Even now, you run into an older relative and survivor of the Great Depression who still squeezes dimes.
Last week, the PBS series about the Roosevelts and how FDR dealt with the Depression provided a good reminder of how wrenching it was. It’s understandable that it left deep scars on the American psyche.
The collapse of the housing bubble and financial system implosion in 2008 and the resulting Great Recession weren’t nearly as dire. Still, they were serious enough to again wound many Americans.
Perhaps that’s why surveys are finding that despite recent continuing signs of improvement in the economy, Americans are still gloomy.
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The title of one recent national survey, by the John J. Heldrich Center for Workplace Development at Rutgers, said it all, “Unhappy, Worried and Pessimistic: Americans in the Aftermath of the Great Recession.”
The Star’s Workplace reporter, Diane Stafford, covered the initial release of the survey in late August. She reported on the survey’s striking data showing that the proportion of Americans agreeing the recession had permanently changed the country was rising; that more felt insecure in their jobs; and that more thought prospects for the future for both the young and the elderly were continuing to decline.
The center on Monday released another report that looked at the attitudes of the long-term unemployed. It’s similarly depressing, and you can read Stafford’s report on it on Page 1 of Monday’s paper.
I was struck by another startling finding in the center’s August report that also goes directly against the grain of the recent improving economic numbers: Just 6 percent said the economy will fully recover from the recession in 1-2 years. Thirty percent said it would take 3-5 years; 24 percent said 6-10 years.
But here’s the kicker. Thirty-six percent said the economy will never fully recover.
The authors of the Heldrich Center survey say jobs are the main reason for the continuing stress reflected in their surveys. “The economy,” they note, “needs another 7 million jobs to return to the full employment experienced at the beginning of the century.”
Just last week, Fed chairwoman Janet Yellen pointed out that a Fed survey had found that a $400 unexpected bill would force the majority of American families to borrow money, sell something or simply not pay.
I’ll offer another less-obvious reason that may weigh on the psychology of many Americans. The recession came just as the Baby Boomers began to step out of the workforce in huge numbers.
Instead of the secure retirements they had planned and thought they had saved enough for, they had to collectively slap their heads in dismay and face the prospect of a diminished life.
For many, working longer to try to remedy things wasn’t even an option as the jobs they had built decades-long careers around simply vanished.
Another recent Fed study estimated that boomers retiring early or being jettisoned from the workforce and not able to find another job was the biggest factor in the drop in the labor force participation rate. It explains about half of the decline to 62.8 percent, the lowest since the late 1970s.
So boomers have had to save more and spend and consume less. The resulting slow-growing economy doesn’t produce enough jobs — across the entire workforce.
The boomer gloom has cascaded down to their children and younger generations, and you get the pessimism reflected in the Heldrich Center reports.
All this is enough to make even me throw my congenital optimism out the window and accept that many Americans today will be squeezing dimes for quite a while, just as Great Depression generations did.
Two follow-on points from William A. Galston of Brookings writing in The Wall Street Journal:
▪ Though the aging of the population accounts for some of the decline in the labor force participation rate, “it cannot explain why participation among prime-age workers between 25 and 54 stands at only 81 percent, more than 2 points below its level in 2007 before the recession.
▪ Americans’ views about their economic prospects “have political consequences.” By 59 percent to 37 percent, Global Strategy Group found that Americans prefer a candidate who focuses on economic growth to one who emphasizes economic fairness.
“By a remarkable margin of 64 percentage points (80 percent to 16 percent), they opt for a candidate who focuses on more economic growth to one who emphasizes less income inequality.”