Friday, August 29, 2014

Malaise: 70 Percent Of Americans Believe Recession Is Permanent

Malaise: 70 Percent Of Americans Believe Recession Is Permanent - Science20

"Though the rich get richer and the stock market is booming, which has
led to claims by the administration that things are fine, the American
public hasn't been this pessimistic about the future since Jimmy Carter
was president. Pessimism has instead leaped 40% higher since 2009, when
the Great Recession was in full swing.

The protracted and uneven hints of recovery, where the only sector with
low unemployment is government, has led most Americans to conclude that
the U.S. economy has undergone a permanent change for the worse,
according to a new national study at Rutgers. 70 percent now say the
recession's impact is permanent, up from half in 2009 when the Obama
administration says the recession officially ended, according to the
John J. Heldrich Center for Workforce Development.

Among key findings in "Unhappy, Worried and Pessimistic: Americans in
the Aftermath of the Great Recession," the center's latest Work Trends
report, are:

  •  Despite some job growth and lower levels of employment, most
    Americans do not think the economy has improved in the last year or that
    it will in the next.

  •  Only around 16 percent of Americans believe that job opportunities
    for the next generation will be better than for theirs; five years ago,
    40 percent held that view.

  •  Roughly 80 percent of Americans have little or no confidence that
    the federal government will make progress on the nation's most important
    problems over the next year. 

Much of the pessimism is rooted in direct experience, according to
Heldrich Center Director and Professor Carl Van Horn, co-author of the
report. Most people don't work for the government, which only ever had 2
percent unemployment while the bulk of America had unemployment levels
in the teens.

  "Fully one-quarter of the public says there has been a major
decline in their quality of life owing to the recession, and 42 percent
say they have less in salary and savings than when the recession began,"
Van Horn said. "Despite five years of recovery, sustained job growth
and reductions in the number of unemployed workers, Americans are not
convinced the economy is improving."

He added that only 33 percent think the U.S. economy has gotten better
in the last year, only 25 percent think it will improve next year.

The Heldrich Center conducted its survey between July 24 and Aug. 3 with a nationally representative sample of 1,153 Americans.

The Work Trends analysis summarizes the effects of the Great Recession
by classifying Americans into one of five categories based on how much
impact the recession had on their quality of life and whether the change
was temporary or permanent. It reveals that:

  • 16 percent of the public, or 38 million people, were "devastated"
    because they experienced a "major, permanent" change in the quality of
    their life

  • 19 percent, or 46 million, were "downsized" due to "permanent but minor" changes in standards of living

  • 10 percent, or 24 million were "set back," experiencing "major, but temporary" changes in their quality of life

  • 22 percent, or 53 million, were "troubled" by the recession and endured only a "minor and temporary" change

  • Only one in three of the nation's 240 million adults reported that they were completely "unscathed" by the recession.

Professor Cliff Zukin, co-director of the Work Trends surveys with
Van Horn, said, "Looking at the aftermath of the recession, it is clear
that the American landscape has been significantly rearranged. With the
passage of time, the public has become convinced that they are at a new
normal of a lower, poorer quality of life. The human cost is truly

Characteristics of the American worker

The public paints an extremely negative picture of the American
worker as unhappy, underpaid, highly stressed, and insecure about their
jobs. Asked to describe the typical American worker, using a list of a
dozen words or phrases, just 14 percent checked off happy at work and
only 18 percent believe they are well paid. Two-thirds say that American
workers are "not secure in their jobs" and "highly stressed." Just one
in five say the average American worker is well educated or innovative;
just one in three checked off ambitious or highly skilled. And perhaps
the most surprising, just one in three checked off that the average
American worker is "better than workers in other countries."

Financial and long-term effects

One of the reasons the public does not see the economy as having
gotten better is that many remain under tremendous financial stress. Six
in 10 Americans describe their financial condition negatively as only
fair (40 percent) or poor (19 percent). One-third report being in good
shape; just 7 percent describe themselves as being in excellent
financial health. Many report significant losses in the Great Recession.
Just 30 percent say they have more in salary and savings than they did
before the recession started, less than a third have the same, leaving
42 percent who report having less today than five years ago.

Americans view the recession as causing fundamental and lasting
changes in a number of areas of economic and social life. Three in five
believe the ability of young people to afford college will not return to
prerecession levels, which is significant given the role that education
has historically played as a key to upward mobility. Other fundamental
areas where a large segment of the public sees permanent changes are:
job security (53 percent), the elderly having to find part-time work
after retiring (51 percent) and workers having to take jobs below their
skill level (44 percent).

Pessimistic about the Future

Americans are also pessimistic about the future. Only a quarter
think economic conditions in the United States will get better in the
next year, and just 40 percent believe their family's finances will get
better over the next year. Consequently, most do not see themselves
getting back to where they were any time soon.

"Despite nearly five years of job growth and declining unemployment
levels, Americans remain skeptical that the economy has improved and
doubt that it will improve any time soon," said Van Horn. "The slow,
uneven, and painful recovery left Americans deeply pessimistic about the
economy, their personal finances, and prospects for the next

The report found the public sharply critical of Washington
policymakers. More disapprove than approve of the job President Obama is
doing by a margin of 46 percent to 54 percent. Even fewer approve of
the job Congress is doing – 14 percent. A plurality of 43 percent say
they trust neither the president nor Congress to handle the economy.
Finally, should Republicans win control of Congress in November, only 26
percent say this will help lower the unemployment rate. Thirty percent
say this would make unemployment worse while 44 percent say it would
make no difference."