In recent years we have all lived through some tough economic times; in more recent weeks we have seen the downgrade of the United States credit rating as well as the downgrade of two other major French Banks.
Being downgraded for a small business can be extremely devastating to their future sustainability, but is the downgrade of a big country as big of a deal? If a country is downgraded it will not stop running and the residents will not stop living their. However, being downgraded can definitely hurt a country’s foreign trade. Being downgraded is like being demoted, it means that our personal worth is no longer valued or that it is less valued. How would you feel if you (or your contributions) were no longer valued at home or at work?
I have personally never been demoted at work but I have seen it happen several times throughout my career. When a company downgrades their employees it usually means that they want to let them gobecause their contribution is no longer valued in the workplace, but they don’t have enough of a reason to fire them. Being demoted is personal because it is harmful to our ego and our personal self worth. Some people do not accept the option of a demotion very well, and therefore they quit their job. In this day and age I personally think that it is better to have a lower level job than have no job at all.
I like the idea that my contributions both at work and at home are valued. However, I am not totally naive; I understand that I am replaceable at work. In my personal life I like to think that my DINK household could not run efficiently without my individual contribution. In a partnership there are always two people who contribute to the relationship, but if 1 person stops contributing their share, what happens to the couple?
A downgrade means that people see us as less of an asset, but it also diminishes our credit worthiness. Our own personal credit score determines the level of risk that Financial Institutions are taking when they choose to lend us money. If our personal credit score is low we are deemed to be a high risk and the Financial Institution could decline our credit application. If our personal credit score is high we are deemed to be a low risk for the Financial Instituion and we could end up being approved for more credit than we need. If our personal credit score is high we could also receive other financial benefits such as lower interest rates.
Our credit worthiness is determined by paying our bills on time and not accumulating more debt than we can afford to pay off. If we are financially responsible we are assumed to be very credit worthy. If you have ever been declined for a loan, a credit card, or a mortgage how did you feel? Our credit worthiness is a business decision for the Financial Institution, but it definitely has a personal impact on our self worth.
How we are viewed by others is very important to some people. If your friend asked you for money and you knew they probably wouldn’t or couldn’t pay you back, would you still lend them money? What if you asked your friend for money and they would not lend it to you, even though they could afford it, how would you feel? I know that my feelings would be hurt because not only did my friend not help me out in my time of financial need, they also didn’t feel that I was worthy enough to lend money. This is definitely a personal decision, it is not business.
Photo by Valerie Everett
I liked the downgrade of the US that the S&P enacted, here’s why: when else do politicians get reprimanded for being partisan babies? Rarely. Both sides claim they’re just being hosed by the other side. But this was an event that basically said, “You guys are being babies, so we’re not so sure about your economy right now.”
BOOM. Just like that, we all took it on the chin because they can’t work together.