Middle Class Lifeboat Blog

by Paul Edwards, JD, and Sarah Anne Edwards, LCSW, PhD

Economists worry that Americans will use their tax rebates to pay down bills instead of buying more iPhones and plasma TV’s.  Certainly, decreasing personal debt is a pressing and important need for many Americans, but the best way to spend our rebates might be on neither consumer goods nor debt but on securing our economic futures in a perilous changing economy. 

While a “Recession” is an election year worry, with painful consequences for many people, something bigger is happening with implications for the standard of living and hopes of most Americans and their children’s future — changes that make the more important “R” words “Reinvesting” in our personal capabilities and “Retooling” our lifestyles.

The changes underway today are as profound as the coming of the railroad and mechanization were to American family farms in the 19th Century, when over only a sixty- year period half of the people once earning their livelihoods farming had to leave for the city. Today the forces of change aren’t on the rails or in the factories. They are:

   • A rapidly globalizing economy that’s transporting as many as 40 million middle-class jobs from accountants to radiologists to places most Americans can’t afford to vacation.
  • Global competition for energy and raw materials that is sending costs soaring. Ten years ago a barrel of oil cost $11; last month, the price rocketed over $100. Part of this price increase is also the result of the diminishing U.S. dollar, which has lost more than one-third of its value since 2003.
  • Rising costs of everyday essentials like health care, housing, child-care, medication, and education that are squeezing our budgets and running up our credit card balances.  

While elections and Superbowls happen on a predictable schedule, the forces reshaping our economy and our lives are happening so fast people are wondering how they can keep up, especially when tightening credit limits and bulging credit card balances are cutting off our remaining safety nets.

     So what can we do?  We can invest our rebates in building a lifeboat to serve as our own safety net. First, we can safeguard our income by retooling our skills and developing an independent source of income in a secure career than can either supplement our paychecks or serve as a Plan B if our jobs fall to either the imminent recession or larger global tides.

For example, we can start to think local, providing a basic local service that cannot be outsourced, such as training to become a community manager, a career that’s increasingly in demand.  The cost for becoming certified through the National Board of Certification for Community Association Managers is $815. (www.nbccam.org)

Or we can start to think virtual, working with people via computer, such as being a home agent, providing customer-support work that’s growing by leaps and bounds. The 100,000 people doing this now is predicted to triple by 2010. There are no fees involved in getting this type of work from most of the half dozen or so companies in this field. But we can use our rebates to purchase any new software or equipment we’d need for our home office.

Or we can start to think green, getting our career in step with the growing consciousness toward demands for an array of green products and services. To take a giant step ahead, for example, those of us with a knack for the technical could invest our rebates in building our own tabletop manufacturing devices from a design downloadable at http://fabathome.org. With a device like this that can be assembled for about $2,400 in parts, one can manufacture a wide variety of things. Just imagine homes filled with labels that read “Made in the Back Bedroom” instead of “Made in China.”

Second, we can invest our rebates in retooling our lifestyles in ways that lower our cost of living, trading in high-cost, high-maintenance lives for inventive ways to live better for less. Many people are choosing to move to a small town or small city, relocate abroad, live on the road or with others in various forms of shared homes and communities. Some are bringing simpler country ways to the city as “urban Thoreaus,” turning backyards and rooftops into growing flowers, mushrooms, vegetables, herbs, and when conditions allow it, even livestock. Some are choosing to escape high energy costs, doing everything from retrofitting windows to going off the grid, producing their own electricity or heat and cooling. While all these choices can our lives more affordable, they each require having some cash on hand to put our plans in place. We can use our rebates to get a start on that.

Third, we could use our rebates to extend our income by reviving some of the old or adopting some of the new alternatives to cash. Bartering and forming buying co-ops have been around for a long time. Joining a barter club can cost less than a rebate. Now computer technology and the Web have spawned newer techniques such as regiving networks like www.freecycle.com, which are programs for recycling unneeded household items for reuse by others. Or time banks where members get credits to trade by helping one another. Software and startup kits for making such programs easy to set up and run in a community also cost less than one rebate. All these cashless alternatives are not only viable ways to save money but also to avoid more credit card debt.

So, while Congress debates and waits to see whether stimulus packages stave off a bitter and potentially long-lasting recession, we can help by spending the investment they’re making in the economy to reinvent and retool our careers and lifestyles to safely navigate choppy economic waters.

© 2008 Paul and Sarah Edwards, Co-authors, Middle Class Lifeboat: Careers and Life Choices for Navigating a Changing Economy

This entry was posted on Thursday, June 19th, 2008 at 5:12 pm and is filed under Alerts, Debt reduction. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.