Income Replacement

Because the 2007 Depression will entail income loss for just about everyone, we would like to discuss some ways of replacing your lost income.

Passive Investors are currently faced with income losses from (among other things): lower interest rates; cut dividends; and loss of capital. The solution to this lies in either taking greater risks, or rebuilding capital by reinvesting more income.

Self-Employed Persons are seeing business drying up right and left. The solution here, as ever, is to dynamically be on the look-out for income opportunities. At present, opportunities are fewer than before, but they are still there.

Many Employees are presently experiencing cuts in pay and hours, as well as the ever increasing layoffs. We believe that many, if not most, of the currently employed will become formerly employed. The approach of collecting unemployment until the economic situation improves may not work out as it has in the past. Furthermore, reemployment will likely come at vastly lower wages. One solution here will be to become entrepreneurial, which only promises hard work and uncertain income.

The Industrial system has historically been neo-feudal: in exchange for 'knowing one's place', employees would be both offered the security of steady income and relief from the burden of figuring out where the business was coming from. As globalism progresses, workers in OECD nations will find increasing downward pressure on their remuneration. We suspect that most workers will opt for the security of the paycheque, even at lower wages.

The relentless downward pressure on wages and its effects on the economy as living standards decline have been recently discussed elsewhere in Worse than the Great Depression. It is not a happy prognosis for the world's top quintile of income receivers. For most, income will decline and not be replaced.

You, Reader, can make an exception of this for yourself through creativity and Peasant Virtues.
Good luck!