<table width="600" align="center" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td><font face="Verdana, Arial, Helvetica, sans-serif"><font color="#333333" size="2"><a href="http://pewsocialtrends.org/2010/06/30/how-the-great-recession-has-changed-life-in-america/#i-overview?src=prc-newsletter" target="_blank"><b>How the Great Recession Has Changed Life in America</b></a><br>
</font></font></td></tr><tr><td><font face="Verdana, Arial, Helvetica, sans-serif"><font color="#333333" size="2">Rew Research Center</font></font></td></tr><tr><td><br></td></tr><tr><td><font face="Verdana, Arial, Helvetica, sans-serif"><font color="#333333" size="2"><i>This poll cuts through the polemics, the politics, and the
delusions, and places us in the bracing world of facts. It is not a
pretty picture.</i></font></font></td></tr><tr><td><br></td></tr>
<tr><td><font face="Verdana, Arial, Helvetica, sans-serif"><font color="#333333" size="2">I. Overview<br>
<br>
Of the 13 recessions that the American public has endured since the
Great Depression of 1929-33, none has presented a more punishing
combination of length, breadth and depth than this one. A new Pew
Research survey finds that 30 months after it began, the Great Recession
has led to a downsizing of Americans’ expectations about their
retirements and their children’s future; a new frugality in their
spending and borrowing habits; and a concern that it could take several
years, at a minimum, for their house values and family finances to
recover.<br>
<br>
The survey also finds that more than half of the adults in U.S. labor
force (55%) have experienced some work-related hardship - be it a spell
of unemployment, a cut in pay, a reduction in hours or an involuntary
move to part-time work. In addition, the bursting of the pre-recession
housing and stock market bubbles has shrunk the wealth of the average
American household by an estimated 20%, the deepest such decline in the
post-World War II era, according to government data.<br>
<br>
While nearly all Americans have been hurt in one way or another, some
groups have suffered more than others. Blacks and Hispanics have borne a
disproportionate share of both the job losses and the housing
foreclosures. Young adults have taken the biggest losses on the job
front. Middle-aged adults have gotten the worst of the downturn in house
values, household finances and retirement accounts. Men have lost many
more jobs than women. And across most indicators, those with a high
school diploma or less education have been hit harder than those with a
college degree or more.<br>
<br>
Whether by choice or necessity, many Americans have already
significantly scaled back their pre-recession borrow-and-spend habits.
According to government data, household spending has gone down, savings
rates have gone up, consumer credit has remained stable and mortgage
debt has plunged during this recession.<br>
<br>
The survey finds that the public is starting to see some light at the
end of the tunnel. More than six-in-ten survey respondents (62%) say
they expect their personal financial situation to improve in the coming
year-the most optimistic reading on this question since before the
recession began. Likewise, about six-in-ten (61%) say they believe the
damage the recession has inflicted on the U.S. economy will prove to be
temporary rather than permanent.<br>
<br>
This report sets out to present a comprehensive balance sheet on the
Great Recession by looking at economic outcomes, behavioral changes and
attitudinal trends among the full population as well as various
subgroups. Our analysis is drawn from two sources-a comprehensive Pew
Research telephone survey of a representative, national sample of 2,967
adults conducted from May 11 to May 31, 2010 (see Appendix for details),
and a Pew Research analysis of government economic and demographic
trend data.<br>
<br>
One striking finding of the survey is that some of the demographic
groups that have suffered the worst economic hits are also the ones most
optimistic about a recovery-both for themselves personally and for the
U.S. economy as a whole.<br>
<br>
Blacks and Hispanics are more upbeat than whites. The young are more
optimistic than middle-aged and older Americans. And Democrats are more
upbeat than Republicans, even though Democrats have lower incomes and
less wealth and have suffered more recession-related job losses.<br>
<br>
These group differences are apparent not just in responses to specific
survey questions, but also in a set of statistical models that examine
the independent impact of race, partisanship and age on the likelihood
that a respondent will express optimism on six different attitudes about
the economy tested in the survey, controlling for a range of
demographic variables and recession-related experiences. 1 The analysis
finds that blacks, Democrats and, on most questions, younger adults are
more likely than whites, Republicans and older adults to hold positive
views about the national economy and their personal finances, regardless
of their income, education, gender or whether they have had difficulty
paying their bills, making mortgage or rent payments; getting or paying
for medical care; or have had to cut spending during the recession.<br>
<br>
One likely explanation for these seemingly counterintuitive patterns is
that in an age of highly polarized politics, Democrats and Republicans
differ not only in their values, attitudes and policy positions, but,
increasingly, in their basic perceptions of reality.<br>
<br>
This is not the first Pew Research survey taken in the past year that
shows that the election of Barack Obama (which came at the height of the
recession in November 2008) appears to have put his most enthusiastic
supporters-especially blacks, Democrats and young adults-in a more
positive frame of mind than Obama’s detractors about many aspects of
national life. 2<br>
<br>
For example, since Obama was elected Democrats have become more
optimistic than Republicans about the state of the national economy. For
most of the time that George W. Bush was in office, the reverse was
true: Republicans were more upbeat-often, much more upbeat-than
Democrats.<br>
<br>
In addition to race, party identification and age, the logistic
regression models include gender, education, income and whether the
respondent had experienced recession-related problems to predict the
respondents' views on the current state of the economy, their personal
financial situation and how they think their family will fare
financially in the coming year. ↩<br>
For similar findings of this nature from another Pew Research Center
survey, see 'Blacks Upbeat about Black Progress, Prospects, ” January
12, 2010. <br>
<br>
II. An Historical Perspective<br>
<br>
Modern-era recessions in the U.S. have generally been less severe than
those of the 19th and early 20th centuries. But this one stands out for
two features that, taken together, validate its by-now-familiar
designation as the worst recession since the Great Depression.<br>
<br>
The Surge in Long-term Unemployment: The typical unemployed worker today
has been out of work for nearly six months (23.2 weeks). This is almost
double the previous post-World War II peak for this measure-12.3
weeks-in 1982-83. Long-term unemployment of this magnitude and duration
raises a vexing question: Beyond a 'normal” cyclical downturn, might the
U.S. economy be going through some long-term structural changes that
will lead to relatively high rates of unemployment for years to come?<br>
<br>
The Meltdown in Household Wealth: This recession has eroded more
household wealth than any other episode in the post-World War II era-not
surprising in that it was triggered by the bursting of bubbles in both
the housing and stock markets, the two principal sources of household
wealth. According to the Panel Survey of Income Dynamics (PSID) 3 ,
median household wealth decreased by an estimated 19% from 2007 to 2009.
On a percentage basis, this loss of wealth was greater among
middle-income households than among those in either the lower or upper
income tiers. Similarly, it took a much bigger percentage bite out of
the (relatively modest) wealth of black and Hispanic households than of
white households.<br>
<br>
Two-and-a-half years after this recession began, it’s easier to take
stock of its effects than to be certain of its duration. The nation’s
gross domestic product has been registering gains for nearly a year,
leading some economists to asse<br>
rt that the recession is already over-and has been for some time. But
with the nation’s overall unemployment rate remaining stubbornly
high-9.7% as of May 2010-the quasi-official arbiters of the nation’s
business cycles at the National Bureau of Economic Research4. The NBER
is a private, not-for-profit economic research organization based in
Cambridge, Mass. It counts more than 1,000 professors of economics among
its research associates. Since forming its Business Cycle Dating
Committee in 1978, it has been the quasi-official arbiter of the timing
of expansions and recessions in the U.S. economy.] (NBER) have yet to
declare that it is over. To further complicate matters, this doesn’t
necessarily mean it isn‘t over. Because of the way the NBER operates,
there is often a lag time of a year or more between its declaration of
the end of a recession and the date that recession is retrospectively
said to have ended. (For details, see Chapter 2).<br>
<br>
3. PSID, started in 1968, is a longitudinal study of U.S. families,
that is, it follows the same families and individual members of those
families over time. It features an oversample of low-income families.
The original sample size was about 4,800 families, and it has grown
since to about 8,000 families today. A refresher sample of immigrant
families was added in 1997 to keep the study representative of the U.S.
population. The study is conducted at the Survey Research Center,
Institute for Social Research, University of Michigan. <br>
<br>
III. The Recession: An Overview<br>
<br>
It Ain‘t Over Till It‘s Over: The public shares the NBER’s caution about
declaring the recession over. More than half (54%) of the respondents
to the Pew Research survey say the economy is still in a recession, 41%
say it’s 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.<br>
<br>
Half Say Their Finances Are in Worse Shape: About half of Americans
(48%) say their household’s current financial situation is worse now
than before the recession. About one-in-five (21%) say they are in
better shape. The rest say there has been no change. Grouped by income,
those at the lower end of the scale are most likely to say they are in
worse shape. Grouped by age, those in late middle age (50 to 64) are the
most likely to say they are in worse shape.<br>
<br>
Many Foresee a Long Road to Recovery: Among those who say their family
finances have lost ground during the recession, 63% predict it will take
at least three years to recover. Blacks are more optimistic than whites
that their recovery time period will be two years or less (55% versus
29%). Among college graduates who lost ground, fully 30% believe it will
take six or more years to recover. Among those who did not attend
college and lost ground, just 18% see a recovery period of six or more
years.<br>
<br>
A Growing Lower Class? Asked to place themselves into one of five
socioeconomic classes (upper, upper-middle, middle, lower-middle and
lower), a slightly higher share of Americans put themselves in the lower
two groups now than before the recession began-29% now vs. 25% in March
2008. Half say they are middle class (down from 53% in 2008), while 20%
place themselves in the upper two classes (virtually unchanged from
2008). Blacks, as a group, are an exception to this overall pattern. The
share of blacks who now identify with the upper class has gone up
during this recession, to 20% now from 15% two years ago.<br>
<br>
Not Everyone Got Whacked: Even in these bad times, some people have made
out OK. As noted above, about two-in-ten (21%) adults say their
household finances are in better shape now than before the recession
began. Among all currently employed workers, 20% say they were promoted
or found a better job during the recession. And about four-in-ten say
they have gotten at least one raise during the past 30 months (a
proportion that is likely much lower than it would have been if the
economy had been more robust).<br>
<br>
IV. The New Frugality<br>
<br>
Making Ends Meet: Americans have changed their lifestyles in many
different ways to make ends meet during this recession. More than
seven-in-ten (71%) say they have bought less expensive brands. Nearly
six-in-ten (57%) say they have cut back or canceled vacation plans.
About half (49%) say they have loaned money to someone, and 24% report
having borrowed money from someone. Three-in-ten say they have cut back
on alcohol or cigarettes. Nearly one-in-ten (9%) say they have moved
back in with their parents (among adults ages 18 to 29, this figure
rises to 24%). Overall, higher-income adults report making fewer of all
these lifestyle adjustments than do lower-income adults. Likewise,
adults ages 65 and older report making fewer of them than do younger and
middle-aged adults.<br>
<br>
Neither a Spender Nor a Borrower Be: More than six-in-ten (62%)
Americans say that since the recession began, they’ve cut back on
household spending. Half say they have reduced the amount they owe on
mortgages, credit cards, car loans and other borrowing. Of those who
have savings or retirement accounts, more than four-in-ten (42%) say
they’ve adopted a more conservative approach to saving and investing,
compared with just 8% who say they’ve taken a more aggressive approach.
These new habits of thrift and caution could well outlive this
recession. Asked to predict their financial behaviors once the economy
recovers, 48% say they plan to save more, 31% say they plan to spend
less and 30% say they plan to borrow less. Only small percentages say
the reverse-that they plan to save less and borrow and spend more.<br>
<br>
V. Retirement Worries<br>
<br>
Retirement Confidence Down: Even though the stock market has rallied by
more than 50% from its recession-era bottom in March 2009, Americans
have continued to lose confidence in their ability to afford retirement.
Some 32% of adults now say they are 'not too” or 'not at all” confident
they will have sufficient income and assets for retirement, up from 25%
who said the same in February 2009. This uncertainty is greater among
younger and middle-aged adults than among older adults. It is also
greater among adults with low incomes.<br>
<br>
Retirement Delayed: Among adults ages 62 and older who are still
working, 35% say they’ve already delayed retirement because of the
recession. Among adults ages 50 to 61 who are currently employed,
six-in-ten say they may have to delay retirement because of the
recession.<br>
<br>
Raiding the Cookie Jar: Four-in-ten adults (41%) who have a checking,
savings or retirement account say that during the recession they have
had to withdraw money from their savings account, 401(k) account or some
other retirement account to pay their bills. Younger and middle-aged
adults report having done this at higher rates than those ages 65 and
older. Lower-income adults have done it at higher rates than have
upper-income adults.<br>
<br>
VI. Short-term Optimism; Long-Term Uncertainty<br>
<br>
Next Year Will Be Better: More than six-in-ten (62%) adults say they
expect their financial situation to improve in the coming year, compared
with just 19% who say they expect it to get worse. That is the most
upbeat reading on this measure since September 2007, just before the
recession began. Among the most optimistic demographic groups are blacks
(81% expect their finances to improve in the coming year), Hispanics
(74%) and 18- to 29-year-olds (85%).<br>
<br>
But Will Our Children Do Better?<br>
During the past decade, Americans have grown increasingly skeptical
about the standard of living of future generations-and this skepticism
has deepened during this recession. Today fewer than half (45%) of
adults believe that when their children become the age they are now,
their children will enjoy a better standard of living than they have
now. Even more striking, 26% now say their children’s standard of living
will be lower. This is a 'positive/negative” gap of just 19 percentage
points on a question that tests the public’s faith in a core tenet of
the American dream-the idea that children grow up to live better than
their parents. At the start of the recession in early 2008, this gap was
35 percentage points. In 2002, it was 51 percentage points. Overall,
blacks, Hispanics and young adults are more upbeat about the idea of
generational progress than are whites and older adults.<br>
<br>
Public Says Mix of Economic News Is Unchanged: About two-thirds of
adults (65%) say that these days they are hearing a mix of good and bad
news about the economy, while 30% say they are hearing mostly bad news
and just 4% say they are hearing mostly good news. These shares have
barely budged in the past year. However, back in December 2008, when the
recession was about a year old, fully 80% of adults said they were
hearing mostly bad news about the economy.<br>
<br>
Recession Impact: Permanent or Temporary? Most Americans (70%) believe
that the recession has inflicted major changes on the U.S. economy, but
most (61%) say that these changes will prove to be temporary. Older
adults are more downbeat than younger adults (21% of those ages 50 and
older see major, permanent changes, compared with just 13% of those ages
18-24); college graduates are more pessimistic than whose with a high
school diploma or less education (22% of the former see major, permanent
change, compared with 14% of the latter); and Republicans are more
pessimistic than Democrats (22% vs. 12%). When asked a similar battery
of questions about the impact of the recession on the way they live
their lives, a smaller share of respondents-just 8%-say they believe the
changes will prove to be both major and permanent. An additional 12%
say the changes will be minor and permanent.<br>
<br>
Still the Land of Prosperity? By a two-to-one margin, 63% to 31%,
Americans agree with the statement that 'although there may be bad times
every now and then, America will always continue to be prosperous and
make economic progress.” Blacks, Hispanics, Democrats and young adults
register the most optimistic views on this question. Also, those who
self-identify with the middle class are more optimistic than those who
classify themselves as upper or lower class.<br>
<br>
VII. The Labor Force<br>
<br>
The Unemployment Blues: High as they are, measures such as the
unemployment rate (9.7% in May 2010) and the median length of
unemployment (23.2 weeks) still don’t fully convey the scope of the
employment crisis that has unfolded during this recession. A broader
measure from the U.S. Bureau of Labor Statistics that also includes
involuntary part-timers and other marginal workers puts the combined
unemployment and underemployment rate at 16.6%. And the Pew Research
survey finds that among all adults in the labor force, fully 32% say
that they are either now unemployed or that they had been unemployed for
some period of time since the recession began.<br>
<br>
The Long-term Blues: Of all currently-unemployed adults, 46% have been
out of work for six months or more, by far the highest share measured by
the U.S. Bureau of Labor Statistics in the post-World War II era.
Short-term spells of unemployment typically do not lead to significant
breaks in career paths or major financial losses-but long-term spells
often do.<br>
<br>
The Payday Blues: The unemployed are not the only ones hit by this
recession. More than four-in-ten (42%) currently employed workers say
that during the recession they have experienced at least one of the
following: had their hours reduced (28%); had their pay cut (23%); had
to take unpaid leave (12%) or saw their full-time jobs shrink to part
time (11%). Workers across all demographic groups were affected, but
these blows landed most heavily on minorities and workers with only a
high school diploma or less education.<br>
<br>
Career Impact: About a quarter (24%) of all adults-and 43% of all
currently unemployed adults-say the recession will have a big impact on
their ability to achieve their long-term career goals. Also, workers who
lost a job during this recession but have since found a new one (26% of
currently employed adults) are less likely than other workers to say
they are satisfied with their job and more likely to say they are
overqualified.<br>
<br>
VIII. The Recession Hits the Home<br>
<br>
The Housing Bubble Bursts: About half of all homeowners (48%) say the
value of their house has declined during the recession (26% say 'a lot,”
and 22% say 'a little”). A third say their homes have held their value
during the recession, and one-in-eight say their homes have increased in
value. Homeowners most likely to report their home lost value include
those who are middle-aged, upper income and live in the West. Also,
Republicans (52%) are more likely than Democrats (42%) to say their
house has lost value.<br>
<br>
'Underwater”: More than two-in-ten (21%) of all homeowners say they
currently owe more on their mortgage or other home loans than they could
sell their house for in today’s market. In real estate vernacular, they
are 'underwater.” Hispanic and black homeowners are more likely than
whites to be in this circumstance; lower-income homeowners are more
likely than upper-income homeowners to face this problem, and
middle-aged homeowners more likely than either younger or older
homeowners to be in this situation.<br>
<br>
Not Coming Back Anytime Soon: Among those who say their houses have lost
value during this recession, the overwhelming majority believe it will
take at least three years for values to return to pre-recession levels.
This includes 47% who say they expect it will take three to five years
and 39% who say it will take six years or longer. Just 10% say they
expect a recovery in two or less years. Despite this, eight-in-ten
Americans agree that a house is the best long-term investment the
average person can make. (However, the share who 'strongly agree” with
this statement is just 39% now, down by 10 percentage points from the
share who said the same in a 1991 survey.)</font></font></td></tr></tbody></table><br clear="all"><br>-- <br>P2P Foundation: <a href="http://p2pfoundation.net" target="_blank">http://p2pfoundation.net</a> - <a href="http://blog.p2pfoundation.net" target="_blank">http://blog.p2pfoundation.net</a> <br>
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