surviving the recession

The Guardian newspaper has a story today about a survey that shows one in three firms operating a pay freeze. The businesses justify this as an attempt to preserve jobs even when the firm itself is in a profitable part of the economy. Some unfortunate people are on their second year of frozen pay.

What should you do if you have had to accept a pay freeze? The only thing to be done is to try to cut outgoings, especially debt. The interest on the debt becomes ever more burdensome in deflationary situations were wages don’t rise. It means that natural income progression can’t minimise the problem with time. The only way to give yourself a payrise in these circumstances is to cut your debts. Initially it will seem tough, but as the debt falls away, you should be able to negotiate lower interest rates on the remainder, and hence cut your outgoings.

The trouble is that while people were enthusiastically paying down debt in the first half of the year, they now seem to be tired of making the effort and are back to hoping that “something will turn up”. However I believe that the deflationary wage freeze world is here for some time (perhaps two more years). So the only way to get a bit of relief into the situation is tackle the debt now. I know I sound a bit like a broken record harping on the same topic endlessly, but there it is.

We’ve has lots of instances of employers asking employees to take a pay cut or unpaid leave in order to cut costs and save jobs. British Airways announced that a lot of their staff had volunteered for the unpaid leave option, and British Telecom has announced that their staff are also going to take a 5% paycut in the form of unpaid leave.

These kinds of situations leave the employee between a rock and a hard place. On the one hand it’s better to have a job at lower pay than no job at all. On the other hand, these things have been tried by desperate companies before, and you end up with lower pay for a while, and then the company goes bust, and your redundancy payment is based on the lower pay. So you lose out even worse.

What should you do in this situation? Well good employees will get jobs no matter what the situation is. So if your company has asked you to take a pay cut, you may feel you have to agree, but then get out your CV and start seeing if you can apply for jobs at your old rate of pay or better.

Also use the unpaid leave to start earning a new second stream of income, whether it is working part-time in a bar or earning online. The fact is that in these days of recession, you can’t rely on any employer at all. It won’t be long before we are all self-employed at this rate.

If you are short of cash, you can make some handy money by renting your stuff out. What kind of stuff? Anything, campervans, powerdrills, barbecues, I even saw a request to rent a dehumidifier.

How do you go about it? There is a company called RentNotBuy, which has two websites -RentNotBuy.com for the USA and Canada, and  RentNotBuy.co.uk for the UK and Ireland. They are free to join, and do not have any referral systems.

You simply join the site and then list the item you want to rent out. Their software estimates the amount you should rent it out for, but it’s up to you to confirm this with the person renting (who can always negotiate with you). If someone wants to rent, they book it, the booking is confirmed by email, the renter goes to collect item, presents ID, pays upfront, plus a deposit, and then when the item is returned, they get their deposit back.

The websites are operated on a community basis, so they do not charge any fees for use of their site.

And if you need something, instead of rushing out and buying the item, consider whether you only need the item for a short while (say you need to video a wedding), and rent. There are many commercial organisations who will rent out stuff to you, but you should be able to rent more cheaply using a community website like RentNotBuy.

If you are personable, live in the UK and have good references, you can save on home costs by housesitting. Essentially you stay in someone else’s house when they are away and look after it for them. Most of the time you are free to come and go as you please, but you will have to ensure the place is kept clean and comply with other parts of the house-sitting agreement. Many people (but not all) who need house-sitting services have pets that they can’t take abroad with them and who need looking after.

One firm that offers house-sitting services is Homesitters.co.uk. They will pay you a token amount to house sit for them, and will provide a food allowance (about £7 per day). 

If you fancy a spot of house-sitting to supplement your income, this could be for you.

Clinical trials have several phases - Phase 1 involves testing the drug on healthy patients to check whether it is safe for humans (only later is the drug trialed on sick people). If you are healthy, you can make some money participating in these trials.

Healthy men between ages 18 to 45 are most in demand, and they usually pay £100 to £300 a day, some residential and some non-residential. Note that sometimes trials go wrong, but the firms concerned should compensate you should this happen. Before you sign up, ask them what happens when things go wrong and what their procedure for compensation is. Then give this information to a trusted family member with instructions for what to do. The incidence of something going wrong is rare, but it does happen. The British Medical Association provides information and guidance about the regulations surrounding clinical trials. 

Here are the firms in the UK that conduct clinical trials:

Roche UK

AstraZeneca

Quintiles

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Hammersmith Medicines Research

Veeda

Parexel