Income & Pension Shifts


Now is time to adapt to two of the biggest shifts that affect our income and pensions.   Millions who do not modify their earning strategies and revise their savings tactics can miss exciting opportunities and suffer diminished purchasing power.

Merri and I have been gradually adapting for 20 years.

ginseng

See how our North Carolina ginseng patch is cashing in on a new trend in how to earn and save now.

First, let’s look at the old “climbing the ladder on one or few places” earning formula where we work for a salary with a good job cradle in a lifetime career.  The old way was to get in at the ground floor and work up the ladder for better pay, good health benefits and a solid pension upon retirement.

 The new format is more like “jumping from place to place-the heck with the ladder”.   Businesses around the world do not want the overheads of large staffs.   They hire temps, contractors and contingency workers instead.  The 2016 Forbes article “Contractors And Temps Were 100% Of Job Growth In US” (2) says it all.  Another Forbes article shows that 40% of workers now have contingent jobs.  The idea of working a lifetime with one company is practically gone.  Jobs with guaranteed pensions are even rarer.

The Wall Street Journal article “Contract Workforce Outpaces Growth in Silicon-Valley Style ‘Gig’ Jobs” (3) shows what this means to the economy and the way we earn and look after our health and future.

The article begins by saying: New research shows labor shift, affects health care, education and other industries that have traditionally offered stable employment.

The idea that employers will take care of us, income, health or retirement wise,  beyond their immediate needs is all but defunct.

This is not just a US phenomenon either.  Another Wall Street Journal article points out that the number of Spanish workers on low pay and limited benefit short term contracts is impacting Spanish politics and could hurt the Prime Minister bid for re-election this year.

The Eurofound.com article “The rise of temporary contracts in Europe” (4) shows that more than 1 in 10 employees in the EU are employed on temporary contracts, even though most of these workers want a permanent job.  The article outlines the dilemma, that temporary contracts help employers manage their work force but create job insecurity and lower pay.

Temporary employment has been rising across many European countries for at least three decades according to one study. Asia businesses are shifting in this direction as well.  Even in Japan, where cradle to grave employment was sacrosanct,  the growing reliance on temps is said to hold back a Japanese economic rebound (5).

This trend is not likely to reverse.  The Career Builders website shows new research on how temporary jobs will grow across almost all pay levels over the next three years.

The study identifies hot areas for temporary employment from 2016 to 2018 and says: “Today, nearly 3 million people are employed in temporary jobs, and that number will continue to grow at a healthy pace over the next few years as companies strive to keep agile in the midst of changing market needs.”

This chart from the site shows where the greatest demand is likely to be.

career builder

Chart from Career Builders website (6).

There are numerous ways to benefit from the contrasts created by shifting employment opportunities. 

We can lament the change, but chances are the trend won’t turn around any time soon, if ever.   Why not look instead of where demand will be for temporary and contractual opportunities?   Shift, adapt, grow.

Another way to benefit from these contrasts and trends is to do what you love, such as farming in the new way.

For example, Merri and I love growing crops and we have six agricultural properties now.

This has really paid off as the New York Times article “Goats, Alpacas and (of Course) a Hen: Life on a Hobby Farm” (7) shows when it says that hobby, or lifestyle, farms have been sprouting up across the country in steady numbers.  They have been particularly popular among retirees or people close to retiring who are looking to remain productive as they age while fulfilling lifelong passions or just tackling new endeavors.

The article highlights one couple, both 70, who raise alpacas on the six-and-a-half-acre farm they bought in preparation for retirement about 16 years.

The article says: They sometimes earn a small profit — though they mostly just break even — by selling some of their herd, along with the soft alpaca fleece and fleece products that Ms. Conn learned to knit and crochet. “I’m not in it to make money,” she explained. “I’m in it because I like the lifestyle. It’s a fun lifestyle.”

The key to this growing demand is that people want to stay active and do something meaningful As we live and remain active into the 80s and 90s, we have time to pursue our desires.

Though this type of farming is not highly profitable, the farms are.

The article explains:  Not surprisingly, demand for hobby farm properties is on the rise. “It’s a hot property class right now across the country,” said Michael F. Duffy, the president of United Country Real Estate, based in Kansas City, Mo. “It’s especially popular for people in the early- to mid-retirement range.”

Some lifestyle farmers generate a secondary income to supplement existing income or they save on their grocery bills by raising or growing their own food.

The bigger profits come from the growing value of the farm itself. 

We can all enjoy life more, earn enough income to pay bills and protect against pension loss through capital gains.   Look for this type of opportunity because the temporary worker trend not only reduces pension opportunities, but makes it less likely that existing pensions will survive.  In Part Two of this report  we’ll see why job protection for the older generation and earnings gaps that looms for younger generations dependent on short-term contracts makes it harder for pensions (especially those like Social Security) to keep their promises.

The world is changing as never before.  This will hurt many people, but not those who learn how to adapt to and benefit from the opportunities created by contrasts, distortions and trends.

Gary

Learn how to see through a growing deception and use temporary tactics to expand estates as well as provide income in later years to bolster income, especially if pensions fail to maintain their purchasing power.

(1)  www.wsj.com/articles/in-retirement-its-save-now-or-pay-a-lot-later-1484908217

(2) www.forbes.com/sites/timworstall/2016/03/31/contractors-and-temps-were-100-of-job-growth-in-us-and-thats-a-good-thing/#16e81c411b24

(3) www.wsj.com/articles/contract-workforce-outpaces-growth-in-silicon-valley-style-gig-jobs-1458948608

(4) www.eurofound.europa.eu/news/spotlight-on/employment/the-rise-of-temporary-contracts-in-europe

(5) www.wsj.com/articles/SB119939511325465729

(6) www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?ed=12%2F31%2F2016&id=pr947&sd=5%2F5%2F2016

(7) www.nytimes.com/2017/02/11/business/retirees-hobby-farms.html?emc=edit_th_20170212&nl=todaysheadlines&nlid=48317279&_r=0

 

 


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