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With all the recent talk about recession, concern about layoffs may be gripping you already. The thought of losing your job and not finding another one for months is pretty scary, especially if you have a lot of obligations.

In our increasingly global economy, outsourcing of jobs is commonplace. And, you may know one or more people whose job ended up in a country where the cost of labor is a lot less.

There is one country where outsourcing is less of a concern: Denmark. There, the government has established a program called "flexicurity," and there you will find the highest employment rate in Europe.

According to YaleGlobal Online, flexicurity is a "three-legged stool" that depends on:

businesses' ability to hire and fire with ease,
workers' willingness to accept change, and
government's provision of ample unemployment benefits and help with retraining.

In Denmark there are few labor laws, but that's accepted by workers because they have a strong safety net. In the event of a job loss, the lowest paid workers receive 90 percent of their lost income.

However, about half of the workers who register for unemployment are out of the unemployment system within six months. Seventy percent have a new job within a year, and those who are unemployed for one year must retrain for another field of work.¹

Regarding this retraining system, Forbes.com analyzed the effects of a major layoff at Denmark-based Lego Group, maker of the interlocking, multicolored building blocks that are so popular with kids.

Lego decided to cut more than half of its Danish workforce by outsourcing the manufacture of its blocks to Singapore. The Danish town most affected by this decision was Billund, where 2,000 jobs were lost.

But Forbes noted that Lego's outsourced workers were "landing softly and bouncing back," collecting up to 90 percent of their income for six months. Before receiving their first unemployment check, most were placed in a six-week retraining program, which was held in former storage rooms at the Lego plant and paid for by unions and the Danish government.

"The retraining scheme has been so effective at teaching service-industry skills that Lego had to discourage the Billund airport and the owners of a new water park...from poaching the trainees before it was ready to really lay them off," Forbes said.

Some U.S. politicians are looking at Denmark's flexicurity system, but it comes at a high price: an income tax that tops out at 60 percent, Forbes says.²

Currently, there is debate among members of Congress about whether such a system is right for America. We'll leave that debate to the politicians.

But what I want you to know is that with the right planning, you can create your own flexicurity program—without the higher taxes.

Remember the generous unemployment benefits that the Danes receive? If they're ever laid off, they have a guaranteed income on which to rely while they're seeking a new job and/or retraining. You can, too! In the first three destinations of the Crown Money Map^TM, we encourage you to save:

$1,000 for emergencies (Destination 1),
one month's living expenses (Destination 2), then
three month's living expenses (Destination 3).

And, nothing should stop you from saving beyond this point—even six months' living expenses, or more, if you like. When calculating emergency living expenses, concentrate on necessities. Also remember to add in the cost of employer group health insurance coverage. You can extend that coverage under the federal COBRA program, but you'll have to pay your employer's part as well as your own.

Remember the Danes' successful retraining program? Laura T. Coffey, in an article for MSNBC, says people who are currently employed should pursue higher education while they have the chance. If you work for a company that offers a "Corporate U," or for an employer who helps with education costs, take advantage of these resources and beef up your skills and your resume. "Hundreds of corporate university classes have been accredited, meaning you could get college credit for them if you ever enroll in a degree program," Coffey said.³

If your employer doesn't offer classes or share costs, how do you pay for education? And, how do you save three months' living expenses, or more?

First, live within your means, which will require you to put some dreams aside for a while. Second, move saving and education closer to the top of your financial priority list. Third, analyze all your expenses to see where you can cut back.

Speaking of cutting back, Bankrate.com urges people to look for small expenses that can add up to large amounts of money over a year. Among these expenses is brewed coffee. Purchased at an averge price of $1.38 per cup on about 260 weekdays per year, the total comes to $360.

At $1 each, drinking bottled water each day will cost you $365. Other items that add up include having your car detailed every two months, $348 per year; weekday lunches out, $2,340 per year; weekly manicures, $1,068 per year; and vending-machine snacks, $260 per year.⁴

In short, get a handle on your money or it will get away from you. Plan for the future or the future will catch you off guard. Make yourself attractive to employers or possibly find yourself unemployed...for a long time.

Having fun, eating out, and paying someone else to do what you can do yourself are all nice, but not at the expense of your future. Nail down your spending and start funding your own flexicurity program today.

_____________________

¹Bruce Stokes, "Europe Faces Globalization—Part 2," YaleGlobal Online, May 18, 2006. ²Stephane Fitch, "Copenhagen Capitalism," Forbes.com, March 12, 2007. ³Laura T. Coffey, "With Recession Looming, Be Prepared for a Layoff," MSNBC.com, March 7, 2008. ⁴Bankrate.com, "10 Little Expenses That Add Up Fast," MSN MoneyCentral, October 11, 2007.



					May 2008
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		Worried about layoffs? Create your own 'flexicurity' With all the recent talk about recession, concern about layoffs may be gripping you already. The thought of losing your job and not finding another one for months is pretty scary, especially if you have a lot of obligations. In our increasingly global economy, outsourcing of jobs is commonplace. And, you may know one or more people whose job ended up in a country where the cost of labor is a lot less. There is one country where outsourcing is less of a concern: Denmark. There, the government has established a program called "flexicurity," and there you will find the highest employment rate in Europe. According to YaleGlobal Online, flexicurity is a "three-legged stool" that depends on: businesses' ability to hire and fire with ease, workers' willingness to accept change, and government's provision of ample unemployment benefits and help with retraining. In Denmark there are few labor laws, but that's accepted by workers because they have a strong safety net. In the event of a job loss, the lowest paid workers receive 90 percent of their lost income. However, about half of the workers who register for unemployment are out of the unemployment system within six months. Seventy percent have a new job within a year, and those who are unemployed for one year must retrain for another field of work.¹ Regarding this retraining system, Forbes.com analyzed the effects of a major layoff at Denmark-based Lego Group, maker of the interlocking, multicolored building blocks that are so popular with kids. Lego decided to cut more than half of its Danish workforce by outsourcing the manufacture of its blocks to Singapore. The Danish town most affected by this decision was Billund, where 2,000 jobs were lost. But Forbes noted that Lego's outsourced workers were "landing softly and bouncing back," collecting up to 90 percent of their income for six months. Before receiving their first unemployment check, most were placed in a six-week retraining program, which was held in former storage rooms at the Lego plant and paid for by unions and the Danish government. "The retraining scheme has been so effective at teaching service-industry skills that Lego had to discourage the Billund airport and the owners of a new water park...from poaching the trainees before it was ready to really lay them off," Forbes said. Some U.S. politicians are looking at Denmark's flexicurity system, but it comes at a high price: an income tax that tops out at 60 percent, Forbes says.² Currently, there is debate among members of Congress about whether such a system is right for America. We'll leave that debate to the politicians. But what I want you to know is that with the right planning, you can create your own flexicurity program—without the higher taxes. Remember the generous unemployment benefits that the Danes receive? If they're ever laid off, they have a guaranteed income on which to rely while they're seeking a new job and/or retraining. You can, too! In the first three destinations of the *Crown Money Map^TM*, we encourage you to save: $1,000 for emergencies (Destination 1), one month's living expenses (Destination 2), then three month's living expenses (Destination 3). And, nothing should stop you from saving beyond this point—even six months' living expenses, or more, if you like. When calculating emergency living expenses, concentrate on necessities. Also remember to add in the cost of employer group health insurance coverage. You can extend that coverage under the federal COBRA program, but you'll have to pay your employer's part as well as your own. Remember the Danes' successful retraining program? Laura T. Coffey, in an article for MSNBC, says people who are currently employed should pursue higher education while they have the chance. If you work for a company that offers a "Corporate U," or for an employer who helps with education costs, take advantage of these resources and beef up your skills and your resume. "Hundreds of corporate university classes have been accredited, meaning you could get college credit for them if you ever enroll in a degree program," Coffey said.³ If your employer doesn't offer classes or share costs, how do you pay for education? And, how do you save three months' living expenses, or more? First, live within your means, which will require you to put some dreams aside for a while. Second, move saving and education closer to the top of your financial priority list. Third, analyze all your expenses to see where you can cut back. Speaking of cutting back, Bankrate.com urges people to look for small expenses that can add up to large amounts of money over a year. Among these expenses is brewed coffee. Purchased at an averge price of $1.38 per cup on about 260 weekdays per year, the total comes to $360. At $1 each, drinking bottled water each day will cost you $365. Other items that add up include having your car detailed every two months, $348 per year; weekday lunches out, $2,340 per year; weekly manicures, $1,068 per year; and vending-machine snacks, $260 per year.⁴ In short, get a handle on your money or it will get away from you. Plan for the future or the future will catch you off guard. Make yourself attractive to employers or possibly find yourself unemployed...for a long time. Having fun, eating out, and paying someone else to do what you can do yourself are all nice, but not at the expense of your future. Nail down your spending and start funding your own flexicurity program today. _____________________ ¹Bruce Stokes, "Europe Faces Globalization—Part 2," YaleGlobal Online, May 18, 2006. ²Stephane Fitch, "Copenhagen Capitalism," Forbes.com, March 12, 2007. ³Laura T. Coffey, "With Recession Looming, Be Prepared for a Layoff," MSNBC.com, March 7, 2008. ⁴Bankrate.com, "10 Little Expenses That Add Up Fast," MSN MoneyCentral, October 11, 2007. ©2008 Crown Financial Ministries Privacy Policy