CONSUMER BUZZ | Pounding the Pavement

ConsumerBuzz

Pounding the Pavement

I recently read an article about the “high” unemployment rate among minorities.  The article specified that the unemployment rate does not equate to the number of folks currently out of work, or unemployed, as you would think.  Instead, the term refers to the number of folks actively seeking employment.  So, according to the article, if you are unemployed and not actively “pounding the payment,” you are not counted in statistical unemployment figures.

I did more research on this actively seeking concept and confirmed what the article indicated is in fact true.  {We all know that you can’t believe everything that you read}.  According to Investopedia, unemployment “occurs when a person who is actively searching for employment is unable to find work[1].”  The article in some strange way praises minorities for the “high” unemployment rate by suggesting it proves that we “hang in there” rather than simply giving up the search after a short period of time.  However, it begs the question, why then is persistence not paying off for minorities?  Is it because we don’t market ourselves as we should?  Or, do we lose ground once we get to the interview?  Is it because we’re unprepared with our resumes, facts about the perspective company, cocky in knowing that we will get the job, unprofessional in our walk, talk, manner of dress, or something different altogether?

One thing that job hunters may not be aware of is the fact that many prospective employers will pull a credit report before deciding whether or not to hire you.  Yes, your credit history may be a reason why you can’t find a job.  Take for example, a person seeking a job in retail, in a department store.  Seems easy enough, the applicant loves to shop, looks and speaks the part, has previous experience, etc.  The manager, who has two equally qualified applicants, decides to pull the credit report to take a look at each applicant’s financial history.  Applicant A has a fairly good credit history.  Not perfect but she has limited debt, credit cards with available balances, and generally pays her bills on time.  Applicant B, however, has a ton of credit card bills, all maxed out, numerous past due payments, and even an account in collection (because she refused to pay that light bill – that will teach that nasty customer service rep about being rude to customers- and the light company reported that unpaid bill to the collection agency).  Who do you think the store manager will hire?  If you said “Applicant A,” you are correct and here’s why.  The store manager is saying Applicant B is in financial trouble.  Applicant B is unable to pay her bills.  Applicant B, therefore, may resort to some less than savory means to meet her financial obligations.  She may take a few dollars from the register, pocket an item when doing inventory, and may not be dependable and able to make it to work every day.  There may be little validity to these assumptions but the store manager is simply “playing the odds.” Applicant A presents less risk of loss to the store than Applicant B.

I present this scenario to remind you about the far reaching consequences of having a bad credit history.  Usually, when you fill out a job application, there is a little line of text near the signature line which authorizes the prospective employer to obtain a credit report on you.  Alternatively, there may be a separate form for you to sign an authorization.  Either way, you have to give your written consent to the prospective employer prior to them obtaining a credit report.   Negative information generally stays on your credit report for seven years; however, when applying for a job with an annual salary of over $75,000, information older than seven years can still show up.  So that negative information never truly goes away.  The credit bureau still has it and depending on the circumstances, may make it available to the requestor.

Now, I’m not suggesting that you not apply for certain jobs because you may have negative credit information.  I present the information merely an example of one of a number of reasons (albeit a less known reason) why minorities may have a higher unemployment rate than their white counterparts.  It is so imperative that we keep our “financial house” in order.  It is imperative that we teach our children the importance of paying bills on time.  And it’s important to not only pay them on time but to pay them down at a rate for an ultimate pay off which is sooner rather than later.  For example, by only paying the minimum amount due on the credit card bill, it will take several additional years to pay off the debt vs if you paid down “chunks” at a time.   In fact, the next time you receive your credit card statement, you will see a chart which tells you how long it will take to pay off the debt if you pay only the minimum each month.  It is really an eye opener into how much money we give the banks and credit card companies in the form of “interest.”  Even if you can’t make the higher payment indicated on the statement, paying any amount more than the minimum will help you pay down the debt faster.  Make a commitment to yourself to do this.  It will pay off, literally.

In this day and age the job market is highly competitive.  It was much easier 10-15 years ago to get a job than it is now.  Kids out of school for the summer were pretty much assured they would have a summer job.  Now, not so.  High school and college kids are competing against adults for various fast food and other minimum wage jobs.  In such a competitive day and age, please don’t let subtleties like negative credit information take you out of the running.  As the author of the article I mentioned tried to suggest (I think), we should be given kudos for the fighting spirit and resiliency that we as a people have.  However, we want that resiliency to ultimately pay off.  We want, in this case, the prize of actually obtaining the job.

 

[1] http://www.investopedia.com/terms/u/unemployment.asp