More than Half of US Loses Ground
Based on the economic impact of the recession, Pew divided the US adult population into two groups: “Lost Ground” and “Held their Own.” Fifty-five percent of adults fall into the Lost Ground category, while 45% have held their own. Held their own does not imply suffering no adverse impact, but rather not suffering enough to dramatically affect day-to-day life or economic standing.
Losing Ground Causes Hardships
Losing ground during the recession is associated with a variety of hardships. For example, more than four in 10 adults who lost ground (43%) say they were unemployed at some point during the recession, compared with less than 1% of those who held their own. One- third (35%) of those who lost ground had problems paying their rent or mortgage, while not a single one of those who held their own reported similar difficulties.
Likewise, no one who held their own during the recession reported having trouble finding or paying for medical care, or having to borrow money from friends or family to pay bills, compared with 48% and 42%, respectively, of those who lost ground.
And nearly half of those who lost ground (48%) say their family incomes declined during the recession; more than three times the proportion of those who held their own (14%). Similarly, nearly two-thirds of those who lost ground say their family’s overall financial condition is worse now than it was before the recession. Again, that is more than twice the proportion of those who held their own (29%) who say their financial position worsened.
Losing Ground affects Home Value
More than half (53%) of homeowners who lost ground during the recession say the value of their home declined, compared with 43% of those who held their own. While only 13% of all homeowners say their home increased in value, those who held their own are slightly more likely to report their house or condo is now worth more than it was before the recession (15% compared to 10%).
Moreover, while a smaller proportion of those who lost ground are homeowners than those who held their own (53% compared to 75%), those hardest hit owe a significantly larger share of their properties. More than four in 10 (42%) of those who lost ground say they have paid off less than half of what they owe on their home, compared with 30% of those who held their own. It may come as no surprise, then, that they are twice as likely to say they owe more than they could get if they sold their home (29% vs. 14%) in today’s depressed housing market.
Still, the bad economy and dismal housing market may have only slightly dimmed their belief in homeownership as an investment: fully three-quarters (77%) of those who lost ground during the recession agree that “buying a home is the best investment that the average person can make,” a belief they share with 83% of those who held their own during the recession.
Race, Age, Education, Income Play Major Roles
Whites, older adults, the better educated and more affluent were significantly less likely to suffer recession-related hardships and thus were significantly more likely to have held their own. In contrast, minorities, younger people and those with a high school education or less are significantly more likely to have lost ground.
Whites are significantly more likely to be in the held their own group than Hispanics (49% vs. 29%) or blacks (33%). At the same time, minorities are more likely to fall into the group that lost ground (70% of all Hispanics and 66% of blacks, but 50% of whites).
As seen in earlier reports, older adults have been more sheltered from the worst of the recession than younger people. According to the analysis, about seven-in-ten people 65 and older held their own during the recession, compared with 31% of those 18 to 29 and about four-in-ten adults ages 30 to 49 (40%) and 50 to 64 (44%).
Education remains a buffer against hard times. Nearly six in 10 college graduates (58%) are among those who held their own during the recession, compared with 38% of those with a high school diploma or less education and 40% of those who had completed at least a year of college but did not earn a degree.