By James Limbach
ConsumerAffairs.com
September 7, 2009
A comprehensive national survey conducted among 1,200 Americans nationwide who have been unemployed and looking for a job in the past 12 months, including 894 who are still jobless, portrays a shaken, traumatized people coping with serious financial and psychological effects from an economic downturn of epic proportion.
The survey, conducted by the John J. Heldrich Center for Workforce Development at Rutgers University, shows the recession of 2007-2009 may have long-lasting financial and psychological effects on millions of people, and therefore on the nation's social fabric.
Two-thirds of those surveyed say they are depressed, over half have borrowed money from friends or relatives, and a quarter have skipped mortgage or rent payments. It also finds that 60 percent of the recently unemployed lost their jobs suddenly, without advance warning. Eight in ten got two week's notice or less. Just 15 percent of the jobless received any severance, and virtually none were offered retraining.
Three in four unemployed workers say the economic situation has had a major impact on them and their family. Only 40 percent of the currently unemployed received unemployment insurance to help them weather the economic downturn and 83 percent of those who did receive aid are concerned that their benefits will run out before they find a job. Underscoring another important debate, only half of the jobless have health benefits.
More than half of the jobless think the changes in the economy will be fundamental and lasting, and when the unemployed are asked when the economy will recover, only 20 percent believe it will do so in the next year.
Over half of the unemployed have lost their jobs for the first time, while 40 percent had held the same job for three or more years. Nor do these veteran workers believe their employers will hire them back: 80 percent say they do not expect that they have much chance of returning to the place they once worked, even though most workers (72 percent) held what they had thought were permanent jobs.
Job loss is hitting more affluent workers and educated professionals hard -- a metric of the recession's seismic impact. More than one in four of those who were unemployed for the first time earned $75,000 or more in their previous job; one in four first-time unemployed workers have at least a four-year college degree.
"Millions of unemployed Americans are suffering economic and personal catastrophes," said Carl Van Horn director of the Heldrich Center and co-director of the Work Trends series that has surveyed the American workplace since 1998. "This is not your ordinary dip in the business cycle. Americans believe that this is the Katrina of recessions. Folks are on their rooftops without a boat. The water is rising, and many see no way out."
The survey's financial picture is discouraging in its implications for the economy and for Americans who are still unemployed. Nearly all the jobless have cut back on spending; most have postponed a vacation or planned home repair (70 percent) and more than half report using money set aside for other purposes, such as retirement or education.
Over half (56 percent) report borrowing money from family or friends and one-third have increased their credit card debt. About a quarter have missed a mortgage, rent, or credit card payment.
More of the jobless say it is government's responsibility to ensure the jobless have a safety net, than say it is the individual's responsibility to better their own situation.
"The proportion of people who have been forced to move is in double-digits," said Cliff Zukin, senior fellow at the Heldrich Center Work Trends series, "and a non-insignificant number have been forced to declare bankruptcy. The jobless have had to face the fact that their old jobs, incomes, and work identity are gone. They are our neighbors, our former colleagues, and they are living in a world of hurt."
The personal and family impact on the respondents suggests a mental health epidemic that could have long-lasting effects on people's willingness to spend, invest, save, and take risks.
Three-quarters of the still-jobless report stress in their daily lives, two-thirds report being depressed, three-fifths feel helpless, and more than half say they're angry. Significant numbers report having trouble sleeping, avoiding social situations, strained family relations, and increased substance dependency.
Despite their anguish, the jobless continue to search for work. While the unemployed are frustrated with their efforts, their determination to persevere is confirmed in survey data and verbatim comments. The currently unemployed are split whether they are optimistic or pessimistic about their chances for finding a new job. But, they understand the job-hunting situation to be dire.
Less than one-third believe they will be employed within four months; many simply are not sure and are living with this concern on a daily basis. Three-quarters say they would take a cut in pay to be working; a similar number say they might have to change careers in order to gain employment. While about half of the unemployed have been on a job interview, just 15 percent say they were offered a job.
