Financially, Stephen and Arlene Lagos were already having about as rough a time of it as they could handle when Stephen’s car broke down.
“We didn’t know what to do,” Arlene says. “We couldn’t afford the repairs right away. How were we both going to get to work?”
Stephen mentioned the troubles they were having while chatting with Josh Mueller, a family friend for whom they frequently babysat. Josh proposed a solution. “I usually ride my bicycle to school and work out of choice anyway,” Mueller says. “So we had an extra car just sitting in the driveway. Why not let them get some use out of it?”
Loaning the car to friends in need was an easy decision, according to the college student and bartender. He and his girlfriend had long appreciated the willingness of the Lagos family to watch their daughter when work schedules necessitated, and they were just happy to be able to return the favor.
“He said, hey, we’re not using the car, you need it, and you’re helping us out with child care,” Arlene recalls. “So it was a win-win situation for everyone.”
The simple commonsense of the arrangement set Arlene’s mind in motion. She wondered how many lives could be made better if it were easier for people to connect to one another and lend each other a mutually-helping hand?
So Arlene, who is working toward her master’s degree in counseling psychology, began laying the groundwork for Back on Track Charleston, a grassroots nonprofit organization helping people whose goals have been derailed by the current economic unpleasantness to get, well, back on track. And bartering services is at the center of it.
“People think that if they don’t have money or a job, that they have nothing to offer,” she says. “This simply isn’t true. Everyone has skills, talents. Everyone has experience doing something that could benefit someone else. That’s what this is about: getting people to think creatively about what they really need and what they can offer to others in exchange.”
Back on Track Charleston, founded by Arlene Lagos, Stephen Lagos, Patricia Smith, Michael Tapp, and Jason Beers, is currently set to launch in January 2010. The group, which is already actively reaching out in social media such as Facebook, plans to help those in need identify their own skill sets and match job opportunities to those skills. It will create a volunteer pool, offer assistance with resume writing and interviewing techniques, and help connect people with other resources in the community.
“There are plenty of folks sitting in front of their TVs waiting for their country to help them,” Arlene says. “What they don’t realize is that they have everything they need to help themselves.”
In other words, to receive, you also have to give. If you are in need of assistance in maintaining your lawn, for example, you must also be able provide another needed service in exchange.
“What we envision is a volunteer pool of people who can perform various services: people who can cut hair, people who are willing to give others rides to work, people who can do general repairs,” Arlene says. “There will be accountability. If someone is consistently not holding up his or her end of the bargain, they will no longer be eligible for services.”
Bartering, of course, is nothing new: as far back in history as we care to look, people have been exchanging goods and services. The basic idea is that, regardless of whether we are paying for goods or services with cash, credit, or barter, what we are really putting a price tag on is our time. When the economy is robust, we’ll weigh how many hours we’re willing to work in order to own the latest new game system. But when times get rough, we ask ourselves how many hours we need to work in order to keep a roof over our heads and food on our tables.
That’s another part of getting back on track, financially: coming to understand what aspects of our lives are crucial and what can be trimmed back to free up resources for the important stuff.
“Bartering allows you to save finances for other things,” she adds. “You probably aren’t going to be able to barter with your bank on a loan payment, but haircuts, child care, or maybe even getting an out-of-work mechanic to put a new alternator in your car for you may be things you can negotiate.”
There are numerous benefits to bartering for goods and services when cash flow is down to a trickle. It can be a way to stay in business and even a means to establish valuable new social and business connections during lean times.
“From a historical perspective, the idea of bartering certain goods or services for other goods or services is particularly prevalent in times when monetary cash or cash equivalents are low, relatively low, or held among a very few individuals,” says Laquita Blockson, assistant professor of ethics and entrepreneurship at College of Charleston School of Business and Economics. “You can go all the way back to when commerce first began.”
According to Blockson, who’s also known as “Business Renaissance Guru,” “We’re now experiencing another spike in bartering, very similar to, if not more than, what we experienced right after 9/11. There are advantages for businesses, especially small businesses, when they are having cash flow issues. It can be a good way to share what you have and gain assets that you need which you otherwise might not have access to, as long as you remember that as a business owner you do have to report the exchange for business income purposes.”
For bartering to be effective, there must be what economists refer to as a double coincidence of wants, i.e. someone who has something you want must also want something you have.
Some career fields are naturally symbiotic and handle this quite easily: photographers, makeup artists, and models are classic examples. Early in their respective careers, shutterbugs need pretty people to show off in their portfolios, while models and makeup artists need professional quality pictures of themselves or their work for their own portfolios. It’s a win-win situation.
Other artists, such as painters, also enjoy the benefits of bartering, trading family portraits or similar works in exchange for goods and services needed to keep their studios running.
This demonstrates another key benefit of bartering: it provides an opportunity to continue building experience and exposure in a career field during times when paying customers are scarce.
“Bartering is a way to enhance your skills while also letting businesses or the public know what your skill sets are,” Blockson adds. “Once people start to see value in what you have to offer, it might even lead to you starting your own business or being hired by another organization.”
One of the trickiest points in bartering, however, is establishing a common measure of value. How many haircuts from JoAnne is an oil change from Bobby worth? Are five hours of landscaping from Dan worth more or less than five hours from Harriet? Does receiving a year of free-range chicken eggs from Jill really merit the time it will take to build a website for her business?
These are all questions that must be asked, and a large part of Back on Track Charleston’s raison d’être is to not only serve as a resource for making these connections between individuals, but also to help work out some of these nagging questions.
Bartering is by no means the only way that businesses and individuals are coping with tough economic times. Many have found a sweet spot in collaboration.
Susan Lucas of King Street Marketing Group notes that many of the retailers she works with have discovered the power of partnering. “The whole concept is that by combining our resources, we can reach out to more customers and we all benefit,” Lucas says. “Working together just makes sense.”
As the holiday season goes into full swing, retailers in close proximity to one another — for example, Bits of Lace, Croghan, and Hampden or Charleston Power Yoga, Butterfly, and Lessene — are organizing events such as men’s shopping nights designed to boost foot traffic to an entire section of the street, rather than just to one individual business. “The exciting part is that this move toward collaboration is just naturally occurring,” Lucas adds. “It’s happening because it just makes sense.”
So why has bartering and collaboration become so attractive in recent months? The swiftly tilting labor landscape is probably a good place to look for an answer. The simple ways in which we’ve traditionally earned our daily bread are not so simple in the world of the here and now. As Pulitzer Prize-winning author Thomas L. Friedman so elegantly summed it up: we are now living in a hot, flat, crowded place.
The old model of the American worker who gives a single company his or her loyalty for 30 years or so and is rewarded with a gold watch and a pension slipped away many years ago. Today individuals are much more likely to not only step across several career paths over a lifetime but also hustle as much extra juice on the side as they are able. The plus side is that with the economic terrain constantly shifting, the possibilities for adding supplemental income to one’s plate are limited only by imagination. Physicians becoming eBay Power Sellers in their part time, teachers tending bar after hours, and techies photographing weddings on the weekends — it’s all part of life in the U.S. in the early 21st century.
“Because there are fewer opportunities for employment, a lot of individuals are becoming more and more entrepreneurial and creating their own ways of income generation,” Blockson says. “People who may have thought about pursuing this kind of creative venture are now feeling the push. They’re using this as an opportunity to create a niche for themselves.
According to the latest numbers from the U.S. Department of Labor, unemployment is still at an uncomfortable 10.3 percent (Oct. 2009) nationally despite increases in productivity. In South Carolina, unemployment is 12.1 percent, according to the State Employment Security Commission.
There is nothing new about Americans working harder and harder while earning less and less: we’ve been doing exactly that for a very long time. Because of this, a growing number of people have already rolled up their sleeves and started doing whatever they can to put their own houses back in order. There is good news and bad news in this.
The obvious point is that hard work is how anything gets done. A consistent theme in stories of highly successful people is that they generally don’t stop: they wake up early and stay up late, begin, complete, and move on to the next project, one after the other.
But the flip side of more and more people willing to work harder, for longer hours, and often in positions that they are overqualified for is that it leaves fewer opportunities for employment available to younger and lesser qualified individuals.
Consider this: the unemployment rate for teenagers is at 27.6 percent, according to the same Dept. of Labor report; this represents a third straight record high for that figure. When unskilled labor jobs are being snapped up by those who are arguably quite skilled, it does not bode well for those just starting out in the labor force.
These kinds of economic indicators are a tough knot to untangle individually, but for Arlene at Back on Track Charleston, all this just speaks directly to the increased need for networking and cooperation between individuals and businesses.
“Persistence is great, but it needs to be targeted,” she says. “Okay, you have a résumé, but is it the right résumé? Does it make sense in regards to your skills and the kind of employment you’re seeking?”
The organization hopes to eventually have a help center where like-minded individuals can meet, learn, and share information that will mutually benefit all involved. “A lot of information is available on computers, but it can be hard to sort through,” she says. “And some groups, such as the Baby Boomers, may be less comfortable with computers.”
Having a center would also help facilitate initial meetings between individuals in the envisioned volunteer pool. “Before someone comes to cut your grass or paint your house, it is not unreasonable to want to sit down with him or her first in a neutral location, to establish whether or not you are comfortable with the exchange.”
While having a help center is a long-term goal for the fledgling nonprofit organization, Arlene and the rest of the group hopes to help Lowcountry residents get back on their feet as soon as possible by identifying personal skill sets, building mutually beneficial relationships through a volunteer pool and other networking efforts, and helping individuals recognize their own capabilities.
In many ways, that emphasis on helping individuals recognize what is inside them reflects the heart and soul of Back on Track Charleston.
Helping people who want to work find work in general is important. Arlene will grant you that. But she’ll also stress the need for each of us to really look deep inside and figure out what it is that we personally can offer. That kind of self-inventory offers insight not only into which skills we possess that are most beneficial to others but which kind of work or workplace will best mesh with our personal circumstances and make us feel best about ourselves.
“Finding work that is a good match for you is important. Your workplace is where you are going to be spending at least a third of your time. If you aren’t happy there, that’s a huge chunk of your life spent feeling unhappy.”
For more, contact:
Back on Track Charleston
DON’T FORGET THE IRS
Even if no money changes hands, the IRS is still interested in the fair market value of the goods and services you barter.
Depending on the nature of the transactions involved, the fair market value of what was bartered may be considered income, gains, or losses and need to be reported as such. As with most things tax-related, good record-keeping tends to be the key to avoiding trouble. When in doubt, give an accountant a shout.
“For non-business owners who occasionally exchange personal services — babysitting, lawn mowing, etc. — that kind of event is not usually a big deal from a tax perspective,” says Laquita Blockson, assistant professor of ethics and entrepreneurship at the College of Charleston School of Business and Economics. “But if it becomes regular, not once in a while, that’s the kind of thing the IRS would want you to be cautious about or at least cognizant of from an income generation perspective.”