Recession Hits American Jobs, Wallets

July 16, 2010

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Analytics, Automated & MarTech | Data-driven | Financial Services | Household Income | Non-Profit | Staffing

More than half (55%) of US adults have felt some type of negative work-related impact from what is generally seen as the ongoing “Great Recession,” according to data from the Pew Research Center.

1/3 Have Been Unemployed at Some Point Since Dec. ’07
About one-third (32%) of adults in the labor force have been unemployed for a period of time during the recession, generally considered to have begun in December 2007. Another 6% have been underemployed, meaning they want full-time employment but cannot find it due to economic reasons.

pew-recession-at-work-july-2010.jpg

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.

Among currently employed adults, 28% have had work hours reduced, 23% had their pay cut, 12% had to take unpaid leave, and 11% have been forced to work part-time.

Most See Recession Ongoing
Most Americans (54%) say the US economy is still in a recession; but a sizable minority (41%) say it is beginning to come out of the recession; while 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.

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Frugality is Common
More than six in 10 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.

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Half See Declining Home Value
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 10 (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.

Half in Worse Financial Shape
About half the public (48%) say they are in worse financial shape now than before the recession began; only 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, while grouped by age, those in late middle age (50 to 64) are most likely to say this.

Government data show that average household wealth fell by about 20% from 2007 to 2009, principally because of declining house values and retirement accounts. Pew analysis indicates this is the biggest meltdown in U.S. household wealth in the post-World War II era.

Retirement Worries
One-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 60% say they may have to do the same.

Study: Almost Half of Adults Think Economy is Improving
While US adults are still feeling the impact of the recession, 44% think things are getting better, according to a new survey from PerkStreet Financial and Harris Interactive.

However, this has not stopped a large majority of Americans (83%) from taking action relating to the recession. These include:

  • 61% have cut back on entertainment expenses such as dining out and travel.
  • 57% have made changes in overall spending habits.
  • 41% are spending more time shopping for the best deals.
  • 40% are using more coupons.
  • 20% are cutting back on essentials like food and medication.

About the Data: The Pew Research Center surveyed 2,256 members of the labor force, including 1,604 currently employed adults.

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