Understanding who won… and who lost during this Great Recession can enable us to better prepare for what’s next. Let’s first look at who got clobbered by the recession that began in 2008:
Middle-Income Households—the Pew Research Center found that their average median wealth fell by 23% between 2007 and 2009.
People without college degrees—Pew Research also found that unemployment for workers without a high school diploma grew from 7.7% to 15.3% from 2007-2009; while unemployment remained less than 5 percent for those with college degrees.
Children—the percentage of poor working families grew from 27% in 2002 to 31.2% today. Those working families with children were hurt even more. 57% of all U.S. children today are in low-income or poor families.
Home Sellers—Home prices got clobbered. Need I say more?
Pre-retirees—the unemployment rate for those age 55 to 64 more than doubled and way too many are still looking for jobs.
College grads—recent college grads are seeing the worst unemployment rate in 60 years…18.4%. Even those that found jobs have had to take a 10% pay cut from what grads were paid before 2007. When you add their average school debt load, these grads may have been hurt the worst of all. Historical evidence shows that this group may never fully catch up.
The Wealthy—their household net worth went down ½ as much as the middle-income families. The reason? More diversified portfolios and they did not have to tap those portfolios.
Home Buyers—Houses 25% cheaper than 2007 and home mortgage interest rates at 50 year lows make this the best environment for buying a home since 1970, according to the National Association of Realtors.
Teenagers—this is an interesting one. Don Peck, author of “Pinched” points out that in Depression of the 1930’s, people in their 20’s really struggled for the rest of their lives. Teens however fared well and became what’s called, “The Greatest Generation.”
“Teens were called upon to pick up the slack at home and provide emotional support while both parents worked to support the family. They learned to delay gratification, were more civic-minded, more committed to family, and had a more can-do attitude”, says Peck.
Could that same phenomenon be occurring right under our noses?
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