Family finances feel chill of jobs decline

The nation's unemployment rate of nearly 10 percent is and will continue to have a dramatic effect on the millions of American households that still call themselves employed, according to local financial experts.

Though the unemployment rate is about 9.7 percent, it reaches much more broadly because there are many more who are underemployed and as a result underpaid, said Charles Hixon, director of the Consumer Credit Counseling Service of the Partnership for Families, Children and Adults in Chattanooga.

"That unemployment figure creates lower wages for everybody because it creates a much larger pool of potential hires so that nobody is offered a lot of money, because they can go out and get someone just about anywhere and they can fulfill most of the jobs that they are hiring," Mr. Hixon said. "It is going to have an extremely serious impact because of everything else that is going on."

With health insurance premiums going up and the cost of other necessary items increasing as salaries remain the same or fall, many Americans will be tightening their belts as they adjust, said Chris Hopkins, a financial adviser with Barnett and Co.

"There are people that are kind of getting caught in the squeeze," Mr. Hopkins said.

Mr. Hixon attended the annual meeting of the National Federation of Credit Counseling in Washington, D.C., in mid-September. Throughout the week, credit counselors and financial experts discussed many topics facing American families, including the long-term chill that wage freezes would have on the economy.

The common theme from people like Mr. Hixon and financial advisers l is that those people who still have jobs should do what they can to keep them.

"We've lost 7.5 million private sector payrolls, and it's going to be a long time recovering from that," Mr. Hopkins said. "The point is to a certain degree, you've got to be glad that you are employed."

While most economists agree the recession itself is over, the recovery is going to be fragile and difficult to get through, primarily because of the unemployment rate, he said. And the recovery period will most likely last for another couple of years.

"That recovery is going to really, really impact families," Mr. Hixon said. "If interest rates change and drive inflation up and people aren't getting any salary increases and maybe even the fact they might be going down, then the power of the family to buy or to be consumers is greatly reduced."

Both Mr. Hixon and Mr. Hopkins advise families to avoid unnecessary expenditures and taking on any new debt while saving as much as possible.

"Whatever job you have now, be thankful for it and hang onto it," Mr. Hixon said.