Unprepared For Unemployment
October 5, 2001
Tens of thousands of American workers laid off since the events of September 11 did not bother -- or were not able -- to save enough during the boom years of the 1990s to cushion the jolt of unemployment, experts report.
- At mid-year, personal savings were 1.1 percent of income on an annualized basis -- down from 1.3 percent a year earlier and 2.4 percent for all of 1999.
- While those Commerce Department numbers don't include stock investments or capital gains, those who put money in the markets were seeing values fall even before the terrorist attacks.
- As of this year's first quarter, 14.35 percent of U.S. households' disposable income was used for debt service -- up from 13.51 in 1990.
- Experts point out that low-income workers in the faltering restaurant and hotel industries are particularly susceptible to layoffs -- and are expected to bear the brunt of lean financial times.
Other factors contribute to the unhappy picture shaping up. Many homeowners used low interest rates to refinance their mortgages and spent the proceeds to purchase cars or remodel their homes.
One service industry is flourishing, however: credit counseling.
Source: Calmetta Coleman, "Many Are Unprepared for Unemployment," Wall Street Journal, October 5, 2001.
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