U.S. Warned of Possible Downgrade

U.S. lawmakers got another stern warning from a leading credit rating agency on Thursday that there is now a very real possibility that the country's top-notch credit rating could be downgraded in the next three months.

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Standard & Poors said in a statement it was placing the United States' sovereign rating on "CreditWatch with negative implications."

"[O]wing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the U.S. within the next 90 days," the agency said in a statement.

The action on Thursday follows a move in April when S&P changed its outlook on the U.S. AAA rating to "negative" because at the time it couldn't see how lawmakers would create a path to real debt reduction.

Bernanke: Debt ceiling breach 'calamitous'

Since then "the political debate about the U.S.' fiscal stance and the related issue of the U.S. government debt ceiling has, in our view, only become more entangled," the agency said.

"[W]e believe there is an increasing risk of a substantial policy stalemate enduring beyond any near-term agreement to raise the debt ceiling," S&P noted.

Indeed, other warnings from ratings agencies Moody's and Fitch in the interim spurred more rhetoric than action from politicians. Seven weeks' worth of talks between the parties led by Vice President Joe Biden broke down in June after House Majority Leader Eric Cantor left the negotiations.

And regular meetings at the White House between President Obama and Capitol Hill brass over the past two weeks have showed no signs of real progress. Obama will hold a press conference Friday to offer an update on the negotiations.

A downgrade of U.S. credit would mean interest rates on U.S. bonds would go up. And it could have ramifications across global markets because U.S. bonds are considered the world's safe haven investment.

The Treasury issued an immediate response to the news.

"Today's action by S&P restates what the Obama Administration has said for some time: That Congress must act expeditiously to avoid defaulting on the country's obligations and to enact a credible deficit reduction plan that commands bipartisan support," Treasury official Jeffrey Goldstein said. (Read: Republican stance on taxes a bust with public)

A downgrade could come for one of three reasons, S&P explained:

-- If Congress and the administration fail to come up with a "credible solution" to U.S. debt and show no signs of agreeing on one in the foreseeable future.

-- If the United States misses any scheduled debt service payments, in which case S&P would issue a "selective default" meaning a default has occurred on some bonds but not others.

-- If S&P concludes that the debt ceiling debate so bogs down that it calls into question policymakers' "willingness and ability to timely honor the U.S.' scheduled debt obligations."

Treasury started sending letters to Congress back in January urging them to raise the $14.3 trillion debt ceiling -- which is the U.S. legal borrowing limit

The Treasury takes in, on average, about $125 billion less than it has to pay out on a monthly basis. To make up the difference it issues U.S. bonds, and because of the country's sterling rating, it is able to do so at very low rates.

If Congress doesn't raise the debt ceiling by Aug. 2, the Treasury will no longer be able to pay all of the country's bills in full and on time without interruption

Debt ceiling: Moody's puts U.S. on notice

The public pressure on lawmakers to raise the debt ceiling was ratcheted up Wednesday when a major rating agency said it would put the sterling bond rating of the United States on review for possible downgrade.

Moody's Investors Services said it had initiated the review because of "the rising possibility" that Congress will fail to raise the debt ceiling by Aug. 2 -- something that could lead to a U.S. default on its debt.

If the debt ceiling isn't raised by then, the Treasury Department says it will no longer be able to pay all the country's bills in full and on time without being allowed to borrow new money. (Read: Debt ceiling FAQ)

"Moody's considers the probability of a default on interest payments to be low but no longer to be de minimis," Moody's said in a statement.

The United States enjoys its AAA rating in part for having always stood behind its debt and paid its bills on time. As a result, U.S. Treasury bonds are considered the world's safe-haven investment.

The Treasury Department issued an immediate response Wednesday.

"Moody's assessment is a timely reminder of the need for Congress to move quickly to avoid defaulting on the country's obligations and agree upon a substantial deficit reduction package," Treasury official Jeffrey A. Goldstein said in a statement.
Debt ceiling: Chaos if Congress blows it

In the still unlikely event the United States would default on any of its interest payments to bondholders, Moody's said it expected the default to be short-lived and the loss to bondholders "minimal or non-existent."

But, the agency added, a default "would fundamentally alter Moody's assessment of the timeliness of future payments." Translation: The United States would be downgraded to AA status.

Beyond the debt ceiling: Even if lawmakers raise the debt ceiling in time, Moody's also made clear that it is expecting progress on the long-term debt.

The agency said it would likely change its outlook on the AAA rating to "negative" from "stable" absent a "substantial and credible" debt-reduction deal.

Moody's had alerted investors in early June that it was considering putting the U.S. rating under review unless it saw forward movement in the debt talks by mid-July. It cited as a concern the "heightened polarization" in the debate.

Since then, negotiations led by Vice President Biden to find a compromise broke down and the prospects for a "grand bargain" have been called into question.

Market reaction: Just how the bond market -- i.e., the investors around the world who lend to the federal government -- will respond to Moody's action is not clear yet.

Bond traders may take note but not blink since the agency already signaled its intention -- "so no surprise factor," said Steve Van Order, a fixed income strategist at Calvert Investments.

And Moody's isn't the ultimate arbiter.

"The bond market will follow its own judgment of how Washington is approaching deficit reduction, not the decisions of the rating agencies," said Jim Vogel, head of interest rate strategies at of FTN Financial.

But, Vogel noted, "Moody's action will focus the market's attention on the debt ceiling more than it has been in recent days. Rating agency actions also may provide a rationale for policy makers to alter their voting stance as deadlines loom."
Bernanke: Default would cause 'major crisis'

Moody's isn't the first ratings agency to announce a negative action.

In April, Standard & Poor's revised its outlook on the country's AAA rating to negative from stable.

S&P's reason: Relative to its peers, the United States has "very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us."

Fitch Ratings, meanwhile, said in early June that if lawmakers fail to raise the debt ceiling by Aug. 2, it would put the country on "ratings watch negative," meaning there is a "heightened probability" of a rating change.

Who would follow Geithner?

Timothy Geithner said Thursday that he plans to stay on as Treasury Secretary for the foreseeable future. But that hasn't stopped speculation about who might take his place later this year.

Sources told CNN and other news outlets Thursday that Geithner is considering leaving the Obama administration later this year, once negotiations on raising the government's debt ceiling and cutting the budget deficit are complete.

Geithner's family is moving back to the New York suburbs where they lived before he took office so his son can finish high school there. And as the head of Treasury through the worst financial crisis in a generation, and the last key member of President Obama's original economic team still on the job, a desire to leave wouldn't be a shock.

Geithner tried to tamp down the reports of his imminent departure when speaking in Chicago Thursday by saying he wasn't planning on leaving anytime soon.

Still, economists and Washington experts were already talking about who might take over the high-profile job.

Near the top of the list is current White House Chief of Staff Bill Daley, a close Obama confidant and someone who was brought in at least partly because of his good relationship with the business community.

Before taking the job in the administration earlier this year, Daley had been an executive at JPMorgan Chase (JPM, Fortune 500). He also served as Secretary of Commerce in the second term of the Clinton Administration.

Also at the top of many lists is Erskine Bowles, the Democratic co-chairman of the president's bipartisan commission on cutting the budget deficit. Bowles, who had served as White House Chief of Staff in the Clinton administration, would be an relatively easy pick to get confirmed given the budget cutting emphasis in Congress today, according some experts.

But when contacted Friday, Bowles, 65, appeared to take himself out of running for the job, saying that he is not interested in any full-time job at this point in his career.

"I am looking forward to being useful in part-time endeavors," he said.

Investment banker Roger Altman is another name that has been mentioned, but his name has surfaced for previous openings on the Obama economic team without ever getting tapped for a position.

And White House Budget Director Jacob Lew, who has been central to negotiations on the debt ceiling and deficit reduction, is another name suggested by experts.

Jamie Dimon, chairman and CEO of JPMorgan Chase, who is often described as "Obama's favorite banker" is another prominent name mentioned. A spokesman for the nation's second largest bank holding company had no comment on whether his boss would be interested in the job.

Greg Valliere, chief political strategist, Potomac Research Group, said he doesn't think it'll be a good idea for Obama to pick someone from Wall Street, given the government help banking giants like JPMorgan -- along with rivals likeCitigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) -- received during the crisis three years ago.

"I just think that Wall Street is not the way they would go. It could be an albatross for this administration," said Valliere. "And having him berating [Federal Reserve Chairman Ben] Bernanke in public three weeks ago certainly didn't help his case."

Valliere said that he thinks Obama should try to go with a high-profile Treasury Secretary outside of banking and Washington -- someone like Berkshire Hathaway (BRKA, Fortune 500) Chairman Warren Buffett, an earlier supporter of Obama four years ago, or New York Mayor Michael Bloomberg.

"I think he should do something bold and swing for the fences. I think Mike Bloomberg would be an electrifying pick," he said. "The only problem is that he could stray from the reservation on the message. But he's an entrepreneur who knows about creating jobs."

Bloomberg has denied interest in an administration post in the past, and has said he intends to complete his term as mayor which runs through 2013. A spokesman in the mayor's press office declined to comment Friday.

But the political reality is that it might be impossible to get any replacement for Geithner confirmed by the Senate in the year before a presidential election, said Jaret Seiberg, a research analyst at MF Global Inc.'s Washington Research Group.

Seiberg pointed out that 44 Republican senators have vowed not to confirm any nominee to head the new Consumer Financial Protection Bureau because they want the new agency's powers substantially trimmed. The same political battle could lead that group to block a Treasury nominee as well, he said. Even Alexander Hamilton would have trouble getting confirmed today, he said.

"The problem is there is no ideal candidate out there," said Seiberg. "I think it's a Herculean task to get anyone through the Senate right now. That's why at the end of the day, we're likely to have Geithner stay in place."

Valliere said if confirmation becomes the major hurdle to a new Treasury chief, he could see Secretary of State Hillary Clinton moving over to Treasury, with Sen. John Kerry taking her spot at State. Past and current senators have an easier time winning confirmation than do outsiders, he said. And he said that the Treasury job has become a diplomatic job as much as a finance job in the current interconnected global economy

Can China save Europe?

Greece's recently approved austerity plan might not resolve deeper questions over how the country will repay its debts beyond this summer, but it appears one of the world's biggest investors still has faith in the country and and the greater eurozone. After all, it would be too risky not to.

Earlier this week, just days before the Greek Parliament approved austerity measures amid talks of a possible default, China said it would keep investing in Europe's sovereign debt. Premier Wen Jiabao told reporters that the country actually increased the purchase of government bonds of some European countries and hadn't scaled back its euro holdings.

These acts "show our confidence in the economies of Europe and the eurozone," he said.

China's backing isn't all that surprising. It was only earlier this year when the Asian giant supported debt-ridden Spain by signing $7.3 billion in deals that included investments in everything from energy to banking to oil. And it was around this time last year that China pledged to make more than a dozen major commercial contracts for business in Greece.

The value of these purchases may very well be in flux amid debt problems that have put many investors on alert, but that's beside the point of China's voracious appetite. China has more to gain than lose by investing in Europe's future. Even as misery and uncertainty mounts in the region, the eurozone is still China's largest export market (accounting for roughly 20% of total shipments) and it's in its own interest to contain the crisis.

"They're not really concerned about short-term volatility," says Domenico Lombardi, senior fellow specializing in international monetary relations and global currencies at Brookings Institution.

Besides, as China expert Barry Naughton of the University of California in San Diego, pointed out earlier this year: The risks are relatively low since the European Union and the European Central Bank will likely swoop into the rescue if things get really bad.

Wednesday's $41 billion worth of budget cuts and asset purchases was part of a large-scale bailout launched last year to help debt-troubled Greece pay its loans. The European Union and the International Monetary Fund had required Greek lawmakers to pass the plan before releasing its next round of rescue payments.

China's foreign-exchange reserve, worth more than $3 trillion, is by far the biggest in the world and is viewed by politicians and corporate executives as a key source of capital. It's unclear just how much China has boosted its holdings of European bonds, as leaders keep the breakdown of its holdings secret. But just by saying it will invest in Europe, China indirectly calms markets and helps stabilize the euro, and in a way, sends a message to the world at large that it's a good global neighbor willing to help in times of crisis.

Longer-term, the Chinese have been looking to diversify its massive reserves away from the volatile U.S. dollar. To be sure, the euro has also seen its share of peaks and valleys throughout the crisis but the currency is still the most practical alternative to the greenback, says Lombardi, whose research has focused on the ongoing European crisis.

This surely isn't the last time we'll hear the Chinese back the eurozone. If and likely when financial instability rumbles in other parts of Europe in the coming months, we'll probably hear from the Chinese again.

"Probably inevitable" a country will exit euro: George Soros

Billionaire investor George Soros thinks a country will eventually exit the euro zone and urged policymakers on Sunday to come up with a "plan B" that could rescue the European Union from looming economic collapse.

Soros, famous for making $1 billion by betting against the British pound in 1992, did not name any country he thought might exit the currency, but speculation is mounting about the fate of Greece as its politicians struggle to agree more austerity measures demanded by international lenders as the price for staving off bankruptcy.

Soros reiterated his view in a panel discussion in Vienna that the euro had a basic flaw from the start in that the currency was not backed by political union or a joint treasury.

"The euro had no provision for correction. There was no arrangement for any country leaving the euro, which in the current circumstances is probably inevitable," he said.

While he called survival of the European Union a "vital interest to all," he said the EU needed structural changes to halt a process of disintegration.

"There is no plan B at the moment. That is why the authorities are sticking to the status quo and insisting on preserving the existing arrangements instead of recognizing there are fundamental flaws that need to be corrected."

With a debt crisis in some peripheral members testing the EU's cohesiveness at a time of popular disquiet in wealthier countries over bailouts, he said leaders had to adopt measures now to remedy the situation.

"Let's face it: we are on the verge of an economic collapse which starts, let's say, in Greece but could easily spread. The financial system remains extremely vulnerable...

"We are on the edge of collapse and that is the time to recognize the need for change."

Some steps the EU could adopt included creating a larger central budget; directing some of the income from value-added tax or a levy on financial transactions to Brussels; having a European institution guarantee banks, and tripling the size of its bailout fund by topping it up with tax revenue, he said.

Distrust of Government Impedes Reform in Greece

Demonstrators projected the word across the facade of Parliament last week, and it underscored the hurdle that Prime Minister George Papandreou faces in selling an increasingly resentful electorate on a tough new round of austerity measures: “Thieves.”

Most Greeks say they have little confidence in a political class that they see as corrupt and unaccountable. A recent study by Transparency International in Greece found that 9 out of 10 Greeks believed that their politicians were corrupt, and 80 percent said that Parliament had lost credibility.

“We’re here because we have lost confidence in the present political system, which has brought us to the edge,” Christos Siveris, 35, said last week as he waved a Greek flag outside Parliament during a crucial confidence vote, which Mr. Papandreou won. “This is our Thermopylae,” he added, referring to the ancient battle in which an outnumbered army of Greek warriors held out against a Persian force before ultimately succumbing.

This week Mr. Papandreou will seek parliamentary approval for an austerity package that was agreed on Thursday with European officials and the International Monetary Fund. He is expected to succeed, despite tensions within his Socialist Party and in the face of intransigence from the center-right opposition, which was in power when Greece’s debt soared.

But as the crisis extends into a second year, a growing number of Greeks are turning a critical eye on their own government. They are questioning why members of Parliament have immunity from prosecution unless Parliament votes to lift it, and they want to see more transparency and accountability in party financing.

And having faced across-the-board wage and pension cuts, they have come to question why the lawmakers have benefits that include state cars, generous double pensions (from the government and their own professional guilds), bonuses for attending committee meetings on top of their $8,500-a-month salaries, and personal staff who are widely perceived to attend to a tradition of providing favors in exchange for votes.

In recent years, a number of former officials from both the conservative New Democracy and the Socialist Parties have been implicated in a range of corruption scandals. In one episode, which occurred when New Democracy was in power, the government approved a highly complex land swap in which a Greek Orthodox monastery on Mount Athos received prime, state-owned real estate in exchange for much less valuable land in a rural area. But to date, no officials have been charged with wrongdoing.

Such scandals “add to the frustration and the popular perception that they’re crooks,” said Costas Bakouris, the president of Transparency International’s Greek branch.

Aggravating that perception, the legislators have immunity from prosecution unless the full Parliament votes to lift it, something that has happened only 17 times out of the hundreds of requests since democracy was restored in 1974 after a military dictatorship. Even after they leave office, former lawmakers can be prosecuted only during the parliamentary session in which they are accused of breaking the law and the subsequent session.

In addition to the austerity votes, Parliament is expected to vote this week on whether to broaden an investigation into Akis Tsochatzopoulos, a former defense minister from the Socialist Party who is accused of corruption in the Greek Navy’s procurement of German submarines.

Greece’s Skai television and the related Kathimerini newspaper reported that Mr. Tsochatzopoulos had been living in one of Athens’s most exclusive areas in an apartment purchased from an offshore company. To many here, the case has come to represent everything they consider wrong about the political system, not least because as a former government minister, Mr. Tsochatzopoulos is immune from prosecution. He denies wrongdoing.

In a rare move and an acknowledgment of public sentiment, the two main parties have proposed that his immunity be lifted so that he can be prosecuted.

In another high-profile case, a former Socialist Party transport minister was charged with money-laundering this year after he admitted that he received several hundred thousand dollars from a Greek subsidiary of Siemens.

This month, Kyriakos Mitsotakis, a lawmaker from the New Democracy Party and the son of a former prime minister, caused a stir when he proposed reducing Parliament to 200 members from 300; eliminating double pensions, special payments for serving on committees and immunity for government ministers and lawmakers; and opening up the books on party finances.

“It was received extremely well by the average person on the street, but not so well by my colleagues,” said Mr. Mitsotakis, a Harvard-educated former venture capitalist who is clearly positioning himself as the “new” New Democracy, not least because he has criticized his party’s near total opposition to the austerity measures. (Although he, too, said he planned to vote against them.)

“We have a fundamental trust problem in Greece. We asked people to make huge sacrifices that we’re not willing to make,” he said of his colleagues. “There’s something wrong with that.”

In a nod to the growing popular outrage, Mr. Papandreou said in a speech last week that he would form a committee to look at reducing the number of Parliament members and to abolish the law protecting members from prosecution, although it remains to be seen whether he has the political capital to carry out the constitutional changes those moves would entail.

But other analysts believe that anger at the political class is deeper than the government has acknowledged and will not be easily assuaged. In Syntagma Square each night, Greeks from across the political spectrum have gathered to air their grievances. This collaboration of right and left is new in a country that endured both a civil war after World War II and a military dictatorship from 1967 to 1974.

“That’s unique for Greece,” said Nikos Alivizatos, a constitutional lawyer. “I’m not sure the politicians are conscious of that.”

Job Jugglers, on the Tightrope

WHEN someone asks Roger Fierro “What do you do?” — which he knows is shorthand for “Where do you work?” — he laughs. Then he says, “I do everything.”

Mr. Fierro, who is 26, has four jobs: working as a bilingual-curriculum specialist for the textbook publisher Pearson; handling estate sales and online marketing for a store that sells vintage items; setting up an online store for a custom piñata maker; and developing reality-show ideas for a production company. So far this month, he’s made about $1,800.

Whereas most 9-to-5ers have some kind of structure in their lives, each workday can be wildly different for him. On a recent day, he worked on and off from 7 a.m. to midnight, making business calls, working on the piñata store’s Web site and visiting the vintage store, among other things. (To maintain his sanity, he made sure to schedule some “me” time from 2 to 4 and 6 to 8.)

“I have eight million things going on,” said Mr. Fierro, who lives in the West Town area of Chicago. “It’s exhausting. Sometimes I just want to take a nap.”

Some portions of the population — especially young, creative types like actors, artists and musicians — have always held multiple jobs to pay the bills. But people from all kinds of fields are now drawing income from several streams. Mr. Fierro, for one, has a degree in international studies and Latin American studies at the University of Chicago.

Some of these workers are patching together jobs out of choice. They may find full-time office work unfulfilling and are testing to see whether they can be their own boss. Certainly, the Internet has made working from home and trying out new businesses easier than ever.

But in many cases, necessity is driving the trend. “Young college graduates working multiple jobs is a natural consequence of a bad labor market and having, on average, $20,000 worth of student loans to pay off,” said Carl E. Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers.

“There are two types of people in this position: the graduate who can’t get a full-time job, and the person whose income isn’t sufficient to meet their expenses,” he said. “The only cure for young people in this position is an economic recovery of robust proportions.”

An entry-level salary often doesn’t go very far these days. According to a study by the Heldrich Center, the median starting salary for those who graduated from four-year degree programs in 2009 and 2010 was $27,000, down from $30,000 for those who graduated in 2006 to 2008, before the recession. (Try living on $27,000 a year — before taxes — in a city like New York, Washington or Chicago.)

Many earn even less than $27,000. Maureen McCarty, 23, who graduated from American University in 2010 with a journalism degree, makes $25,000 before taxes as managing editor of TheNewGay.net, a blog focusing on gay issues, with no benefits like health insurance or a 401(k). The salary doesn’t cover her expenses, so she often baby-sits five nights a week for six families in the Washington area.

Without the baby-sitting jobs, she says, she couldn’t afford to live in Adams Morgan, a hip neighborhood in Washington, or take a vacation: “I’m working in online publishing, an industry that is struggling to monetize, so if I want to do anything fun, like take a trip to New Orleans, I have to have additional income.”

Juggling jobs has its perils. “I do sometimes get my schedules mixed up and will double- or even triple-book myself,” Ms. McCarty said. Maintaining a social life can be challenging, and it might consist of “dragging a friend along while I run errands on a Saturday.”

“Sometimes I do get burnt out from all of the juggling, but caffeine, for the most part, keeps me going,” she said. “I try when I get to that point to take some time by myself even if it’s just 30 minutes during lunch.”

All told, Ms. McCarty says, she works 75 to 80 hours a week, a schedule more typical of investment bankers or lawyers aspiring to make partner in a firm — but for just a fraction of the pay.

Between her salary at TheNewGay.net and the $5,000 she makes at her various baby-sitting jobs, Ms. McCarty has a pre-tax income of $30,000, or about $2,500 a month. More than $700 a month goes to the apartment she shares with two roommates.

Some months, however, when she doesn’t have enough baby-sitting jobs lined up, Ms. McCarty has to make that “horrible phone call” to her parents to tell them that she can’t make her rent.

LOUISE GASSMAN, 28, has a rotating schedule of multiple jobs: as an actress; as an assistant to dance instructors at the Circle in the Square and Juilliard schools; as a baby-sitter; and in a variety of administrative roles and as a spinning instructor at SoulCycle, an indoor cycling studio in New York.

Ms. Gassman’s monthly income, which can vary greatly depending on whether she books an acting job, ranges from $1,800 to $4,000. Some months, almost all of her income goes to the $1,450 rent on her 290-square-foot studio on the Upper West Side of Manhattan. Whatever is left after essentials goes toward paying off her remaining $16,000 in college loans.

“I worry about money all the time,” Ms. Gassman said. “I live on a really tight budget, and I live paycheck to paycheck.”

Periodically, the accountant who cuts her check at SoulCycle reminds her that someone her age should be putting away $300 a paycheck for retirement, an amount that is sometimes almost half of her pay. “I’m like, retirement?” she asks. “Then I have the ‘Oh my God, Oh my God’ feelings.”

Ms. Gassman has come up with creative ways to save money. She has a policy not to spend $5 bills and instead puts them in a Tupperware container. So far, she’s been able to use this cash to pay for a new air-conditioner, for three plane tickets, and for her dog to be neutered.

Mia Branco, 23, says she is always worried about money, even though she also works four jobs. She is the house manager at the Discovery Theater at the Smithsonian Institute in Washington, teaches drama and music at Imagination Stage in Bethesda, Md., supervises the box office at the Woolly Mammoth Theater Company and works as a nanny.

Ms. Branco says she logs 40 to 50 hours a week, including travel time, and takes home $1,300 in a good month.

Still, Ms. Branco, who graduated magna cum laude with a degree in musical theater from American University in 2009, says she feels lucky to be employed at all. “The majority of the jobs I have right now are because people were laid off and they didn’t want to hire back full-time employees,” she said. “My willingness to have a hodgepodge schedule makes me more marketable.”

But very few part-time employers offer health insurance, and job jugglers tend to worry: What happens if I become really sick or get into an accident?

At least Ms. McCarty is covered through her parents under the new health care law that allows anyone under 26 to stay on their parents’ insurance.

Mr. Fierro still receives insurance from a teaching job he used to have, but it runs out in August. He doesn’t know what he’ll do after that.

Ms. Branco pays $89 a month for very basic health insurance that has a high deductible, the kind of plan that she says makes her “bank on not getting sick.”

Ms. Gassman, who does not have health insurance and hasn’t had a physical since 2004, says she is extra careful when crossing the street because anything medically catastrophic is simply not an option right now. “I can’t afford to get hit by a taxi,” she said.

ON the brighter side, when or if these job jugglers get on a career path, they may offer an attractive skill set: they are expert multitaskers, hyper-organized and often very knowledgeable in technology. Having multiple jobs is an exercise in mental dexterity.

Ms. Branco says that because of her four jobs, which require skills as diverse as developing lesson plans and mastering an online ticketing system, she has become more adept at dealing with a wide range of people and situations: “I’ve learned to be very adaptable, because one day I’m corporate, the next day I’m start-up, and the next day I’m nonprofit.”

Mr. Fierro describes himself as “MacGyver.” He might have to transport some furniture, “read and synthesize documents, find obscure bits of information on Google and give presentations in Spanish, all in one day,” he says.

But beware: Too much multitasking makes it harder to sustain attention, according to Kirk Snyder, an assistant professor of communications at the Marshall School of Business at the University of Southern California, who researches the changing workplace values of Gen Y.

“I think being focused on more than one professional pursuit at the same time makes it easier to give up on those pursuits that take more effort or have a longer payoff curve because there are always other options to focus on,” he said.

More damaging, however, may be the economics. A national study by the Johns Hopkins Institute for Policy Studies found that young women who worked primarily in part-time jobs did not make higher wages in their 30s than in their 20s.

“The study was clear. Women don’t benefit wage-wise from working part time,” said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University and a co-author of the study. The reason is that part-time jobs generally provide fewer training opportunities and often don’t put workers on a track for advancement.

More college graduates are working in second jobs that don’t require college degrees, part of a phenomenon called “mal-employment.” In short, many baby-sitters, sales clerks, telemarketers and bartenders are overqualified for their jobs.

Last year, 1.9 million college graduates were mal-employed and had multiple jobs, up 17 percent from 2007, according to federal data. Almost half of all college graduates have a job that doesn’t require a bachelor’s degree.

The goal for most, Mr. Sum said, is to be upgraded to full-time jobs. “That is where there is the most payoff for a college degree,” he said.

But full-time jobs don’t suit everyone. Ms. Gassman, for example, has been offered a full-time job at SoulCycle, complete with full benefits, but she doesn’t want it. “I wouldn’t be able to go on auditions in the middle of the day,” she explained. “Of course, it stresses me out not to have health insurance, but what is my choice? Work in an office and be unhappy? Being happy is a superhigh value to me.”

Mr. Fierro is much happier now than when he was working as a bilingual reading specialist for a public school in Chicago. “I was working 12 hours a day and making $38,000 a year and it wasn’t making a dent in the $120,000 in loans I had to pay off. Plus, I was miserable.”

Mr. Fierro, who calls himself an “aesthetic consultant,” would ultimately like to create his own line of merchandise, along the lines of Marc Jacobs. He is optimistic that he is more likely to achieve his goal by working on many projects than if he held a traditional job.

Ms. Branco says that while she is often exhausted and hasn’t had two consecutive days off in months, she isn’t ready to commit to one employer. “The jobs are allowing me to wander and figure out what I really want to do,” she said.

Professor Snyder at Southern Cal doesn’t see multiple job-holding as a trend that will disappear anytime soon.

“The likelihood of this generation devoting their professional life to just one job or career at the same time is simply counterintuitive to their worldview,” he said. “I think we would be seeing this generation pursuing multiple jobs and careers at once even in a robust economy.”

Still, is job-juggling really sustainable, particularly when the next stage of life hits and there may be a mortgage and children?

Ms. McCarty doesn’t think so. She is looking for an end to her 80-hour weeks and meager paychecks. “I don’t want to be 30 and working a bunch of small jobs so I can pay my bills,” she said.