The world as seem by my students

[bob2007]

Big Dog,

I didn’t say it wasn’t needed, I was pointing out that focusing only on housing prices was bad.

I do not think it is a good idea to have your house paid off – all your money is now in RE. If you believe this list, then you should have a low interest rate (mine is 5.125%) and have the cash in other investments to diversify. That is my position now. If you subscribe to the 50% decline, then you are about to lose 50% of your money.

[DaisyDuke]

First, this country is resilient. We will rebound from this and will have learned a great deal from it, until the next bubble pops up.

Remind your students of the other bubble, the baby bubble (aka baby boomers) who are ready to leave the market/earth in droves. That will open up numerous job opportunities as posted above. Tell them to focus their career on healthcare or funeral arrangements or adult diapers or . . . well I better shut up. You get the idea.

Just because this episode of the great American Dream is coming to a close doesn’t mean other doors won’t open to them and the best thing about the good old US of A is that we can explore and exploit the possibilities. Tell them to keep and chin up and think of this as a good thing.

[bob2007]

Kev374, your credibility is taking a big hit. I don’t like Bush, but he didn’t cause the housing problem. If you are counting on any government to fix problems like these you are in for a world of frustration.

I’m going to paint a big target on myself now, and maybe lose credibility with many here. I used to think the H1B visa were bad, but have come to a different viewpoint. I saw an interview with Bill Gates, and although I have no love for Microsoft, I think he is correct in that if we do not allow outside talent into this country we will lose our competitive edge. He has so much money now that I don’t think he is saying this for the benefit of Microsoft.

Big corps will win this battle regardless. If they can’t hire here, they open facilities outside the US which helps no one here. You can’t crate an artificially high resource, whether it be housing or salary.

Ok, let the beatings begin!

===========================
Bush has supported cuts in Educational funding, increase of the H1b cap to satisfy his corporate cronies and provide them with an endless supply of cheap 3rd world labor, mindlessly emptied our coffers on this idiotic war and printed money to create this whole bubble fiasco! Shame on the Bush administration!!!!! They have FAILED all of us.
===========================

[blahblahblah]

Agreed, it’s not all Bush’s fault. However, the H1-B thing is not as simple as it seems. It is harder to get H1-Bs here now for a variety of reasons, the most important of which is that there are a lot more jobs for these guys in India and China now. It used to be that we only outsourced drudge work, but now companies are doing advanced R&D, software, board, and chip design all offshore in India and China. Someday maybe American engineers will be applying for Indian visas so that they can work in Bangalore 🙂

[surveyor]

righto bobo

totally agree with you, bob2007. i think we in the U.S. were so starved for talent, we started poaching other countries’ talents. imagine, our corporations are so desparate to fill jobs that they have to go abroad. why aren’t our schools or our children filling these jobs?

a part of it is we’ve gotten a little lazy. i mean, why toil in a really difficult job like engineering, or any other hard science when you can take it easy? why should we ask our children to become doctors, nurses, scientists and other professions that are severely in need? it’s just too hard! that we’ve gotten lazy is not bush’s fault.

i know a little bit about the h1b visa process and it is hell to go through. Getting someone through the process is not easy. The gov’t has enough bureaucracy in it to make you pull out your hair. Believe me, corporations do not want to go through the h1b visa process, but the other choice is to leave those jobs vacant because there’s nobody else who can fill it.

[michael]

The executive branch of goverment has nothing to do with monetary policy – only fiscal policy. Even if the Bush administration wanted to, they couldn’t print a single dollar. The Federal Reserve is reponsible for that function. Get your facts straight. The Bush administration had nothing to do with this housing bubble.

And yes, I do support the Bush Administration wholeheartedly!

[blahblahblah]

Believe me, corporations do not want to go through the h1b visa process, but the other choice is to leave those jobs vacant because there’s nobody else who can fill it.

Raise the salary and Americans will be lined up around the block for those jobs. We have good engineering programs here in the US, but kids don’t choose engineering as much as they used to because the pay is viewed as being not that great, layoffs are very likely, and yes, it is very difficult. Of course medical school is also very tough and yet there is never any shortage of applicants. What’s the difference? That’s right, it’s the salary and also, doctor’s jobs are viewed as being more secure (although that will probably change someday too).

This same argument is used to support illegal immigrant labor. Americans are too stupid|ignorant|lazy to pick strawberries, so we have to hire illegals. No, Americans simply refuse to do difficult manual labor under hazardous conditions for very little pay. As for engineering, Americans refuse to endure 4 years of a grueling undergraduate program so that, if they’re lucky, they can get an entry-level engineering position and then get axed in the first layoff.

[bjensen]

I am the equivalent of a long time listener first time caller but I just had to jump in on this one. I recently moved to California after being gone for school for the last couple years. In the meantime I got my bachelors, got married, and am expecting my first child.

Although I make around $80,000 out of school working for a large telecommunications company and my wife also works in finance we are completely priced out of the market. With an income that many envy we couldn’t even afford a tiny condo following traditional lending standards!

Although we are savvy and know better than to buy at the top of the biggest housing boom in history, I can’t help but feel that current home owners are being selfish. They are too concerned with protecting their enormous gains to consider that they are effectively handicapping an entire generation. All the while explaining everything away saying that our generation wants everything now.. like a salary large enough to afford rent and have money left over to buy a little food! Sure there are people that mooch off their rich parents forever…but not all of us. Some of us work and pay our way through college and work long hours to make the ends meet.

Do homeowner “deserve” these gains or were they in the right place at the right time for a huge windfall profit? If we want windfall profit tax for big oil, maybe we should enforce a windfall profit tax for big property owner, no?

Now I don’t want anyone to get me wrong, I wish I was in the position of someone who’s starter home is now a million dollar mansion. If I was older I would love selling off now and handing the gains to my wife who has a history working for Goldman Sachs and other investment banks so we could build a massive fortune.

The point is everyone is so concerned with propping up the price of a home to protect people from their mortgages and at the same time love to write news article about my generation’s “failure to launch”

Well I don’t live with my parents and I have a real job. I rent a one bedroom in a forty year old apartment in Tustin, CA for more than my parents mortgage. My neighbors are young lawyers, investment bankers etc.

Good money in southern California just isn’t good money right now. Can’t wait for the crash.

[ucodegen]

Raise the salary and Americans will be lined up around the block for those jobs. We have good engineering programs here in the US, but kids don’t choose engineering as much as they used to because the pay is viewed as being not that great, layoffs are very likely, and yes, it is very difficult.

Fascinating comment.. I am one such engineer, salary $100K/yr +, not including company copay/contrib into 401K.. I think you have the facts warped. During college classes, 56hour straights were not uncommon. Not everyone wanted to do those. In general, those who study hard work hard are painted as idiots, losers, geeks and nerds. The Kiyosakis, Trumps, Casey Serins of the world supposedly have the way to make money. Little work and concentration with the right spin would make a lot of money for you…

Compare how education to get ahead is viewed in countries like India, Thailand, Japan, China.. and compare against the views in America. “American Idol just because you can sing and dance..” makes me sick.

[ucodegen]

Although I make around $80,000 out of school working for a large telecommunications company and my wife also works in finance we are completely priced out of the market. With an income that many envy we couldn’t even afford a tiny condo following traditional lending standards!

Be patient, build up cash and wait. You may want to look at investing in offshore companies with the cash. (dollar is likely to devalue). Many sellers are holding on hoping for a bailout. The problem is that they are against a wall. 100% financing means that they will have to sell for losses AND get a 1099 for loan forgiveness (which is taxable.). Banks have to approve the short-sale, unless the seller can pony up the cash for the difference (not likely if they used 100% financing).

[Anonymous]

BJensen’s remarks are right on the money. It is an unfortunate situation when you have young, highly educated lawyers and finance professionals with wives who work who can’t afford to live in a simple single family tract home in Tustin, CA. At the same time, there is no shortage of surfer bums, cashiers and part time realtors who ‘got lucky’ and bought years ago near the beach in cities like Encinitas, perhaps don’t even have a mortgage, and will not hesitate to tell you how smart they were to have paid 120k back in 1985 for their home that is now worth 900k.

To all on this thread, have you read the book by Thomas Friedman called The World is Flat? To the original poster, I suggest that you make this book required reading for your college students, or at least give them extra credit if they read it! Seriosuly, you will look at the world, the job market and the future of our country in a different way after you read this book. A few points from the book and my own experience in high technology consulting.

First, not all jobs are able to be outsourced, and in fact some of the best positions that cannot be outsourced require expertise in engineering. We have, and will continue to lose many middle class jobs to Indians, Chinese etc. who can do the job cheaper, better and faster. However, many more positions will also be created here – jobs that will require a different expertise. Instead of maintaining a database, you might have to focus on being the guy who sells Indian database software to American companies. The scary thing is that there really is no way back. Your students can look forward to competing with 1 billion super smart Indians and Chinese students who are chomping at the bit to gain wealth and our lifestyle, and this will require that your students think of their future in a whole different mindset. At the same time, this is 1 billion more customers with money that will buy our services and products. Having said this, here are a few careers that are sure bets the next 25 years, regardless of what happens with outsourcing:

-Doctor, nurse etc. – There will be a huge need for health care workers who are local and cannot be outsourced. Some aspects of health care will be sent overseas, but many high paying ones must remain personal, face to face.

-Military officer – Captains 4-5 years out of college can earn close to 65-75k a year, and at the rank of major you can pull 80-90k a year. Dangerous, exciting, travel the world and come back and get leadership jobs in sales, running a Home Depot, or any range of companies who hire former military officers. Stay in and at age 43 you can get 50% of your base pay starting the day you retire! Best pension plan in the world.

-Engineering – Huge shortages, great pay. Computer engineers in Carlsbad can make 90k+/year 4-5 years out of school, right? Well, they can also make that in Austin, Denver, and othe places where they can afford to live. Get a law degree on top of this and you are golden in IP law.

-Sales/consulting – Sales engineers who know the technology but also interact with the customer, work the business side and build relationships are golden and can make 90+ 4 years old of college easy. Combine a EE with an MBA and you can be the rare engineer who is people savvy, businees minded and able to see the big picture.

-US Government – Very stable, unlikely to ever be fired (although not quite as much a sure thing as in the past). With 7 years of experience and a college degree you can make 75k/year as a GS12, get great benefits, work 40-45 hours every week, and not worry about your future. And, 50-75% of the governments 1-2 millions workers are eligible to retire the next few years. 10 years experience, at GS13, you are looking at 100k+ in big cities like DC.

[Anonymous]

As for engineering, Americans refuse to endure 4 years of a grueling undergraduate program so that, if they’re lucky, they can get an entry-level engineering position and then get axed in the first layoff.

Yes, layoffs occur in almost every profession, should that scare anyone from getting a job? I’m an engineering professional, never been laid off, but yes, I have laid off a few due to the fact that we experienced unprecedented growth (we went from 30 to 90 engineers) and we could not sustain it. We laid off 6 engineers out of the 90 we had, one I regret (the others were poor performers), but ALL have already found jobs. Coming off of college you can expect to make 50-80k depending on your skill, experience, and negotiating skills.

No job is permanent unless you are in a gov’t classified position. Employment in CA is at-will and you can get fired, laid-off anytime.

Anyway, we do not outsource, but we do have a hard time getting good engineers. Enrollment in all the local universities is down in computer science and engineering. In fact, in one university it is down by 50%. This forced one of my recruiter friends from another company to outsource. He employs 100+ engineers every year.

Now my point… engineering is a great profession. Of any four year degree, engineering and nurses make the most in general. Don’t avoid a job because you are afraid of getting laid off. That’s letting the fear get to you.

One more thing, my sister is a doctor (MD AND PHD), I make more than her even though she’s been a doctor longer than I have been an engineer (I have a BS in EE and MBA). Engineering is a great field. Even if you get a BS in an engineering field, it will help you in any job. Since you survived a tough degree, any job will appear do-able.

By the way, we pay interns anywhere from $17-25 an hour. Imagine being a sophomore in college and making $17 at the age of 19 or 20. Then when you are 21 or 22, you can make about 50k at least.

[kewp]

Bjensen,

You sound a lot like me before I found this blog!

By the time I had gotten myself in a position where I felt I could buy property, I found myself simply priced out. And I make, by myself, above the median household income for San Diego.

I, at first, was somewhat bitter about the whole affair, but after some introspection the logical side of me took hold.

“Well”, I said to myself, “If I make above the median, and I can’t afford a home, who/what is fueling this boom?”

My quest for answers led me to this blog and ultimately being at peace with renting. Find a rental you are happy with; save, save, save and just wait this mess out. You may feel you are in bad situation now (and we are), but things will come around.

And when they do, you will have the cash and good credit to take advantage of them, instead of an interest-only-albatross around your neck.

[North County Native]

Sometimes I wonder if in my own personal situation, if I too will be priced out of the market forever.

I can understand those feelings of being hopeless as a college student! They should choose wisely on what major to choose – not some easy major because it is easy.

My husband graduated last year from CSUSM with a degree in Computer Science – one of 19 other graduates (I just looked through the commencement booklet to count them). There are hundreds of Business Administration majors in the commencement booklet! I know that it is a good school for business but what my husband noticed was that a lot of people don’t want to take the time to take the extra lab classes, more science classes and the higher math.

He would’ve been done with school a lot sooner if he had chosen to do business however, the subject matter didn’t interest him and he loved the classes that he took for computer science – even all of those very hard classes– because he learned something!

I really admire my husband because he is one of the few people I know who has a great work ethic. He worked 40 hours a week, went to college full time and graduated cum laude. The whole time he was going to school, he worked for Kinko’s as an assistant manager and had to deal with rude people everyday. On his measly Kinko’s salary, he was the sole supporter of our family – we had 2 children while he was in school and I have stayed home with them since they were born. He worked for Kinko’s because the hours worked well with his school schedule and we needed medical benefits. There were days that he was totally exhausted but he just kept on going! We even had a very scary illness happen to one child and a neurological disability diagnosed in the other child during this time period. It was a huge sacrifice that he made for our family and I’m so thankful for his mindset!

Now he will be going back in the fall for his Master’s in Computer Science. He isn’t getting paid a whole lot right now but at least we are getting out of debt and not living paycheck to paycheck anymore.

He feels bad that he can’t give me a house to raise our family in. I just tell him that I’m thankful to be home with them. We are having our third child soon and we will be a little bit more crowded in our apartment but I’m thankful that my kids have great parks to play at!

We hope to be able to save enough to have 20% down on a house when we want to buy. We hope that prices will go down, as we know so many people in the same situation as us. We’d hate to see the economy tank with the housing market. Someday we’d like to own a modest home with somewhat of a yard. We’d like to stay here because this is where both of our families are.

I do feel a bit of that hopeless feeling however, I am so happy that my husband isn’t working that old job – that he loves his job that he has now and that I see him a whole lot more! He doesn’t have to commute either, he walks to work. For me, working is not an option. I refuse to have someone else raise my children for me.

I also realize that we are not entitled to anything! Just because he was a great student doesn’t mean he’d get great pay as soon as he graduated! In time the pay increases will happen. We might look like fools – having kids while he was still in college however it made us budget and try to live within our means as best we could. If we could make it through with kids, we will be able to make it in the long run! I’m glad that I wasn’t bringing much income in before the kids, it would’ve been more of a shock to stay at home with them.

I’d tell the students to not be hopeless! If they work hard and perserve, they can make it. They might just have to cut out cable t.v. (we did that, still don’t have it) and do without many of the finer things in life to get where they want to go. Things happen in life that can’t be planned for (such as illnesses and having children with a disability) and these things can happen during college as well. I’d encourage them to stay in school, despite what else is happening in their personal lives.

[Anonymous]

Interesting ni-ban,

I think that the dot com bust and outsourcing caused many people not to pursue engineering and computer science degrees. The story that hasn’t been told is the one that you just related – there are great paying jobs in engineering, a huge lack of US engineers, and great future prospects. Anyone who is worried about job security can also pursue military/defense contractor oriented work. Many of these positions require security clearances that foreigners cannot obtain, and these jobs cannot be outsourced. EG: Viasat has a defense side and a commercial side. I hear that the commercial side has alot of foreign workers, but the defense building is all US citizens. And the government is always hiring as well.

[Author]

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