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‘The incoming Biden administration will be facing a mounting — not waning — crisis’

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There were 10.7 million unemployed workers, but only 6.5 million job openings in November. (Photo by Chip Somodevilla/Getty Images)


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‘With growing COIVD-19 cases and falling employment, the incoming Biden administration will be facing a mounting — not waning — crisis.’


— Elise Gould, senior economist at the EPI

In November, the number of job openings softened to 6.5 million from 6.6 million the previous month, according to the Bureau of Labor Statistics released this month, while hires were essentially unchanged, increasing to 5.98 million from 5.91 million. Layoffs rose to 2 million from 1.7 million on the month.

This increase was described Tuesday as “troubling” by the Economic Policy Institute, a progressive think tank. “The latest congressional relief bill is an important step toward addressing some of this pain, but it is not at the scale of the problem. I’m hopeful that more relief measures are on the horizon for increasingly desperate workers and their families. Senate Republicans forced the December bill to be far too small,” said Elise Gould, senior economist at the EPI.

“The U.S. economy is seeing a significantly slower hiring pace than we experienced in May or June — roughly where it was before the recession, which is a big problem given that we have only recovered just over half of the job losses from this spring,” the EPI said. “And job openings are now substantially below where they were before the recession began.”

There were 10.7 million unemployed workers, but only 6.5 million job openings in November. “This translates into a job seeker ratio of about 1.6 unemployed workers to every job opening,” Gould said, “or for every 16 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means, no matter what they did, there were no jobs for 4.2 million unemployed workers.”

The Bureau of Labor Statistics data only covers through November, so is likely rosier than the actual jobs landscape, according to EPI. “It doesn’t even capture December’s job losses, which were substantial. With hiring and job openings at these levels, the economy is facing a long, slow recovery without additional action from Congress,” Gould added. The job losses, thus far, have been concentrated in the services sector, signaling a two-tired economic and jobs recovery.

Also see: The Moneyist — the ethics and etiquette of your financial affairs

The White House pointed to states’ efforts to contain the coronavirus and shuttering of businesses as the reason for the job losses in a statement released Monday. “Leisure and hospitality industry has been generally more susceptible to changes in the prevalence of COVID-19 than other industries, reflecting the regressive nature of government-mandated closures and the reduction in economic activity that occurs when individuals are subject to and make decisions based on these restrictions,” it said.

“As witnessed in the early days of the pandemic, employment in the leisure and hospitality industry fell by almost 50% between February and April, while employment in all other industries fell by a much smaller but still substantial 10%,” the White House added. It added that, with the reopening of businesses and rollout of the COVID-19 vaccine, “Employees in the leisure and hospitality industry are those most likely to see employment gains as a result.”

But people are, of course, suffering economically. At the height of the pandemic in March, more than 30 million Americans were laid off or furloughed when the economy shut down to curb the spread of COVID-19. The unemployment rate at that point was 14.7%; it has since come down to 6.7%. The leisure and hospitality industries have been particularly hit hard by the pandemic.

U.S. bars and restaurants got crushed again in December. Eating and drinking establishments lost 372,000 jobs last month, marking the first decline since April, when they laid off a whopping 5.4 million people, according to separate data released last week. California and New York have limited restaurant hours of operation, restricted the number of customers or bar indoor dining altogether.

The Dow Jones Industrial Average
DJIA,
+0.23%
,
S&P 500
SPX,
+0.07%

 and Nasdaq Composite
COMP,
+0.25%

 had a tumultuous 2020, but they opened higher Tuesday as investors weighed the likelihood of a more generous stimulus under incoming President Joe Biden amid increased risk of more political unrest after the siege on the U.S. Capitol by supporters of President Donald Trump last week.

The Dow ended 2020 up 7%, while the S&P 500 closed out the year up 16%, and the Nasdaq ended 2020 up 43%.



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‘I could live on my Social Security and still save money’: This 66-year-old left Chicago for ‘calming’ Costa Rica — where he now plans to live indefinitely

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Editor’s note: This article was first published in September 2019.

A school break changed 66-year-old Martin Farber’s life forever.

In 2007, his daughter — who at the time was attending Illinois State University — decided she wanted to spend a college holiday volunteering in Costa Rica and staying with a local family, he explains. She came home raving about the experience, so, in 2008, Farber — who at the time was living in Evanston, Ill., just outside Chicago, and selling cars — took his first trip there.

“It was a big surprise to me — bumpy roads, dogs barking in the streets,” he says. “I wasn’t enamored at first.”

But as his daughter began traveling there more and eventually moved there for a year, he took additional trips to Costa Rica. It quickly grew on him — in particular, the people. “The Costa Rican people are warm, open and friendly. I felt less invisible in a strange country in a strange town where I didn’t speak the language than I did in Evanston.”

And the more time he spent there, the more it impacted him: “On one of my trips there, I thought: My daughter’s life makes more sense than mine,” he says. “There was nothing wrong with my life, but I felt that my life was out of context with who I’d become. … I would have bills and make money to pay them, but that had ceased to be satisfying,” he recalls. “I knew I needed to change my life — there was no more joy in what I was doing.”

What’s more, when he’d return from his Costa Rica trips, people noticed. “I would come back, and my friends and therapist would say: You seem better after you go,” he says with a laugh.

A view from the hot springs near Martin Farber’s home in Costa Rica.


Martin Farber

So in 2014, he packed up and moved to Orosi — a picturesque, lush small town with waterfalls and hot springs a little over an hour’s drive from San Jose — promising himself he’d stay for two years. It’s been five, and he now plans to stay in Costa Rica indefinitely. (Though Farber notes that, to him, “it’s not a retirement; it’s a chance to lead a new and different life.”)

Here’s what his life is like, from costs to health care to residency to everyday life:

The cost: While many expats spend way more living in Costa Rica, Farber says: “I could live on my Social Security and still save money.” He says “a person can live on $1,200 per month, two people on $2,000.” The key, he says, is to live more like he does and as the Costa Ricans do — in a modest home, eating local food and purchasing local goods.

Indeed, Farber himself spends just $300 a month for rent (he rents a home from a friend who moved recently and gave him a good deal), roughly $225 a month on groceries and just $50 a month total on water and electricity (the temperate climate in Orosi means you rarely need heat or air conditioning). The veteran Volkswagen
VOW,
+0.96%

 
VLKAF,
+0.98%

salesman saves money by not owning a car (those over 65 ride municipal buses for free), which can be a significant expense in Costa Rica; for his cellphone, “I pay as I go … roughly $10 may last me a couple weeks or more,” he says, adding that “many people handle there their cellphones this way. You can get them recharged anywhere.”

His major expense is travel: He goes back to the U.S. to visit his mother in Florida several times a year and lately has spent part of the summer in Chicago helping out a friend with a dealership there. He also spends a good amount of money on health care. He says that while flights can be had for as little as $350 roundtrip during offseasons, the cost can be much higher the rest of the year.

In the saddle.


Martin Farber

Health care: Farber, who has permanent resident status in Costa Rica, says he pays about $90 per month to participate in the country’s health-care system — adding that the health care he’s received has been very good. (A 2018 study of health-care quality and access in more than 190 nations ranked Costa Rica No. 62.)

When he developed a detached retina, though, he paid for the procedure out of pocket so that he didn’t have to wait for the required surgery, he says — adding that the entire procedure cost him about $5,000. “I would have had to have waited four days,” he says, if he had not paid to expedite matters. “That might have been fine, but it might not.” And he adds that the quality of care depends on where you get it in the country.

Lifestyle: Though Farber says that he “moved here with no goals and no agenda,” he’s found plenty to do. “I take Spanish lessons two days a week for two hours a day. It’s been great. I never thought I would acquire a usable language in my 60s,” he says. He also rides his bike all around the area, does some writing and belongs to a community group that undertakes projects to improve the area.

And he often simply takes in nature, which he says has been an essential part of why he feels calmer and more relaxed in Costa Rica than in the U.S. “I live at 3,000 feet but in a valley surrounded by coffee fields and lime trees and water. At night, if I open the windows, I can hear the river rushing by,” he says. “It is very calming … hundreds of trees everywhere … you know the Earth is alive.”

The historic Iglesia de San José de Orosi.


iStock

Cons: “I don’t want to overglorify. It’s not without its problems,” Farber says of Costa Rica. “There are social problems and downsides.” He notes that crime and petty theft can be a problem (“I am cautious,” he says of his approach) and seem to have increased since he moved there, and adds that he misses out on some cultural things because of where he lives. And, he says with a laugh, “I can’t order Thai food at 9 at night.” But, he adds: “These are trade-offs — in the afternoon, I get to walk in the coffee fields and see flocks of parrots.”

Residency: To qualify for Costa Rica’s pensionado visa, expats must prove that they have a pension of at least $1,000 coming in each month. (Here are the details of that program.) Once you have lived in Costa Rica for three years, you can apply for permanent residency. Farber used a lawyer to help him figure out the ins and outs of residency options; his entire path to permanent residency took about a year, he says.

The bottom line: “After five years I am still amazed and surprised that I made the decision to lead a life I never thought I would,” he says. And while he may not stay in Orosi forever — “the town doesn’t have an ambulance, [and] I don’t know what it will be like to be 80 there,” he says — he does plan to stay in Costa Rica in no small part because of the people and sense of community. “I have the feeling that life is good here,” he says. “It’s hard sometimes, but we are all in it together.”



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Mutual Funds Weekly: These money and investing tips can help you read the market’s signs and stay on your path

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