What Jobs Are Considered As Recession Proof?

The safest haven

(1) Teachers & lecturers. Whether the economy is performing or not, people will still need to attend colleges & universities. In fact it could be argued that in economic downturn, parents are more concerned with their child’s education. This is because once the economy recovers there will be stiff competition for jobs in the market & the only way for young people to market themselves is non-other than having at least a basic degree

However you could argue that lecturers for professional courses such as CFA, ACCA, CPA etc could be out of job. Most who pursue these courses are professional bankers. Since many are out of job as in US case, probably they will stop attending. Furthermore the fee is not cheap

(2) Economists. Strange but true. Demand for economists will always be there & perhaps in current period it will go up. We need economists to explain about the mess in Western financial institution, whether free-market had failed to function, why US dollar appreciates despite its economic woes, why Malaysia is unlikely to fall into recession in 2009 etc

(3) Doctors. Whether good times or bad times, as long as you don’t feel well, you need to go to your doctor

(4) Corner shop restaurants. In recession, people will choose to eat lesser at fine dining outlets. This is based on the argument of YED (income elasticity of demand). For luxury goods, a slight fall in income will cause its demand to fall greater than proportionate (YED more than 1). In fact they may turn to have their meals at corner shops & other cheaper options

High risk of unemployment

(1) Remisiers. Recession & plunge in stock market normally come together, unless it’s just a market correction. This is the period where investors shy away from the financial market. Share prices continue to fall due to loss in confidence, herd mentality of investors, companies making losses & other form of bad news. Remisiers will probably choose to quit, since there will be much lesser people buying shares which translate to lower commissions

However, one can always argue that there are so called value investors, people who think that the best time to invest is non-other than when share prices had reached rock bottom. But these investors are rare breed

(2) Unit trust agents. These are the people who market the trust funds for financial investment companies. In US we have Michigan Interfaith Trust Funds, California Investment Trust Fund Group etc. In Malaysia we have like Public Mutual, MAAKL, Pan Pacific Mutual etc. The prices of unit trust funds are strongly correlated with the performance of underlying stocks. As stock market plunge, so does the price of these funds. Agents will find it extremely difficult to persuade people to invest. More over, who wants their hard earned money to be swipe overnight?

Again you could argue that there are some conscious investors who would jump in & invest at low prices. The process of doing so is called dollar cost averaging, which means lowering down the overall costs of investment by the way of averaging

(3) Real estate agents. Same like the former 2, property market will grow very slowly. There will be much lesser new firms coming up. Also people will be more reluctant to buy property due to job insecurities

(4) Car salesman. In the period of economic uncertainty, demand for cars will fall. People are afraid to take up huge financial commitments, the same argument for buying property. As a result sales will decline drastically resulting in lower commissions. Depending on how severe & how long, those who are unable to remain that way will choose to exit the field. US auto industry is an excellent example. I’m not sure how many have suffered from job losses due to the ‘dying’ GM, Ford & Chrysler alone

(5) Airline industries. Demand for foreign travel is income elastic in demand (having YED more than 1). Now, as people feel poorer, they will demand much lesser of international holidays & perhaps choose to travel domestically. We may witness more retrenchment such as site inspector, maintenance technician, customer services etc

(6) Hoteliers. This is due to the negative spill over effects from poor performing airline industry. Hotel industry which is very labour intensive may begin a large scale retrenchment scheme. However one could always argue that most of the jobs created in hotels are part-time based. Therefore, on-and-off employment is expected especially during summer & after summer holidays. As such employment is not that affected