Estimated cost of losing a job
Losing your job can be devastating, in more ways than one. How much, in dollars and cents, does such a lost cost a person? N.C. State University economist Mike Walden answers.
“I think this is an important question for planning purposes so that if, unfortunately, someone is looking at a potential job loss, at least this information will tell them on average — and of course everyone is different, but on average — what that might mean to them in terms of lost income, and for example how much more they may need to work in their lifetime to make up for it.
“Anyway, there was a recent study by economists that looked at this issue. They looked at men under age 50 who had three or more years of working experience, and what they found in the last recession, this is the recession we’ve been through, the average job loss for those kind of people cost them $100,000.
“Also, the economists estimated that those folks would need to work an extra three years in order to make up that difference. And this is something you’re hearing more and more. You’re hearing people who have their hours cut back, who’ve lost their jobs say, ‘Well, I’m going to have to make that up, and I’m just going to have to work longer.’
“Again I should caution our listeners, these are benchmarks. These are averages. Every person is going to be different, but it does give us some perception of what a loss of job would cost this kind of average man under age 50.”
Category: Economic Perspective