The Great Recession
began in December 2007 and although it officially ended in June 2009, nearly four years ago, the economy is still trying to recover. We know the effect that the recession had on the unemployment rate but it is still difficult to quantify just how far-reaching its effects were. A new study conducted by the Rutgers University John J. Heldrich Center for Workforce Development helps us put the recession into better perspective.
According to the survey (PDF
), the Great Recession personally affected 73 percent of Americans. Personally affected is defined as the individual surveyed having suffered a job loss or having a family member or friend lose a job in the prior four years. Researchers broke this figure down even further: 23 percent of those surveyed lost a job, 11 percent knew someone in their immediate household that lost a job, 26 percent knew someone in their extended family that was laid off, and 13 percent had a close personal friend that was laid off during the Great Recession.
The survey went beyond job losses and examined individual’s attitudes about the economy. Highlights from the study include:
- 60 percent believe that the nation’s economy has undergone a permanent change
- 29 percent feel that the economy will never recover
- 56 percent of those surveyed have less money in savings now than they did before the recession
- Majority of individuals surveyed feel that college will be permanently out of financial range for most young people
- 40 percent of individuals that lost a job during the recession borrowed money to see a doctor or other healthcare professional
As the monthly unemployment report
shows, people are getting back into the workforce but that doesn’t mean that these workers are back to their pre-recession earnings level. Nearly half of those surveyed by Rutgers, 48 percent, say that their current job is a step down from the job they held previously. More than half, 54 percent, say that they are earning less now than they did before being laid off.
In my opinion, it is the demographics data that is the most fascinating. The Rutgers research team separated the data by age group, income level, gender, education level and race. Each of these categories was further divided into three additional categories: employed, unemployed and looking, and unemployed and not looking. This final category, the discouraged worker, is where the real story of the recession is told.
Individuals aged 55 and older are the most discouraged group with 62 percent of individuals in this age category without a job and not looking for one. Sure, 55 is closer to retirement age than 18 but 55 is young and these individuals have a decade of earnings ahead of them.
Lower income individuals are also more discouraged with 49 percent of those that fall in the sub-$30,000 income level unemployed and not looking for work. Individuals in the next income level, those making $30,000 to $60,000 a year, are still relatively discouraged with 41 percent reporting that they are out of a job and not looking for a new one. This figure drops drastically, to 23 percent, when the income level tops $60,000.
Obviously the nation still has a long recovery road ahead of it and there is no one single solution to fix the problem. I’m more of an optimist than the 29 percent that feel the economy won’t ever recover. I do feel that it will recover and I’m hopeful that it will be better but I don’t see that happening until at least 2018.