Half of Americans hit by the recession

Jul 01 2010 by Brian Amble Print This Article

More than half of Americans have experienced some sort of work-related fallout as a result of the recession, a far greater proportion than those who appear in official statistics as out of work or under-employed.

According to a new report from the Washington-based Pew Research Center, some 55 per cent of adult Americans have suffered a spell of unemployment, a cut in pay or a reduction in their hours over the past thirty months. Almost a third (32 per cent) of adults have spent some time unemployed over the same period, the report found.

This far exceeds the 9.7 per cent who are officially classified as unemployed or the 16.6 per cent who are either out of work or underemployed.

A majority of Americans (54 per cent) believe that the country is still a recession, with four out of 10 seeing signs of recovery. A mere three per cent believe that the recession is over.

About half of those surveyed (48 per cent) said they are in worse financial shape now than before the recession began. And of those who say their family finances have lost ground, almost two-thirds think it will take them at least three years to recover.

As official data shows, average U.S. household wealth has suffered its biggest decline since World War II, falling by some 20 per cent between 2007 and 2009, largely due to the collapse in the value of both property and retirement accounts.

Unsurprisingly, then, the recession has also made Americans far more frugal and dented their expectations about their own retirement and their children's future, the report finds.

More than six out of 10 of those surveyed say they have cut back on spending since December 2007 with a mere six per cent admitting to spending more. But for an economy fuelled largely by consumer spending, the bad news is that almost a third of Americans say they will continue to spend less than they used to even when things pick up.

Meanwhile, a third of those surveyed said they are not confident that they will be able to finance their retirement, up from a quarter who said the same in February 2009. And among adults ages 62 and older who are still working, a third say they have already delayed retirement because of the recession.

If there is any optimism to take from the report, it is that a small but growing minority (15 per cent) believe that the economy is in good shape, while nearly two-thirds (62 per cent) believe their personal finances will improve in the coming year.

But whether or not the worst is over is a moot point. According to the National Bureau of Economic Research, the U.S. remains in recession. And with few signs of enough jobs being created to replace those lost, fears of a double-dip recession remain very real.