Is Unemployment Really That High?

The nearby Kentucky Fried Chicken has a help wanted sign up for the past 6 weeks.  I asked the manager how the hunt was going when I picked up my bucket of goodness and he said nobody was applying.

They pay $10 an hour for up to 8 hour shifts a day.  That’s $400 a week and $1,600 a month.  Not bad right?  I think so, even for a city like San Francisco.  For $1,600 a month, you can rent a room with a couple housemates for $700 a month, and have $900 a month left over for food and entertainment.  Not bad if you’re single.

If you’ve got a family to support, $1,600 in San Francisco is not going to get you very far, which is why many move out of San Francisco to one of the burbs and commute.

KFC’s inability to hire got me wondering: Is unemployment really 10%?  Everyday, you see the media drone on and on about how bad the employment market is.  I truly empathize with anybody out of work who wants to work.  However, if KFC can’t find a position for 6 weeks, perhaps the employment picture is actually much better than perception.

The city of San Francisco is hopping.  There is more money out there than you think.  I couldn’t get a cab for 50 minutes the other day from downtown to the gym.  I gave up and ended up jogging 3 miles in the rain in my work clothes and 20 pound bag.  Shit, that sucked.  I asked my well-to-do friend who is approaching his 80th week of collecting unemployment insurance how much he gets and how he’s doing.  He said roughly $450 a week, which he spends on going out at night.  He’s having a great time.


I actually think about it once every couple of weeks thanks to the media and my own paranoia.  The truth of the matter is, I’d probably collect the maximum amount of unemployment possible in order to find the ideal job.  I would hold out until the very end.  It’s the rational thing to do.  However, when the unemployment benefits run out, I will be the first person to apply for the KFC job and then blog about it!

If for some miracle I had no savings after 10, 15, 20, 25 years of working, I would be the best damn deep fryer on the planet! I used to work for $3 an hour at McDonald’s and know what it takes to be a star in the fast food industry.  I’d work hard for my $1,600 a month and I would spend less than $100 a month on food because I’ll be stuffing my face with all the fried chicken, mash potatoes, biscuits, corn, and coleslaw I can!  I’d also take home all the leftovers which are thrown out at the end of the day anyway and feed others.

In fact, I would work hard to try and get promoted to manager and potentially double my income to $20/hour or $3,200 a month.  I’d still look for that ideal job, but I would also be making the best of my time at KFC.


Seriously, for all the negativity regarding unemployment, maybe we have very little to worry about.  If you are under 40, you can go back and live at home with your parents or relatives.  If you’re over 40, so sorry.  If you’ve had the luxury of working for 20+ years before becoming unemployed, you likely have a huge safety net to last you a while.  Think about it.  Saving just $10,000 a year for 20 years, 20 years ago and investing the proceeds probably leaves you with at least $300,000 in savings.

Finally, if you have absolutely nothing, you at least have a 13-month extension of the 99 weeks of unemployment which pay some $1,700 a month in many cities.  Once the 99 weeks runs out, there’s KFC for $1,600 a month and free food.  Couldn’t you live off $1,600 a month with free food?  I know I can.

Note: Just the other day, I was sitting on the ski-lift chatting with a guy.  I asked him whether he is taking the week off since it’s a Wednesday, and he said, “Nope!  Got laid off in December and am taking the winter off with a great severance package, healthcare, and unemployment checks until I plan to start looking again in April.  I’ve already got two job offers but I want to ski!”  Now that is the way to live!

Readers, do you think the unemployment situation is actually much better than the 10% unemployment rate would dictate?  Why do you think it’s taken 6 weeks and counting for the KFC to find someone to work for them for $1,600/month?

If you’re 45 years old and have been working for 23 years, isn’t 23 years of savings enough to hold you through several years vs. a younger person, say 27 who has only had 5 years to save?



Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship. Sam focuses on helping readers build more income in real estate, investing, entrepreneurship, and alternative investments in order to achieve financial independence sooner, rather than later.

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  1. says

    I’ve seen the same thing down in my area–businesses are eager to hire, but they can find neither willing nor qualified people to get in. Weird.

    I’m sure part of the reason is exactly what you touched on–if unemployment benefits are bringing in $1,200 a month, most people don’t want to be bothered to work all month for $400 more.

    All things considered though, I think if I was in that situation, I might go for it. $400 is $400, and when it’s 33% more income, it makes a huge difference. But for many family situations, personal situations, etc. it just doesn’t make any financial sense.

    I’ve always believed that given a choice, people will do what’s best for THEM. It’s not selfish, it’s just the way it is–we’re bred for self-survival.

  2. Money Beagle says

    I think you might have pockets of areas where unemployment is really high. Consider metro Detroit, where I live. In some of the suburbs, everybody on the block is pulling out of their driveway and heading to work, maybe one person here and there isn’t. But, if you go into some sections of the city proper, there’s 50% of the people that aren’t working. You average that together and you’ve probably got your 10%.

    Was the KFC in a part of town where there might be a large affect, or could you just perhaps have been in a spot where the unemployment hadn’t really had the effect.

    Either way, I think it’s important to look at the overall picture, and not look at one KFC or even one part of the city as the measuring stick.

    • says

      I just call em as I see em. The KFC is in one of the more expensive neighborhoods in SF.

      I hear what you are saying. And what I’m saying is that there’s a job that pays $1,600/month frying some crunchy chicken for 6 weeks, and nobody wants it.

      I’ll do it in a heartbeat if I had no job!

      • BG says

        $10 an hour doesn’t seem like enough in SanFrancisco (hence why
        they haven’t filled the position!). What does that $10 an hour net you
        after job-related commuting and other expenses. Better off getting the
        average McDonald’s salary of $34k/yr…

  3. says

    I could write a 10,000 word comment on this.

    You don’t get paid ten dollars an hour at KFC here, that is for sure.

    Many people drawing unemployment have no intention of working for similar wages when they have months and months of benefits still to go. There is a lot of that ‘taking time off’ mentality too. I know I said this before, but I was talking to someone who was discouraging her spouse from finding work (he does not have a degree) because he would make the same on unemployment, and I think she liked having him around the house to take care of stuff. Plus, the unemployed person is searching for his ‘dream’. I love dreams, however, dreams have their place, and so does reality and paying your bills.

    I think the lengthy benefit period has taken away many people’s sense of urgency toward finding a job. If I were unemployed and the family needed money, searching for a job would be my full-time job. Not everyone feels that way. They need a break, they have worked hard, the workplace won’t value them like that need to be, etc etc.

    Like everything, the unemployment number is an average across the country. Some pockets will be doing great, like where you live, and other areas will see a much more dire picture. I agree with Money Beagle, you may need a different benchmark. Leave California and come spend a week in the heart of Detroit. Then write a compare and contrast post because you would have a totally different perspective if you lived here.

    • says

      In Detroit, do you think an example like this of a $1,600/month KFC job doesn’t exist b/c they are all taken?

      I would want to take 2-3 months off myself after I got fired and collect unemployment. I’d send some feelers out there to honor the contract, but boy would I want to use the time to travel and reflect.

      • says

        I think they don’t pay that kind of money in the Detroit area. If they did, the job would be filled instantly.

        I found that having time off from working was a wonderful thing. My most recent stint of not working was about the healthiest thing I ever did.

        • Jan says

          I am TIRED of the unemployment package. If you cannot find a job- MOVE!
          That is the reality of it. Tired of the Detroit saga.
          There are choices.
          I have several “friends” who have been on unemployment for SEVERAL years.
          Get off your butt and look.
          Those $10 an hour jobs are all over the place.
          But noooo—they want $40 an hour. That is what they are worth. They can
          sit at home and collect more than $10 on unemployment.
          Drives me crazy.
          Welfare for the middle class. Why should I work to pay their income?

        • says

          Jan, it is very easy to say you are tired of the Detroit saga. I cannot move because I have family that are physically unable to move to a new area, I can’t really abandon human beings.

          However, I am not on unemployment nor is anyone in my family. I am just using my situation as an example. I do know many that do not want to work because they can make comparable wages on unemployment. Believe me, I do have similar frustrations as you do, but it is definitely not a Detroit-only problem.

      • says

        I agree. The people I know who are on unemployment aren’t too concerned with finding a job anytime soon. They are happy to have the time off. There are plenty of jobs out there for people, they just have to be willing to work them. If you ask me, if I needed an income I wouldn’t let my pride get in the way. Plus being on unemployment for long periods of time has a negative reflection on you when you go to interview for a job and they see there is a gap in your resume. Companies like to hire those that work hard and working hard includes working hard to get a job as fast as you can.

  4. says

    I love this post Sam! Really reflects what I often think. Some people unfortunately can’t find a job even though they are searching for a while and can’t stand staying home AND not having money aside. I have a close relative in that situation and really feel bad for him. BUT, I also know a lot of people who really could work but prefer taking some time off enjoying unemployment checks and seeing it as some kind of vacations.
    And let me share a personal experience. There was a time in my life (actually more than one, but that one really was hard) when things were not going so well. I was young and did not make good decisions at the time. I ended up paying two rents in two different cities but got laid off my job. Well, I went to the Tim Horton’s nearby, worked really hard at it, found another job while still working there, spent three months in a row without a single day off, working days and nights and guess what? The Tim Horton’s job paid more than the other, in the communication field. Of course, I got out of trouble, decided to leave Tim Horton’s as I studied communications, but one can really live correctly with a job like that. It is the Tim Horton’s paycheck who got me out of trouble.

    • says

      Sounds like you have excellent initiative! You did what it took to survive, and survive you have!

      So again, perhaps things aren’t so bad afterall. The worst cast scenario is for one to make $1,600 a month at KFC with all you can eat food. If that’s the worst case, i don’t think that’s so bad.

  5. Investor Junkie says

    It was the best of times, it was the worst of times. IMHO the country is leading two separate paths. The rich are getting richer and the poor are staying poor (or getting poorer). Parts of the country are very much hurting, there is no way to deny this.

    The other aspect is unemployment insurance itself. I believe people are waiting for the better jobs to come along, than take the “lowly” KFC position.

    I’m not commenting if this is good or bad, just what I think is happening.

  6. says

    I honestly think that because the unemployment insurance can last for up to 99 weeks for some people, that a lot of people are taking their sweet time finding a job. A side effect of that in some cases could be that lower end jobs like at KFC or McDonalds may go unfilled. People can get almost as much on unemployment without having to go to work, so why would they sign up for that kind of duty – until their 99 weeks are up?

  7. says

    If you could the underemployed, unemployment is somewhere in the 16% area. It’s not that bad here in the Midwest, most can find employment, and those who can’t probably aren’t looking that hard/receiving unemployment.

    My town has been shedding very serious employers lately (Whirlpool is one massive example) so we have a lot of manufacturing job loss. That’s never good…especially since many of those workers are well past gray hair but have worked there since high school.

      • says

        It wouldn’t be so bad if they had saved and invested. Of course, these are union jobs, so there is some kind of understanding that they’ll get a pension…so I’m sure very few of them have any side investments of their own. Do I feel bad for them? No, they have had every opportunity; however, it is still my concern, since through government I’ll be paying for any bit of their inability to save sufficiently.

        The highlight, though, is that few have other skills than what they did at the factory. That won’t make for a smooth transition into another sector, and again, their time off is time others will have to afford.

        Actually, from what I understand, they receive 2 year salary from the government if they decide to go get an AA/AS from the local community college at zero expense to them. Nice, huh?

        • says

          Union jobs pay more than market rate. Hence, they should have even MORE money saved up, since they are making more.

          And, if you don’t save b/c you have a pension, that’s great. Which buttresses the point that things are much better than the media drones on to be.

  8. says

    Where’s the incentive for some people to work if they can get paid for not working? If someone has low expenses, plus savings, and they can get paid for not working – they won’t look hard for work. Doesn’t apply to everyone, and people with families don’t quite fit in that category. But if someone could take some time off and recharge, and not be any worse off for it, they will do it.

    Having said this, I think that there are many underemployed people out there and some who have given up. All of this depends on where one lives and what area is being considered, too. Having family in the Bay Area, and having traveled there probably 20+ times in my life, I can say that it’s a parallel universe, so to speak. Lots of money, smart and energetic people, etc. It’s a vastly different situation in a decaying rust belt city where the local Applebees is the “cool” place to go. In such places, a job at KFC might be a ticket to a legit opportunity at a $10/hour starting point. In S.F., where better high potential opportunities abound, why waste time at KFC?

    • says

      Why waste time at KFC? Because KFC is only 8 hours a day, and there are 16 more hours in the day to do whatever you want! That’s why I would waste 8 hours a day to earn $1,600 a month at KFC. I’d then optimize my online properties and make it rock.

      When I worked at McDonald’s from 6am to 2pm for $3.12 an hour. I was damn proud of the work. It was hard work, but it felt good to do something and serve.

      • says

        The thing is, in SF there must be better uses of 8 hours than KFC@$10 per hour, no?

        I worked jobs for far less when younger, like $4.50 per hour. My friends were making $3.35 per hour, so I seen as a money man. In that area, at that time, it was a big deal – while now I realize the limited view that encompassed.

        Perhaps it’s a matter of where one lives and what their individual financial and personal situation is. I think many people in a lot of places around the country and life situations would jump at the KFC opportunity. For others with opportunities through A) job/business climate (as in SF) or B) collecting unemployment and making more while doing nothing, there’s less incentive to work the deep fryer at a chicken place.

  9. says

    There is more to the percentage than what you see in one region. Yes, there are people collecting who are not looking and do not want to work. The vast majority of unemployed do not have the skills necessary to be re-employed and do not know how to look for work. This is across the board, even college graduates do not have the skills or know how to interview or look for work.

    Should they take any job in the meantime? Certainly the unskilled should take any job! The others probably compare the $450 per week they may receive in San Francisco on unemployment and think why work for $10 per hour. It would be a pay cut! Maybe they should not take the KFC job, but volunteer or freelance. Some of the reasons for some people on unemployment are these were people who are under performers or people the company wanted to let go. They are not all aggressively looking for work!

    There are too many middle-aged people who have no savings or retirement which only makes this worse. They will add to their debt and probably never get out from under. This is true for almost every age bracket, although you would think a middle-aged person would have a sizable nest egg!

    • says

      That’s the thing though. Perhaps we should t have to worry about high unemployment becAuse more people than we think aren’t in need of a job, otherwise these jobs would be filled!

      Middle aged people DO indeed have a boat load of savings and investments. No way did they not save anything after 10, 15,20 years of working. That’s jus silly!

      • Patrick says

        I would strongly disagree about people who have worked for 10, 15, or 29 years having saving built up. I know of a lot of folks who have worked 20 years paycheck to paycheck and have nothing saved up.

        Consider the person who has been working for 20 years, they did save some money up and bought a house between 2003-2007 for $400,000 with a ARM loan. Guess what, that house is now worth maybe $250,000, the mortgage is well over $375,000 remaining and the reset payment is $1,000 more than they were paying on the ARM, one person in the couple loses a job and you have complete financial breakdown.

        I am glad life is good and happy in San Fran, but like others have said, try living in the Midwest where factories have either shut down or are running skeleton crews and you would be singing a different tune.

        I also think that benefits should be go down 2% every two weeks. If there is no incentive to work then people won’t work.

        • says

          Are you saying people in the Midwest are different from the rest of America and don’t know how to save and invest for their retirement? I would think that’s kind of a slap in their face and to the intelligence of people living their no?

          SF is not special. We are no different from anyone else. If you’ve worked 20 years, you’ve saved 20 years. To not do so would be irrational. Are you saying people are irrational and don’t save for their future? Are you not saving for your future?

        • Patrick says

          I am not questioning their intelligence, it’s just me stating the facts. To many people are overextended and the plans they made to start saving just kept getting pushed to the back burner.

          Also, when people live mostly paycheck to paycheck a little blip can wreck complete havoc on their finances. One trip to the ER, one kid who needs a new pair of glasses or braces and there you go, no savings.

          Another thing, a lot of people had investment plans tied into the company they worked for, so you worked for GM for 20 years acquiring GM stock and boom, the company goes bankrupt and your whole life savings is wiped out.

          People are changing now, but there a lot of people who are still in bad financial shape. For someone is making ends meet now with $100 left over from each paycheck, every $0.10 cents gas goes up cuts into the food they buy to even thinking about putting away money for savings.

          If you can convince all these people to give up cable, cell phones with data plans, pick-up trucks then maybe they could save some money. But where I live, the people have more faith in their church and the guns than they do in the stock market or slick talking city dwellers.

      • says

        According to the statistics I saw recently, there as much as 50% of older
        Americans without savings or retirement. There was an equally high percentage
        who will work past normal retirement because their situation.

  10. says


    I think you highlighted the problem in the first few paragraphs,

    “They pay $10 an hour for up to 8 hour shifts a day. That’s $400 a week and $1,600 a month. Not bad right? I think so, even for a city like San Francisco.”


    “I asked my well-to-do friend who is approaching his 80th week of collecting unemployment insurance how much he gets and how he’s doing. He said roughly $450 a week, which he spends on going out at night. He’s having a great time.”

    Why would anyone take a job if unemployment pays close to the same?

    I think unemployment is unemployment there is no saying whether it is too high or too low, rather (and it may just be semantics) I think it is the job market that is better than the media portrays it to me

  11. says

    What a great way to look at the unemployment rate that we are hearing in the media. I see quite a few “Help Wanted” signs here in the Portland, OR area and I often wonder what some of these companies are hiring for. While I was reading your post I thought “I need to inquire about the help wanted they are looking for”. This would be my own way of seeing how the unemployment rate actually is here in this area. I feel that a lot of people won’t go to work at a fast food establishment because 1) their unemployment is coming in and they will “look” for a job when that runs out or 2) they won’t work for minimum wage especially in fast food.

    I’m a manager at a company that hires people for low wage jobs (not in the food industry), we don’t pay minimum wage but close to it. These employees work hard, don’t complain and are happy to have a job in the present market.

    • says

      Maybe I’m just an optimist, but that’s just how I look at it. I look at things very rationally. The job isn’t filled b/c people don’t need $1,600 as they have MUCH MORE than that.

  12. says

    Unemployment isn’t that bad , I could easily find a part time job in NYC. What is hard is finding an internship in the finance industry in NYC. If I could apply an unemployment number to my specific sector/work experience it would be 70%.

    • says

      Tell me more about the finance industry and Wall St. In NYC. Are you saying nobody is hiring, or it’s just super competitive? It’s still early for hiring since people are just getting paid their 2010 bonuses I would think.

  13. says

    Actually, I do think unemployment is high. The only problem is some people want better jobs. They choose jobs. unlike, most people, they just write their resumes and give it to whoever and wherever.

  14. says

    Study after study have shown that people accept a job much quicker when their unemployment is about to run out – which is exactly why 2 years, or the 5 years you advocate leads to exactly this situation. I know, I know, there are people out there that can’t find “equivalent” work after 2 years. So move – or accept lower pay. If you haven’t found it in 2 years, it’s not going to happen. People need to face reality and taxpayers shouldn’t continue to fund the specific behavior you’re pointing to. There are exceptions of course, but in aggregate, this is happening all over. I see help wanted signs everywhere as well – and unemployment’s at 10% nationally and even higher in CA near you.

  15. BD says

    I think it depends on where you live. My friends in SF never had problem finding employment. However, where I live, jobs are almost non-existent. I couldn’t even get the local truck stop to hire me. (I finally gave up looking for work, and am going back to college for a different degree).

    And not everyone can move to where the jobs are. I know I can’t right now. Not til I graduate.

    • says

      Hi BD, I think it’s great you have gone back to school. Do you plan to move out to SF or another bigger city afterwards?

      Also, would you have been willing to work at KFC, or was there not even a KFC hiring in your area?

      I am actually really looking forward to working at Starbucks in retirement for the health care benefits!

      • BD says

        I doubt I’ll move to SF, just because the cost of living is so high. I’d rather go back East. Since my degree will be in Accounting, I should have a wider choice of cities that have jobs available in that field.

        As for KFC, if it got to that point, I would have tried. But my town has a weird dynamic that you won’t find in most places. I’m in a small town in Utah. If you’re not part of the predominant religion here, you won’t be hired. I’m stuck here for now though, since my parents are here and they’re letting me live with them. I found it better to spend my time here going back to college, and then moving out-of-state once I get my degree, rather than continue to look for work and be stuck in a low-paying job for the rest of my life. In the meantime, I do art/graphic design freelance over the web.

        But if college were not an option to me, then yes, I would have tried the KFC (even though it is unlikely I would NOT have been hired there either.)

        I could dig working at Starbucks (or Home Depot) in retirement for the bennies. I honestly don’t plan on ever retiring though. I don’t think I’ll ever have enough money to be able to, to be honest.

  16. says

    I think there are jobs everywhere. However, I think a lot of people are holding out for a job where they remain at the same social level or move up. It seems that so many people who have lost their jobs are unwilling to take a job that’s “beneath” them. I think that if you can’t get the job you want, then it seems like you’re stuck taking one that’s beneath you. Suck it up and do the work.

  17. says

    I think that unemployment benefits tell part of the story, but not all. I think a lot of people are doing like cousin eddy (From christmas vacation) and “Holding out for a management position” I’m of the opinion that you should take whatever job you can get, just so you can at least get some income coming in!
    If it’s beneath you, transport yourself back a few generations (to when whoever in your family got to this country). Ask yourself if the work would be below them. I think the answer is no, so just go with that for the time being.

  18. david M says

    “SF is not special. We are no different from anyone else. If you’ve worked 20 years, you’ve saved 20 years. To not do so would be irrational. Are you saying people are irrational and don’t save for their future? Are you not saving for your future?”

    Yes I’m saving and probably almost everyone that is reading your blog is. However, I think you need to realize that people reading financial blogs probably are much more educated and much more financially savy than the average person.

    I come from a family of 9 children all in our 40’s and 50s. I know almost for a fact that 3 of the 9 children have virtually no savings even though they have been working for 20 plus years.

    • says

      Do you think it is ironic that people who are more educated and need less financial help are reading financial blogs? If this is the case, how do we reach out to people who need help the most?

      Why do you think your 3 siblings have little to no savings after 20 years? I’m seriously curious why they wouldn’t save. Govt bailout expectation, or simply living life to the max? Thx

      • david M says

        The reason they have no savings is they have no ability to control their spending. Any little extra money gets spent. Unfortunately, it is actually worse than just spending any extra money they spend more than the extra money.

        For example, one sibling won $200 on a scratch ticket – I don’t remember now but I thing the $200 was spent 3 or 4 times over.

        Regarding how we help people that need the help most – one idea is that everyone neeed to take a basic finance course in high school. I know some school do this but what percent I do not know. I think your question is a good blog entry.

        • says

          Hmmm, so perhaps it’s like an addiction or something? I’ve not really heard of someone not having the ability to control their spending, so maybe they have psychology problems to surmount?

          Basic finance courses in high school is such a no brainer and I agree. It’s part of the reason why I started the Yakezie Scholarship / Writing Contest. It’s to help educate high schoolers, and get them to think about PF issues now, rather than when its too late.

  19. says

    We’ve got a relative in the rural midwest, 34 years old, mother of 3, stepmother of 2. After she was laid off from her bartending/waitressing job (the bar went out of business) she has been trying to find minimum wage work for well over a year now. At the dollar store. At Walmart. At the Piggly Wiggly. There’s no KFC in the town, but she’s hit up Pizza Hut. There’s no jobs in the 60 min area surrounding the town, not even minimum wage (or lower than minimum wage, like waitressing) jobs. Her DH is making 36K/year at his construction-related job. Her bad credit keeps her from a lot of these jobs– The Dollar Store there doesn’t have to hire employees with bad credit and they do run credit checks. Sure, if they lived in SF she’d be able to get a job at KFC, but they couldn’t support 5 kids on that.

    • says

      Hi Nicole, thanks for your thoughts! Isn’t it curious though how it’s never us, but a friend or a relative in trouble? Why is that? It’s so common an occurrence where I’ve almost stopped believing.

      5 kids is a handful. Would it be safe to say the husband and wife have the financial means to support 5 kids, otherwise they wouldn’t? I know most people wouldn’t be pumping out kids if they couldn’t afford it. Or, is it just their supreme horniness that’s got the best of them?

      • says

        I think that’s what you call “selection bias”… people who are trying to make ends meet don’t have time to read a blog by a guy who just spent 10K in order to get the opportunity to play tennis with grand high muckity-mucks.

        She did not have 5 kids, she had 3. #3 was planned. #4 was gotten even though she was on birth control. #5 was a miracle baby, Irish twins with #4 (there’s something like a 7 month difference in their births– #5 was a preemie) who was conceived while she was breastfeeding, on birth control (depo-provera), they were using a condom and he had an appointment for sterilization (which he has since had done). All kids were had long before the recession hit when minimum wage jobs were much more numerous and before the husband’s company went out of business or the auto industry started to suffer.

        I cannot fault them for not believing in abortion as a choice for them.

        All to say, I do believe that unemployment is that high. Maybe not in the tonier neighborhoods in SF, but in the rural midwest, there aren’t these fancy minimum wage jobs to be had for the asking. But you can make enough to feed and house 5 kids without government handouts in the rural midwest (even if you’re behind on your car payment) , so moving to SF would make zero sense.

        • says

          I see. And since you brought up $10K for joining a club, do you think that is an outrageous sum of money to spend? The club + the value of my care equals $15K, which seems modest copared to what others spend on a car alone.

          How are you doing employment and wage wise? Hope you are OK.

        • says

          Oh honey, you don’t have to explain your purchases to me. I don’t really care how you spend your money.

          If I were making 36K/year supporting 5 kids and 2 adults, then I might want to avoid reading about such things. That’s the selection bias I was trying to explain, why folks who can’t get even minimum wage jobs might not be your target demographic, and thus might not be proffering their own stories to you.

        • Jan says

          1) It is no one’s business why anyone has five children.
          2) It is quite possible to raise a large family in the rural Midwest on $36,000 a year.
          Our schools are good, housing is cheap and fun is still the out of doors.
          The high school football team is it.
          Churches tend to be full and food is put on the table by neighbors when times are tough.
          We learn how to live within our means.
          Teachers are still paid in the $30,000 range- and they raise families as well.
          3) Our children tend to do very well in the world-
          Kansas ranks 5th in the nation for reading and 9th in Math and the state
          universities keep pumping out real majors.
          So…don’t feel bad for your cousin. She is, most likely, going to produce some
          hard working, family loving kiddos….
          Yes, there are some people who cannot keep a penny in their pocket-
          but they are the ones with the third job and grandma watching the babies.
          At least that is my experience as a transplanted big city girl in rural Kansas.

  20. David M says

    “I’ve not really heard of someone not having the ability to control their spending, so maybe they have psychology problems to surmount?”

    It is amazing how people see the same thing so differently – this is what makes the world interesting!

    I know so many people with this problem. For example I know people struggling to pay their mortgage but continuing to buy Groupons to “save money”. I want to scream at these people and tell them that Groupons are not saving them money and that they are wasting their money on Groupons.

    I have no way to support this but if I had to guess I would say that 30 to 50% of Americans have problems with controlling their spending. What else would explain all the money spent on Christmas presents when people have so much debt and so little savings?

      • David M says

        Regarding your debt post – that was another one of your very thought provoking posts that I made a posting to.

        Am I doing OK, honestly compared to most of America I think I’m doing much better tha than okay.

        You are absolutely entitled to your opinion and I respect it 100%. However, I just do not agree with the premise. As I stated before I believe people reading and posting to finance blogs are much better educated about financial matters and thus are doing much better than the average American when it comes to unemployment, income, debt, savings for retirement, etc.

        When it comes to polls asking people how much they have saved and how much debt they have I can not think of any reason for people to overstate their debt and/or understate their savings. I do not know the typical number for either of these, however, I think the quoted numbers are accurate AND I also think the numbers for people posting to your blog will be MUCH better than the average numbers.

        I’ll start out – I’m in my mid 40’s and have $400,000 house with a $190,000 mortgage. I have no other debt. I also have about $400,000 in retirement savings and $300,000 in other savings. These numbers are much better than the averages for people in America. However, I would say these numbers may be average or could even be below average for people posting to your blog.

        As always, thanks for taking the time to read my post and everyone else’s post and more importantly, taking the time to reply to so many of the posts.

        • says

          Looks like you are doing great, and that is great! You have helped me prove my point. The average American has much more money and savings than people give credit for. The media is just nuts for always trying to say people are suffering and don’t have this and that.

          Everybody thinks they are special, but let’s be frank, we aren’t special. The numbers you have stated are very common, and actually on the low end of EVERYBODY I know who has shared their income with me between 35-45 years old.

          This is why I’m so bullish on America. Most of us are staying humble, hiding our wealth and have much more than the statistics say we have.


  21. says

    Siloam Springs, northwest Arkansas, just over the Oklahoma border. Population about 13,000. Right off Highway 412, which runs through the strip mall section of town, there is a large factory building which has been sitting empty for the last few months or longer, at least since I’ve been visiting. I don’t know yet what was manufactured there, but one could safely presume that the average hourly wage at this factory was higher than a $10/hr KFC wage. I also presume that it’s not been shut down for very long, as it looks new and the grounds are well-kept. Don’t know if the people that worked there for the last 5 or 10 or 20 years now rely on fast-food jobs or savings. The fast food joints in town don’t have any help wanted signs, that I do know.
    I also know of hourly wage employees at my job that don’t take advantage of the 6% company match in the 401k plan. Short-sighted, undoubtedly. Saving 6% of a 40k/year salary may not seem like much to many readers here. I suppose that when living on the razor’s edge every month, that extra $200/month is already spent.

  22. says

    Yeah I know a few people who are “funemployed”. They got laid off, are collecting unemployment insurance and are either taking a break or are redesigning their life.

    I actually got laid of in November 2009 and was eligible for $1600/month unemployment insurance. But I knew with that money it would be too easy to sit on my ass and do nothing, so I got a job on a cruise ship instead :)

    • The Genius says

      Not to burst your bubble, but most of the top financial firms have a 3.5 minimum GPA. Can you raise that your final year of school? It’s more like a 3.75 minimum ie A- or better.

      • says

        I’d argue on this one, if your coming out of a state school with a 3.75, its much different than coming out of a top tier university. Wall Street consists of just more than Goldman Sachs. I have no worries about it

    • says

      Genius has a point. I don’t know any of my friends working on Wall St. out of undergrad who has under a 3.5 GPA out of 4.0. Most of them were Magna Cum Laude 3.75 GPAs or better. There’s just MASSIVE competition for those jobs, so they have the ability to choose higher. It’s just the way it is, but that doesn’t mean you can’t break into the field. You just have to try that much harder.

      What year are you Jeff? You still have time to jack up that GPA.

  23. says

    i think unemp is higher for higher paying jobs (economic contraction), and maybe just about right at the fast food level. the issue, as highlighted already, is that those at the FF level are likely enjoying unemployment benefits, or just plain laziness

    on a side note, what is the $3 an hour MCD wage worth today (inflation adjusted)? curious if minimum wages (typically what fast foods pay) have kept up with cost of living

  24. says

    I definitely think the lengthy unemployment benefit period is making people piddle around about looking for a job. They are either holding out for a great position (i.e. high salary) or are enjoying their freedom to do what they want until the benefits run out (like my sister.) The Quiznos near me is also hiring and their sign has been up for a couple of weeks now. I guess no one really needs a job bad enough to work at Quiznos.

  25. says

    Wow, I came out of the reader to see how many people answered your question regarding savings and age. It’s too bad that David M is the only one to brave the question. I did enjoy Nicole “giving it to you something nice”, however. :)

    To give my two cents with the majority, I know of two cases:

    Case #1: Female, 28 yrs old, 2 kids, from Detroit. Collected unemployment until it ran out. No money saved. Currently about to get evicted. When told about an alternative to eviction, moving into a lower cost rental, the answer was, “I’ll rather be homeless than live on that side of town.” Haha. I guess we’ll see her when she’s an icicle and have baby iciclets.

    Case #2: Female, 26 yrs old, 1 child, lives with mother. Looked for a job for about the first six months. Afterwards, she decided that its best to stay home and nurture her child as many mothers wishes to do. She saves pretty much all of her unemployment, so I’ll assume that she’ll be okay once her benefits runs dry; And she’ll have had the benefit of raising her child on the governments dime. Is this fine? Maybe, maybe not. But it supports the “screw that KFC job theory.”

    To follow up on David M, great job, Sir. I wish all can save as you have. Unfortunately, we know this to be totally untrue. From what I’ve seen, there are two types of blog readers, those heavily in debt, or those who have come from a deep dark debt laden place but had found a love for personal finance in their climb out.

    So, Sam, to answer the question that I was looking to find from others:

    I’m thirty years old, have one debt, a mortgage that I ignorantly financed for thirty years. I’m renting it out now but hope to sell it (at a substantial loss) once my renters leave later this year. I do understand that home ownership should be a part of my retirement plan so after selling, I will purchase another home at today’s low rates with a fifteen year or less mortgage so that it’ll be paid off by the time I reach forty-years-old. I have about $40K in retirement and am aiming to save an additional $10K per year for the next 30 years.

    The problem is that too many people reach their financial “wake-up” too late and by the time they reach it, they are already forty-five-years-old. So, hell yeah it’s enough if one has been saving for 23 years, assuming that someone has but savings first all of their lives and had no financial hiccups to delete them–like a job lay-off.

    Whew. Back to homework.

  26. Charlie says

    The 45 year old should have had enough time to pay off their mortgage and have a decent retirement fund. But what they’d be dealing with is trying to put kids through college. I guess the 27 year old could still be paying off their own college tuition too. I think it can be tough at any age to lose a job and hope we can all get more job stability and see the economy recover.

    • says

      You make a great point about mortgage and kids in one’s 40s that may cause a crimp on one’s savings. Hopefully, people have a saving/investing system in place and pay themselves first for their 20+ year long careers!

  27. Jennifer@ConsolidateDebt says

    The real unemployment numbers are much more dismal than the absolutey fraudulent figures you are hearing , Part time , seasonal temp work , people that have simply given up looking for work and have entered the welfare system are all factors that aren’t even being considered in these equations , The US economy is on the skids and everyone knows it. American Industry , once the envy of the world , is now boarded up factories and tumble weeds , No amount of feel good articles penned by Journalists on the Wall Street payroll are going to fool the American people! The reality is that there has been no recovery whatsoever!

  28. Matt T says

    Man Sam, it’s good to read some optimism out there. A part of where I disagree is your assumption/insistence that people are logical.

    Is it really so unbelievable to you that someone might have no savings after working for 20 years? Do you not know anyone who knows they should be doing something (saving retirement, eating less and exercising more, etc) but, despite best intentions, never seem to get their feet under them? People act out of short-term interests over long-term ones all the time. I doubt many people without savings at 45 or 55 have anything planned for retirement – they’re likely just in a massive state of denial.

    I’m certainly not defending them or saying it’s normal to have nothing saved. I’m just saying that your assumption that people are logical and always make decisions with conscious reflection on short- and long-term consequences seems a bit rosy.

    • says

      Miss T, yes I believe people are highly rational. Nobody sticks a needle in their eye bc it’s painful, just lime nobody doesn’t save for retirement if they don’t need the money.

      Since we are logical, it is therefore logical to conclude that the economy is much much better than people give credit for. My thesis has panned out since my first bullish posts in June, 2010 and many of us have profited handsomely from it.

      I’m sure you are doing great too, right?

      • Matt T says

        “Miss T”? I like your abrasive style but I don’t know where you’re going with that. I do agree with you that the economy is better than people give it credit for; I just am not quite as bullish about just how well.

        But anyway, touché. I am doing reasonably well for being 24. Certainly better than my boss who doesn’t think he’ll ever be able to retire because of various financial miscues. I have anecdotes on both the positive (my out-of-rehab aunt getting a decently paying job and that allowing her to get her life back on track, my sister who just bought a $2M house with not much, if any, money down) and the negative (the aforementioned boss, my roommate’s lack of work that makes him worry about rent and paying his parents back).

        All in all I think people are doing better than advertised, but that doesn’t mean everyone is doing well.

        • spendaholic says


          I think he made a typing error and didn’t mean to call you “Miss T.”

          Back to the program, I think the economy will likely worsen versus getting better but we shall see in 11 short months.

  29. Twist says

    I’d like to point out that your numbers are wrong. At 10 dollars an hour you actually get $1120 after tax, and those jobs don’t even cover health insurance. That might help clarify why no one seems to be biting the “generous” offer. Not only that but if you actually make the $1600 max in unemployment, you were making significantly more than that before you were unemployed. In most cases even if you applied for the job you’d be washed out as overqualified.

    • says

      You are saying the government takes $420 out of $1,600 in taxes for an effective tax rate of 26% if you are making $19,200 a year?

      I’d love to bet any amount of money that you are wrong and not even close. Please take me up on this bet, please? Pretty please? Cheers

      • Twist says

        Considering I am looking at my pay old paystubs as I say this, I’ll happily take you up on that. Why are you surprised? It’s a well known fact that between social security taxes, medicare, etc, wages in america are taxed at almost 30%. That’s what makes the investment taxation rate so unfair. You might get some of it back come tax return time, but $1120 is what you’d actually be getting month to month to pay your bills.

  30. Lee Rowley says

    If I were truly unemployed, I’d lose my mind if I wasn’t doing something productive! I lost my corporate job two years ago, but I’ve never collected a penny in unemployment benefits. Instead, I started drumming up freelance clients. It wasn’t the easiest path I could have taken, but I can hold my head up, knowing I didn’t sponge off taxpayers.

    Seriously, though, if I had opted for unemployment benefits instead of forging my own path, I would have disintegrated into an alcoholic pile of goo within 3 months.

    I realize that not everyone has the motivation to create their own success, though. Ability, yes, but not motivation.

  31. says

    I do think it’s easier for those who have had some time to sock away capital — if they’ve been prudent and have been saving, of course. For a younger person who might be still in debt, they don’t have as many options. Nonetheless if someone is getting 99 weeks of unemployment why on earth would they give that up in order to get paid less working the deep fryer? It’s rational to just collect the check until one finds something good.

  32. Pickapen says

    Dude what are u like Sara Palin and u can see Alaska from your front porch? You must be related to Marie Antoinette ‘if the people have no bread then let them eat cake!’. You obviously live in a well to do SF area where min wage jobs are available given the high net worth socioeconomic group that populates the area. People in your area are not looking for low wage jobs; those jobs have to be filled by those who have to travel into your area from poorer places; even then it’s not worth their efforts because after taxes a large percentage of the income is used for commuting to the job.
    Have u been to Florida, Indiana, Ohio and Michigan recently? I have for biz and let me assure you there is some serious unemployment there particularly in the large inner cities. You won’t see $10 hr KFC jobs offered like leaves on a tree because they are taken. You won’t see many jobs available because there is no labor shortage.

    Your anecdotal evidence is a bit moronic. Using your logic, if I don’t see any homeless people in my neighborhood then they can’t possibly exist, right?

    Wake up princess there is famine, sickness and poverty in your kingdom even if you are sheltered from it inside your crystal palace.

  33. L Marie Joseph says

    I see that you are so positive. To answer your question
    on if it’s much better than the 10% unemployment
    rate would dictate? I guess it depends
    on the people you hang around. Some feel there is no hope
    and some take advantage of other opportunities. I’m
    an optimist and thinks everything happens for a reason

    Yes there’s unemployment. But the majority of us are working
    The ones that have given up is such a small percentage.

  34. Dragon says

    I think a lot of people don’t think about the changing demographics, especially California, New York, and others. Taxes are too high, and people are moving to other states. Arizona, Texas, and so forth. I don’t know if all the companies moving are going to have the same employees — maybe a few as a guess. The rest are out in the cold.

    Moral of the story: Don’t tax so much and don’t regulate so much. Maybe business will move up a few notches where before they were leaving.

  35. Name withheld says

    Found this through your post on Untemplater. I’d love a job that paid $10/hr. I love any job that wasn’t yet another 2 or 3 month temp position. Stores seem to rather have an opening for months than hire an ex-con.

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