Posted on Friday, September 10, 2010
The Great Recession at 30 Months
Half of Work Force Has Taken a Job-Related Hit, but Some Green Shoots of Optimism
More than half (55%) of all adults in the labor force say that since the Great Recession began 30 months ago, they have suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers, according to a new survey by the Pew Research Center's Social and Demographic Trends Project.
The survey also finds that the recession has led to a new frugality in Americans' spending and borrowing habits; a diminished set of expectations about their retirements and their children's future; and a concern that it will take several years, at a minimum, for their family finances and house values to recover.
Not all survey findings are bleak. More than six-in-ten (62%) Americans believe that their personal finances will improve in the coming year, and a small but growing minority (15%) now says the national economy is in good shape.
These green shoots of public optimism are not evenly distributed -- nor do they always sprout from the most likely sources. Several groups that have been hardest hit by this recession (including blacks, young adults and Democrats) are significantly more upbeat than their more sheltered counterparts (including whites, older adults and Republicans) about a recovery both for themselves and for the national economy.
This report analyzes economic outcomes, behavioral changes and attitudinal trends related to the recession among the full adult population and among different subgroups. It is based on a Pew Research Center survey of 2,967 adults conducted from May 11 to May 31, 2010, on cellular and landlines telephones and also on a Pew Research analysis of government economic and demographic data.
Key findings include:
The Recession at Work: The work-related impact of this recession extends far beyond the 9.7% who are unemployed or the 16.6% who (according to the U.S. Bureau of Labor Statistics) are either out of work or underemployed. The Pew Research survey finds that about a third (32%) of adults in the labor force have been unemployed for a period of time during the recession. And when asked about a broader range of work-related impacts, 55% of adults in the labor force say that during the recession they have suffered a spell of unemployment, a cut in pay, a reduction in hours or an involuntary spell in a part-time job.
Is It Over Yet? Most Americans (54%) say the U.S. economy is still in a recession; 41% say it is beginning to come out of the recession; and just 3% say the recession is over. Whites (57%) are more inclined than blacks (45%) or Hispanics (43%) to say the recession is ongoing. Republicans (63%) are more inclined than Democrats (43%) to say the same.
The New Frugality: More than six-in-ten Americans (62%) say they have cut back on their spending since the recession began in December 2007; just 6% say they have increased their spending. Asked to predict their spending patterns once the economy improves, nearly one-in-three (31%) say they plan to spend less than they did before the recession began, while just 12% say they plan to spend more. A majority say they expect to spend about what they did before the recession.
Family Finances: About half the public (48%) say they are in worse financial shape now than before the recession began; one-in-five (21%) say they are in better shape. Grouped by income, those with annual household incomes below $50,000 are the most likely to say they are in worse shape. Grouped by age, those in late middle age (50 to 64) are most likely to say this. Also, government data show that average household wealth fell by about 20% from 2007 to 2009, principally because of declining house values and retirement accounts. This is the biggest meltdown in U.S. household wealth in the post-World War II era.
A Slow Road to Recovery: Of those who say their family finances have lost ground during the recession, 63% say it will take at least three years to recover. Blacks who have lost ground believe that their recovery time will be shorter than do whites who have lost ground.
Retirement Worries: A third (32%) of adults now say they are not confident that they will have enough income and assets to finance their retirement, up from 25% who said that in February 2009. Among adults ages 62 and older who are still working, a third say they have already delayed retirement because of the recession. And among workers in their 50s, about six-in-ten say they may have to do the same.
The Recession Hits Home: About half of all homeowners (48%) say the value of their home has declined during the recession. Of those who say this, nearly half (47%) believe it will take three to five years for the value to return to pre-recession levels, and nearly four-in-ten (39%) expect it will take six years or longer. Yet the vast majority (80%) of Americans say that owning a house is the best long-term investment a person can make.
Lower Expectations for Children's Future: More than a quarter (26%) of Americans say that when their children become the age they are now, their children will have a worse standard of living than they now have. A decade ago, just 10% of Americans had this concern. Blacks, Hispanics and young adults are more upbeat about the idea of intra-family intergenerational progress than are whites and older adults.
A Partisan Switch: Throughout most of the decade of the 2000s, Republicans were significantly more upbeat than Democrats about the state of the economy. That pattern is now reversed. Across six different measures of confidence in both personal finances and the national economy, Democrats are now much more upbeat than Republicans, even though they have lower incomes and less wealth and have suffered more job losses during the recession. To be sure, Republicans have had to endure their own distinctive mix of recession-related hardships. They are more likely than Democrats to say their house has lost value, and because they are more likely than Democrats to have investments in the stock market, they've been more exposed to its volatile swings up and down. - PEW