In November 2009, the Bureau of Labor Statistics announced that the unemployment rate edged down, but if current unemployment is caused by lack of innovation there will be few industries requiring a large workforce in the long run. Healthcare and clean tech developments will lead to hiring, but for those with specialized knowledge.
Companies that survive this recession will do so through consolidation or the building of simple systems that leave platforms to the collective intelligence of users to innovate. The decline of jobs from user-generated content is seen in entertainment with the low production cost of reality tv shows, technology with open source applications, advertising with "friends" for marketing, and news with the advent of blogging. Companies in the past based employment on future earnings, but now shift from forecasting to live more by the moment and base hiring on cash at hand, rather than revenue.
Employment will be less defined as regular and full time, and more as "as needed". With individuals creating their personal brands through social networking, solutions to unemployment may require reducing payroll taxes and benefits costs (e.g. health, sick days) to businesses, and increasing society funded programs that allow workers to purchase benefits on their own at low costs similar to the debated government-sponsored health insurance program.
Continued unemployment will lead to further housing foreclosure in 2010. But housing foreclosures are also caused by people's lack of understanding that housing is not meant to be a short-term investment, but a consumption product with long-term investment characteristics. Solutions to stabilize housing prices will result from low interest rates and tax incentives for those who can get credit, but reform in lending standards requires suitability analyses for money borrowers.
Based on numbers from the Administrative Office of the U.S. Courts, about 1.4 million bankruptcy cases were filed between October 1, 2008 and September 30, 2009. The year before, 1 million cases were filed. Chapter 11 filings increased by 68 percent, business filings overall increased by 52 percent, and non-business filings jumped by 34 percent. The bankruptcy system is intended to be a last resort for those who can't meet monetary obligations.
In 2005, major changes to bankruptcy laws prevent consumers from abusing bankruptcy laws to clear debts they can pay. Those who oppose the 2005 changes argue the law favors creditors making it more possible for them to receive payments through increased Chapter 13 repayment plans, higher attorneys fees (resulting from fewer attorneys taking cases for fear of fines when a client's case is found inaccurate), and qualifying tests.
The law requires debtors to meet with an approved credit counselor for a 90-minute session 6 months prior to applying for bankruptcy; and before discharging debts, debtors need to attend money management classes.
Since many Chapter 7 filers don't have assets that qualify for liquidation, creditors sometimes get nothing. Since 2005, fewer people are allowed to file Chapter 7; more are forced to file Chapter 13. Before 2005, the judge could determine if a case qualifies for Chapter 7; under 2005 law, whether a debtor can file Chapter 7 depends on a two-part means test that compares a debtor's income to his/her state's median income and an analysis of the debtor's ability to pay 25% of his/her unsecured debt.
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