Is TikTok's 'Recession-Proof' Advice Actually Helpful?

We often turn to TikTok for inspiration, whether it's the pesto egg recipe that's taking over the app or the makeup blending trend you have to try. But the app also has a more serious side, one centered around starting a business and career advice. While the stability of the economy often fluctuates, and as the U.S. workforce moves forward into uncertain territory following the height of the pandemic, anxieties around employment abound. And now, some TikTok users are taking to the platform to share their thoughts on how to create security within your job, should the worst — like a recession — come to fruition.

First, what defines a recession? Per the National Bureau of Economic Research, "a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators." It is normal for the economy to experience "peaks" and "troughs," and in between, the economy grows. But as workers and consumers, we acutely feel the effects of such economic cycles.

As Refinery29 reported, videos with the hashtag #recessionproof have almost 50 million collective views on TikTok. The words "recession proof" are often thrown around when describing a particular industry or product that tends to fare well in the midst of an economic crisis. Lipstick sales, for example, have been theorized to indicate a particular economic climate, specifically an economic downturn, as women tend to purchase the product during periods of national financial strife. Industries that have tapped into a perpetual consumer need like pantry staples and health care also tend to stay afloat.

But if you work in an industry outside of these extremely specific perimeters, it can be easy to become anxious about the future of your employment, or even your career. When it comes down to the wire, ultimately employment is not always something we have control over. TikTok has ideas on how to take matters into your own hands as much as possible. 

Per TikToker @mecca.dreams, who offers personal financial consultations, it is wise to keep track of your employer-sponsored retirement plans. Your 401k, for example, is "the most susceptible to market loss," she says in a TikTok. She advises investing in fixed-index annuity — with the caveat that you are above about 40 years old — to potentially avoid those losses. Like a 401k, a fixed-index annuity is also a long-term savings investment, and the two are not mutually exclusive; you can have a fixed-index annuity plan within your 401k, per Forbes.

But what is different about them, and appealing during stiff economic times, is that you cannot lose money gained with a fixed-interest annuity. Instead, you earn an interest rate, or you simply gain nothing (via The Annuity Expert). Many insurance agencies offer a bonus for signing up, which as The Annuity Expert notes, can be helpful when strapped for cash.

And another TikTok user, @jefflernerofficial, speaker, podcaster, and founder of the Entre Institute, reminds viewers in a TikTok that economic recessions also change the psychology of the workforce. Where, in good economic times, businesses may hire the most specialized candidate to fulfill a specific need, in turbulent economic times, as businesses implement layoffs, they look for those with a diverse set of skills to juggle aspects of multiple roles. As such, he recommends diversifying your skillset during downturns in the economy to add new value to your resumé.