Despite “End” to Recession, Hard Times Persist

recessionA recession, goes an old Wall Street proverb, is simply a period of time in which wealth and capital returns to its rightful owners. E.g., the Rockefellers.

Well, the recession – according to the National Bureau of Economic Research, which is, apparently, the arbiter of these things, is over. It ended in 2009, says the Bureau. But it’s hard to tell from the labor market. Meanwhile, The Great Recession of 2007 has created a veritable shockwave that continues to affect consumers both in the U.S. and around the world.

And when I say “consumers,” I mean, “people.”

According to the 2009 Stress in America Survey by the American Psychological Association, 78% of Americans reported money problems as a significant contributor to stress. Though the Bureau of Labor Statistics reports a drop in national unemployment following the initial crisis, unemployment rates still hover over 7%, meaning millions are still out of a job. When you adjust for the decline in the labor participation rate, which reflects the number of people who gave up on the job search altogether, whose unemployment benefits ran out, or punted and began to take disability, the unemployment rate is over eleven percent.

Unemployment typically has a domino-effect on the jobless, their families and communities, and future generations of income-earners. The unemployed are at a greater risk of developing anxiety and depression as a result of a sudden lack of income, and often survive on money earmarked for later retirement to make ends meet after a drop in resource. The Transamerica Center for Retirement Studies observed more than 60% of those unemployed were dipping into retirement accounts for their daily needs. Imagine saving funds diligently for decades with your company’s 401(k) only to have to withdraw early, incurring hefty early-withdrawal fees.

While two-thirds of Americans had a savings account in 2010, the average balance was a meager $30,000. One-third of Americans has no savings or retirement fund as a financial backing. Both may be forced to delay retirement indefinitely to cope with these global effects of unemployment.

The families of the unemployed are often left to deal with the fallout of economic devastation. Money issues are historically problematic for couples across time. Increased pressure during times of economic distress may be the straw that breaks the family’s back. A study by the American Association of Neurological Surgeons found that rates of ‘non-accidental head trauma’ more than doubled in times of economic recession. The global effects of unemployment often bleed beyond the bank account, and rend the fabric of the family unit.

The effects of unemployment are unfortunately rarely self-contained to those who lose their jobs. The Journal of Labor Economics reports that children of unemployed Fathers have reported earnings an average 9% lower than those children whose fathers retained employment, and are more likely to have access to social services and unemployment insurance.

The distress of the economic downturn is in part the result of changes in societal structure; these same changes continue to create a different landscape for the unemployment market. Many salaried workers are seeing labor and budget cuts following the economic collapse, leaving many workers with less earning potential. Company cutbacks may mean fewer workers left to cover an existing workload – contributing to job stress, depression, presenteeism and employee burnout.

Those that retain employment may see a drop in compensation, cuts in employee benefits, or slashed pensions. The unemployed are left to compete with the average six-person-per-job posting market, only to receive 11% less compensation, on average, when they re-enter the workforce.

Increasingly, more jobs considered ‘low-skill,’ requiring minimal, if any, higher education, are being filled with over-qualified employees; this means fewer jobs for the less-educated, complicating the issue of employment for those who are already vulnerable to a workforce demanding more educated staff.

The changes in the national and international economy present a challenging road ahead for families across America and the globe.

Nevertheless, I posit that the correct course of action is not to give up, despite any adversity, as long as one draws breath and is capable of contributing. As French General Ferdinand Foch said at the Battle of the Marne, “My center is giving way, my right is in retreat; situation excellent. I shall attack.” General Creighton Abrams, then a tank battalion commander in the American Army in the darkest days of the Battle of the Bulge, said, “They’ve got us surrounded, the poor bastards!

You may have to change your methods. But keep fighting. Fight hard, and fight every day, and fight smart, and you will get your break.

We’ve got excellent opportunities with reliable Clients in Vitaver’s CAREER section.

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20 Responses to Despite “End” to Recession, Hard Times Persist

  1. Pingback: Despite “End” to Recession, Hard Times Persist | View Vitaver … | World Money Newsletter

  2. Tamara R Pearlman, CPC says:

    Obstacles are opportunities!!

    • Clay Scott says:

      Tamara, joblessness, lack of income, stress, depression and anxiety aren’t opportunities in my book. Layoff after layoff isn’t just a string of wonderful opportunities for gosh sakes. Living on $400/week unemployment between contracts isn’t living. I am actually offended that you would spout such lilting tripe when so many are truly suffering. Perhaps the recruiters are enjoying the “opportunities” presented. Most of us don’t share that perspective in the least.

      I agree with Jennifer, and add that the government is doing nothing to stop the bleeding of jobs and dollars to developing economies. Those economies are already bidding against us for food grown in our own soils with our own dollars. This is ludicrous. This is more than an economic issue, it is an issue of national security and nobody in government or corporate America (U.S.) seems to care as long as they can profit from it. Virtually every dollar sent overseas is lost to our own economic growth. The FED is printing money at an alarming rate and giving it to the same banks that crashed the economy. They have learned NOTHING!

      • Armond Matevosian says:

        In this society it’s taboo to talk about the truth…you’ve got to put on a game face and smile and fake it all the time…otherwise you’ll never get a job with “a bad” attitude.

        • Clay Scott says:

          Great Link Armond. That expresses many of my thoughts. I agree a positive attitude is a good thing, but denying reality is just absurd.

  3. Beez says:

    Maybe if our stats were more accurate we would have a better understanding of the hard times. http://www.statisticsblog.com/2013/03/minding-the-reality-gap/

  4. Deb Hester says:

    Let’s not forget to add social security & medicare cut backs into the fray. Along with sky rocketing health care and long term care costs.

    While this article may be a bit self-serving, it’s pretty much right on according to what I’ve seen & heard. & pretty well written, IMHO!

  5. Jennifer L. Moore says:

    I’m not an economist, but I feel we are actually in a depression, and no one wants to admit it. I see it all around me, every day.

  6. Anita Adams says:

    I agree… we’ve not seen the end by any means. And as someone said to me not long ago, … it’s so time that every one ‘Be Kind to each Other’ & know life isn’t easy & we’re all doing the best we can.

  7. Debbie Ivanov says:

    I can attest that it’s far from over, as many Oregonians would agree. I haven’t had a permanent job for over 3 years, which also means no benefits. Retirement? Well, let’s just say I hope I can work till I’m 80! Not complaining, cuz I believe God will take care of me, but yeah…not quite over yet! 🙂

    • Linda Johnson, CAP says:

      Well, Debbie, to look on the bright side, just be glad you’re not in a low-wage, always-economically-depressed state like Tennessee! you’ll make more part time in Oregon than three people with “good” jobs in TN!

  8. Armond Matevosian says:

    The recession hasn’t ended… it’s just been sugar-coated with icing so thick that even the tiny cardboard underneath looks like a giant cake ready to be eaten.

    A well executed plan, I might add, by the charlatans in the White House, Senate, and Congress…let’s throw in the banks and hedge fund managers too (only they are above the law).

  9. Stella Seitei says:

    A recovery can also be prolonged especially when it follows a recession. Indeed the current times are not the easy ones,

    Recession is here, the more we wish it away at the beginning of each year, the longer it pulls, let us accept it, and maybe then we can manage it better…

  10. Hello, everyone! Thanks for reading and commenting!

    The definition of “recession” vs. “expansion” is somewhat arbitrary. The NBER uses GDP as their defining measurement. A negative GDP growth rate = a recession, and a positive one = an expansion. That of course means a recession can end and an expansion can begin well below the GDP level people have been accustomed to.

    Now, they use GDP, which is one thing. But employment is quite another. You can, of course, have GDP expansion while laying off workers. Workers left in the labor force must become more productive, but we have a need for fewer of them, and so the excess gets laid off. Voila: Fewer jobs, more people not working, but GDP growth in spite of that.

    What we are also seeing – and perhaps if Vitaver gives me the green light there will be a future column on it – is that corporations are actually quite profitable right now – but they aren’t reinvesting those profits back into employing people, for a variety of reasons. So you have the curious situation of an expanding economy (in GDP terms, not employment!), strong corporate earnings, and yet a contracting or stagnant work force. This is particularly acute if you add back in the number of younger workers “hiding” in grad school or law school who would otherwise be productive now, or people who have entered the disability rolls rather than compete for the marginal jobs available. You see that in both the incredible expansion of the number of people on disability, on food stamps and other public assistance who are out of the job hunt, and the declining work force participation rate.

    Jason

  11. Barbara Austin says:

    I’ve just been informed that my job will be abolished at the end of May…so I’m looking. I too am trusting that the Lord will open another door. It’s not over yet as Debbie said. Keep your faith Debbie.

    • Debbie Ivanov says:

      So sorry, Barbara! God & Joyce Meyer have helped me get through! They can you, too!

  12. Sandra Miller says:

    Good luck with the job search.

  13. Helen Cowles says:

    I feel like the country is in a Great Depression even though the government says the economy is improving, I don’t believe it has improved for the majority of people who are out of work. To get an understanding of “true unemployment”, I think the government should do a survey of all people between the ages of 16-75 and find out how many people are still working full time. And then put the results of that study out and that should be the true unemployment. I believe the true unemployment and under-employment rate is closer to 60%. When my unemployment money runs out, I believe that I won’t be counted as unemployed because I won’t be getting unemployment benefits, but I will still consider myself unemployed since I will still be looking for a full time job. If I get discouraged and quit going to job boards to apply for jobs and I focus on networking and social media, does that mean that I’m no longer unemployed? I think the only way someone shouldn’t be considered unemployed is if they are out of work by their own choice such as if someone has enrolled in school full time or is a full time mother or father.

    • Debbie Ivanov says:

      I agree, Helen! I’m sure I’m not counted because I’m not getting unemployment any longer. But I still don’t have a permanent position, nor do I have benefits, so I am still financially stretched. I, too, think the number is much higher.

  14. Sandra Miller says:

    “The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. During periods of recession, an economy usually experiences a relatively high unemployment rate.[2] According to International Labour Organization report, more than 197 million people globally are out of work or 6% of the world’s workforce were without a job in 2012” “Hidden, or covered, unemployment is the unemployment of potential workers that is not reflected in official unemployment statistics, due to the way the statistics are collected. In many countries only those who have no work but are actively looking for work (and/or qualifying for social security benefits) are counted as unemployed. Those who have given up looking for work (and sometimes those who are on Government “retraining” programs) are not officially counted among the unemployed, even though they are not employed. The same applies to those who have taken early retirement to avoid being laid off, but would prefer to be working. As well, persons on disability benefits do not count as unemployed”

    This information is from Wikipedia. In other words the calculation is not accurate because it does not include all the people that are actually unemployed.

    Sometimes I think it’s all just a big lie!!!!!!

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