In 2001, I was a new teacher. I got laid off two years in a row. In 2009, I was a new principal and we cut staff by 20%. I wish I’d been better prepared in both cases and want to share what I learned in both recessions. Hopefully, it can help you ride out the coming downturn.
Table of contents
- Learning From Experience
- Recession Time Lag In Public Education
- Impacts Vary
- Who Gets Hit Hardest
- What You Can Do
- Personal Financial Steps
- Career Actions to Take
- Options If you Do Get Laid Off
- Summary – Take Action to Ride Out the Recession
Learning From Experience
We are in the midst of Covid 19 lockdown and schools everywhere are closed. We’re all working on providing stability and support to our communities in any way we can. I want to write about hopeful things, but feel compelled to publish this post.
Why? Because you, as an educator, may still have time to prepare.
Educators often experience a strange lag in recession impacts. I’ve experienced two severe downturns (2001 and 2008-09.) Both were painful, scary, and had very real financial impacts on educators.
If I’d understood it all better, I may have been able to help myself and others. Here’s what I’ve learned about recessions and how they impact our profession.
Recession Time Lag In Public Education
Public education experiences a time lag in the impact of recessions. Other professions typically experience layoffs first and the economic slowdown is well underway before educator jobs are impacted.
This is because government budgets, both state and federal, are set in advance and follow fiscal years. These budgets are adjusted AFTER the economic impact has already been felt and tax revenues have declined. In some instances, states may make mid-cycle reductions. However, in general most of the impact will be felt in the following fiscal year(s.)
To provide a personal example – in my state the worst impact of the early 2000s recession happened in fiscal year 2003. My first year of teaching was 2001-2002. I was dropped at the end of that year, but rehired in August for 2002-2003. Then I was RIFed again in June of 2003. If you’re asking “What is RIF?” – know that I was too even as it happened!
In 2009, the job losses continued for several years, resulting in over 300,000 education jobs being lost over several years – despite the recession officially ending in 2009.
That Time Lag Is Dangerous
The benefit in having a lag in impact is it gives us time to prepare. However, for those educators who haven’t been through this before it may seem like everything is fine.
I see many educators right now talking about how fortunate they are to still have a job. This is true! It’s great to recognize the incredible good fortune of continued employment in a time of crisis.
It can also provide a false sense of security. In 2002, a fellow new teacher bought a boat because she still felt secure despite the recession. One year later, the full economic impact hit our schools and both the boat and her car were repossessed. I say this not to shame, but to illustrate the danger in the delay.
There may be a lag, but our jobs are still (very) sensitive to recessions.
What’s Different About 2020?
They say there is a “this time is different” vibe to every recession. I remember the pervasive fear during the Great Recession, Many people thought it was the final collapse of the economic system.
I hear many of the same discussions now. I can’t predict the future, but I try to learn from the past.
For educators though, the time lag aspect may be different. Our schools were closed on the front end of the economic impact.
However, many educators are still being paid during this time. For those of you in that circumstance, you have time to prepare while others have lost their source of income immediately. Don’t squander that.
This post is built on the idea that you can still take action and prepare. However, it is important to recognize that some of our colleagues lost their income immediately. This is not meant to shame or taunt those who didn’t have time to prepare. I apologize that I wasn’t more helpful in advance. Use what you can, and know that my thoughts are with you in an incredibly unstable time. I’m sorry and hope we come through this quickly.
There are several factors that influence how, or even if, you’ll feel the impacts of the recession as an educator.
Education budgets are set at the state level. Federal dollars matter, but are a small percentage.
The impact of a downturn on a state’s education budget can be impacted by several factors, including:
- Diversity of tax sources (look at the much deeper drop in income tax!)
- Budget priority placed on education
Similarly, the same may be true at the district level.
As a result, the impact of a downturn may be more intense in one state, or district, than another.
State budgets make up the majority of education funding, but federal dollars still have a large impact. The actions the federal government takes to either shore up state budgets or provide direct action to support education can change the impact.
In the early 2000s, there was little federal action. In the Great Recession, federal stimulus funds mitigated (but certainly didn’t eliminate) the damage in many states.
The duration of an economic downturn will also determine how painful the impact is.
There are those who think the Covid-19 recession will be sharp but short. The theory is that once shelter-in-place orders are lifted, economic activity will jump almost as sharply as it fell. If that’s the case, it may just be a single budget-cycle impact.
I’m not convinced. But, again, I can’t predict the future. All I know is that there will be an impact, and we should prepare.
Who Gets Hit Hardest
The most painful part of a recession is it hits those who are least prepared – newer educators.
In most places, the layoff process is based on licensure and seniority. That means, if positions are limited, educators with more experience and the correct licensure will be retained, while those with less experience will be cut.
In 2003, reductions in my area hit teachers in their first two years of teaching. The Great Recession led to RIFs up to 5 years deep. Yikes. Administrators in their first few years, or entry-level positions also found themselves jobless.
Positions that aren’t “core” subject areas (typically those required for graduation or accountability) are also vulnerable. Reading, writing, and math will be protected at all costs at all levels. Music, PE, and art…not as much.
Similarly, administrators overseeing smaller specialized programs not supported specifically by grants are most vulnerable.
What You Can Do
It’s a powerless feeling when school budgets shrink during a recession. You have little or no control over the budget and staffing decisions. Many districts will implement furlough days and lower your pay just when you need it most.
However, you can take steps to position yourself to ride out the recession. I’ll break these into financial moves and career moves. They might not all be applicable to you, but do what you can. I want you to stay in education and thrive after this is over.
One thing is always true – recessions end and the world needs good educators.
Personal Financial Steps
Cut Expenses Now
If you are fortunate enough to still be paid despite school closure, don’t assume this will continue. State decisions could change as the closures go on. Even if it holds, budget reductions are likely coming.
Start cutting any non-essential expenses now. If you lose your job, you’ll have set a leaner floor and built a cash cushion.
Look for non-essential subscriptions and luxuries you can do without. Hold back on that big purchase you had planned. Take any travel refunds and bank them.
In 2003 we both lost 10 days of pay due to budget cuts. I was RIFed at the end of the year. We cut our expenses to the bone and barely made it to our first paycheck in September. Whew! If I’d been more aware, we could have reduced expenses earlier and had a little more cushion.
Even if your income never drops, you’ve created some extra savings. That’s not a bad outcome!
Build An Emergency Fund
If you’ve already lost your job – ignore this section. There is no more maddening advice than hearing “have an emergency fund” after the emergency.
However, if you are still earning and have cut back to only essential spending, the first thing you should do is build that emergency fund in case you get laid off.
If you don’t have at least 3 months (I prefer six) of expenses saved up, start now. It makes all the difference. You might not have time to grow it that large, but any amount will help.
Do what you can to build up that cash cushion, It will give you flexibility in good times, and security in the bad.
Seek Other Income Sources (not easy)
Much like saving more, it never hurts to earn a little extra. Any income you bring in now can go to that emergency fund or additional cash to ride out the downturn.
I also want to acknowledge that the midst of a crisis and an economic downturn is not the easiest time to find extra income opportunities. Potential suggestions during the Covid closure include food and grocery delivery. These may not be options given your health.
Consider Suspending Any Retirement Contributions
This is not a move I suggest lightly. I believe in the power of starting small and building over time. If you don’t have an adequate emergency fund and little room to cut expenses, consider suspending retirement contributions for a short period of time.
Yes, long-term investing is very important but you also need to ensure your short-term security. When you know the recession is about to hit you, you can make that informed choice.
Just please be ready to restart them as soon as you’ve ridden out the worst of it.
Career Actions to Take
There are also several career actions that will increase your chances of holding onto your job and primary income.
Understand Your Contract
I always recommend that every educator reads their contract or employment agreement. It’s important to your overall financial health.
In a recession and layoff scenario though, it’s critical that you understand your contract. You shouldn’t assume your human resource office will get their decisions right, and your union might not even notice (or choose not to act.)
Review your contract and understand how layoff decisions are made. Know what options you have or moves you might be able to make to avoid layoff. Ask questions of your association (if represented) and human resources office.
Add Endorsements To Your License
Sometimes teachers don’t add an endorsement for fear they may be transferred into a position they don’t want. Special education is one common example. However, in a recession the ability to take a different position may be the difference between being employed and jobless.
If you are eligible for other endorsements, add them to your license immediately. (Unless you really don’t want to teach the subject.)
During the 2009 recession, as a new principal, I had to lay off two teachers that would have been eligible for open positions based on endorsements they’d already earned. Unfortunately, neither had added the endorsements to their license and HR processed the reduction-in-force.
One was able to get the endorsement added and got called back into a position prior to the start of the new school year. The other had to wait a full year before a qualifying position became open.
Get New Endorsements
If you are only endorsed to teach a single subject or level, consider using this time to add a new endorsement. Maybe you just need a few classes or to take an assessment. Or, you could start a program now to help you get hired back more quickly. Online classes are still running!
The more things you can teach, the more likely you are to hold onto your job during a downturn. Even if you are laid off, you’ll have more options to find an open position.
Prioritize those positions you know are most in demand. Don’t add high school English or social studies. I still have agonizing memories of hiring at a job fair in 2011 and having dozens of high school social studies teachers seeking non-existent positions.
Math teachers (especially middle school), science teachers, and special educators, and those with English language endorsements will always be employable.
Don’t get an endorsement you’d hate teaching, but consider those you might.
It’s not easy in a time of uncertainty to be flexible. Those who can will thrive. If you are able to fill in an undesirable position or take a part-time opening for a while, do it.
During a downturn, school districts will work to carve out positions and protect their educators in any way they can. During the Great Recession, the federal stimulus created a bunch of new teaching jobs that weren’t directly in the classroom. This enabled us to save dozens of jobs, but pulled people out of their comfort zone.
Your colleagues and administrators will notice those who are willing to make adjustments to help others. They’ll fight for you and do what they can to keep you on board. Worst case, you’ll be the first one they hire into any future position.
Related Post: Why Do Principals Move Teachers Around?
If you aren’t vulnerable, but can change grade-levels or subjects to help a colleague hold onto a job, do it if at all possible. I once worked with a teacher who could have prevented a layoff by moving into a specialist position. She refused as was her contractual right. A new teacher was laid off, and the specialist position went unfilled for six months. It was her right, but painful to watch.
Retire If You Can
Similarly, if you are financially able when the downturn hits, consider retiring. You will enable a newer educator to hold onto their job. If you still love teaching, you’ll have plenty of options to work in schools.
Sometimes, districts will even offer retirement incentives – look out for that opportunity.
If you are unhappy in the profession but okay financially – please retire. There is nothing more painful than watching a young and enthusiastic teacher lose their job while a colleague who clearly hates the profession hangs on.
Not everyone can make this choice – but if you can, consider it.
Options If you Do Get Laid Off
No matter how much you prepare, how many endorsements you have, or how flexible you are it may still not be enough. Instead of waiting around for your job to come back (and it will!) you might look overseas.
International schools have different budget systems than public education in the United States. If you fit the criteria and are willing to be flexible (there it is again!) you may be able to land an international teaching job. Teaching abroad can be fulfilling and financially rewarding.
Be Willing To Substitute
Even during an economic downturn, people take leave or get ill. Should you be laid off, working as a substitute is a great way to generate income until you are called back or find an open teaching job.
If you’ve built good relationships and shown an ability and willingness to learn, your colleagues and principal will ensure you’re used whenever there is a need. You’ll get long-term jobs. Don’t forget to use these opportunities to get good letters for recommendation for a teaching position.
It’s not ideal, but it’s a way to continue earning. You’ll also be front-and-center in peoples’ minds should a new position open up. In both previous recessions, I had colleagues who stayed busy and were called back early by substituting.
Summary – Take Action to Ride Out the Recession
A recession is coming. That is always true. As an educator, you’ll often have more advance warning than other professions due to the nature of the government budget cycle.
I wish I’d understood these things earlier in my career. By preparing yourself financially, and taking specific career actions you will be better positioned to survive this downturn. Then, you’ll be ready to thrive.
We need great educators in the profession. I want you to survive this downturn and stay in the career you love.
What else have you done, or are you doing, to prepare for the inevitable economic downturns that rock our profession?