

But today we live in a global economy where people aren’t necessarily rewarded for their employer loyalty. We are currently liviing on the illusion of job security. Employees on average stick with employers for far shorter time periods than in the past. There are a variety of reasons including layoffs, or employees only being able to increase their income through switching jobs.

Are you under the illusion of job security?

Here’s why I say that job security is basically an oxymoron.  As an employee……you are the last to get fed.  You have to show up to work for your employer.  Your employer has to make revenue from your efforts, and must cover all of its operating costs just to keep you employed.  It has to consider the need to make a profit, grow, fulfill the needs of its shareholders, and their customers.  And then of course Uncle Sam takes their piece before you ever get paid.

 

Let’s ask ourselves a question.  If times were to get tough, and profit margins were to get squeezed for your employer, would your employer be willing to sacrifice its financial condition to keep you employed?  Of course not!

 

Employees are there to serve the profit seeking purposes of a company.  And just like we saw in 2008, when profit margins get squeezed, companies lay off labor, and push the labor that stays on much harder.  And of course when government pushes for higher wages, what better incentive could you give businesses to start automating and outsourcing your jobs?

 

Not only that, but big business has been in cahoots with Uncle Sam to wean people off of the expectation of pension plans.  Up until 1978, employers would provide employees with a defined benefit plan, where the employee would ensure that retirees would receive a set income after leaving.  But in 1978, Uncle Sam allowed what was known as the Defined Contribution Plan, which would prompt workers to take a percentage of their own paycheck, and invest it in various investment vehicles.  This meant it was acceptable to turn over the responsibility of their retirement to the employees, letting the company off the hook. It’s another proof of the illusion of job security.

 

So here’s the bottom line.  Job security is becoming more and more of an illusion. Companies keep finding ways to need less and less human capital.  The moment letting you go makes them more money…..toodles.  And even if you do last until you retire, you now have to prepare for your own more retirement.  Traditional pensions are becoming extinct.  No security now or in the future.  So how does the little guy adapt?

 

Perhaps America needs to go back to its roots.  If the necessities of life are being produced with less and less jobs, then it frees up human capital to find new problems to solve.  New types of value to be created.

 

So you have 2 choices.  You can either moan about how you can’t get a good job.  Or you can get ahead of the curve, start selling yourself to the market, and probably make jobs for other people down the road.  In other words, you become an Entrepreneur.

 

This is my advice to young people in particular.  Education is still valuable.  But in today’s economy, waiting for somebody else to create a system where you can apply that education leaves you in the dust……with school loans piling up.  The illusion of job security is evident. Today’s young adults, both college graduates and street-smart hustlers alike, need to be entrepreneurial in applying their skill sets.  The good old days aren’t likely to come back.  You need to sell yourself, and brand yourself.

 

It’s time to get out of the illusion of job security. The other defense against a lack of job security is to build your own income security.  This means having the proper liability protection, and building multiple streams of passive income.  Capital Gains, Dividends, Option Premiums, Rental Income, and Interest From Private Lending.  Having many sources of income spreads out your risk that any one of those streams is going to be interrupted.  It’s also pretty exciting to watch your passive income replace your job entirely!

 

You have to start taking the Bull by the Horns!  If you;re looking to start taking taking control of your own financial destiny, we’re here to help get you started.

 

 

 

 

 

 

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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