Home » Business » Recession’s Toll

Recession’s Toll

The Great Recession has disrupted life at home and in the workplace.

By Hope Yen October 10, 2009 at 9:12 AM

Font size:

The recession is profoundly disrupting American life: More people are delaying marriage and home-buying, turning to carpools yet getting stuck in ever-worse traffic, staying put rather than moving to new cities.

A broad array of U.S. census data also shows a dip in the foreign-born population last year, to under 38 million after it reached an all-time high in 2007. This was due to declines in low-skilled workers from Mexico searching for jobs in Arizona, Florida and California.
Health coverage swung widely by region, based partly on levels of unemployment. Massachusetts, with its universal coverage law, had fewer than one in 20 uninsured residents — the lowest in the nation. Texas had the highest share, at one in four, largely because of illegal Hispanic immigrants excluded from government-sponsored and employer-provided plans.

Demographers said the latest figures from the annual American Community Survey, a sweeping look at life built on information from 3 million households were striking confirmation of the social impact of the economic decline as it hit home in 2008. Preliminary data earlier this year found that many Americans were not moving, staying put in big cities rather than migrating to the Sunbelt because of frozen lines of credit. Mobility is at a 60-year low, upending population trends ahead of the 2010 census that will be used to apportion House seats.
“The recession has affected everybody in one way or another as families use lots of different strategies to cope with a new economic reality,” said Mark Mather, associate vice president of the nonprofit Population Reference Bureau. “Job loss — or the potential for job loss — also leads to feelings of economic insecurity and can create social tension.”

“It’s just the tip of the iceberg,” he said, noting that unemployment is still rising.

The percentage of people who drove alone to work dropped last year to 75.5 percent, the lowest in a decade, as commuters grew weary of paying close to $4 a gallon for gasoline and opted to carpool or take public transportation.

Twenty-two states had declines in solo drivers compared with the year before, with the rest statistically unchanged. The decreases were particularly evident in states with higher traffic congestion, such as Maryland, Texas and Washington.

Average commute times edged up to 25.5 minutes, erasing years of decreases to stand at the level of 2000, as people had to leave home earlier in the morning to pick up friends for their ride to work or to catch a bus or subway train.

Palmdale, Calif., a suburb in the high desert north of Los Angeles, posted the longest commute at 41.5 minutes. It barely edged out New York City, with its congestion and sprawling subway system, at 39.4 minutes. Shortest commute time: Bloomington, Ill., at 14.1 minutes.
Nationwide, more than one in eight workers, or 17.5 million, were out the door by 6 a.m.

Marital bliss also suffered. Nearly one in three Americans 15 and over, or 31.2 percent, reported they had never been married, the highest level in a decade. The share had previously hovered for years around 27 percent, before beginning to climb during the housing downturn in 2006.

The never-married included three-quarters of men in their 20s and two-thirds of women in that age range. Sociologists say younger people are taking longer to reach economic independence and consider marriage, because they are struggling to find work or focusing on an advanced education.

The Northeast had the most people who were delaying marriage, led by states such as New York and Massachusetts. People in the South were more likely to give marriage a try, including those in Arkansas, Tennessee and Texas.

The dip in foreign-born residents comes as the government considers immigration changes, including stepped-up border enforcement and a path toward U.S. citizenship. At nearly 38 million, immigrants made up 12.5 percent of the population in 2008; an estimated 11.9 million are here illegally.

In three large metro area, Miami, San Jose, Calif., and Los Angeles, more than one-third of all residents are foreign-born.
Roughly half the states showed declines in the number of immigrants from 2007 to 2008. Major metro areas also posted decreases, including Los Angeles, Phoenix, Detroit and Tampa, Fla. An influx of workers from India, who came looking for specialized jobs in telecommunications, manufacturing, computers and software, partially offset the national immigration decrease.

About one in five U.S. residents spoke a language other than English at home, mostly clustered in California, New Mexico and Texas.
The number of foreign-born and minority residents often tracked closely with how a state ranked in the levels of uninsured.
The highest numbers were in agricultural communities with large Hispanic populations in California’s San Joaquin Valley, South Texas and South Florida. Regions in New Mexico, Nevada, Arizona, Alaska, Oklahoma and Georgia also fared poorly.

The numbers help explain why the debate over illegal immigration and health insurance is so heated.

“The fact that many election ‘swing states,’ with large and growing Hispanic populations, rank low on health insurance for children and young adults points to the significance of this issue for both parties in future national elections,” said William H. Frey, a demographer at Brookings Institution, a think tank.

Democratic proposals to overhaul health insurance would exclude illegal immigrants from benefits, but Republicans contend the prohibition is meaningless because of lax enforcement. President Barack Obama has now proposed broader and tougher restrictions; opponents say the steps are still not enough.

Other findings:
• The homeownership rate fell to 66.6 percent last year, the lowest in six years, after hitting a peak of 67.3 percent in 2006. Residents in crowded housing jumped to 1.1 percent, the highest since 2004, a sign people were “doubling up” with relatives or friends to save money.

• The share of people who carpooled to work rose to 10.7 percent, up from 10.4 percent in the previous year. Commuters who took public transportation increased to 5 percent, the highest in six years, with Washington, D.C., at the top.

• Women’s average pay still lagged men’s, but the gap has been narrowing. Women with full-time jobs made 77.9 percent of men’s pay, up from 77.5 percent in 2007 and about 64 percent in 2000.

• More people are getting college educations. Only two states, Texas and Mississippi, had at least one in five adults without college diplomas. This is down from 17 states in 2000 and 37 in 1990.

• More older people are working. About 15.5 percent of Americans 65 and over, or 6.1 million, were in the labor force. That’s up from 15 percent in 2007.

Great Recession Transforms Workplace

The Great Recession has reshaped the American workplace and work force in ways that will last years.

The work force is graying as college graduates can’t find jobs, young workers get laid off and older workers delay retirement. People in white-collar jobs are feeling increasingly vulnerable to economic downturns, an insecurity that blue-collar workers have known for years.
Perhaps the most enduring change is the permanent loss of millions of jobs across the manufacturing, services and retail sectors.

For textile factories and service sector employers like customer service call centers, the next wave of significant job creation will occur abroad, where labor is cheaper. That trend was under way before the recession and will accelerate, according to labor economists. Americans who would have held these jobs will have to retrain themselves for other jobs, such as assembling microchips and medical devices.

For retailers, growth will be limited by more cautious consumer spending, in part because the days of easy credit are over. That means fewer retail clerks milling about stores around the holidays, and fewer merchandise buyers and other staff jobs at headquarters.
“We’re in a very deep jobs crisis, and we’re not coming out of it,” says William George, professor of management at Harvard Business School. “It’s too glib to say that jobs are a lagging indicator” and that hiring will return to normal once the economy does, he says.

The national unemployment rate, now 9.7 percent, is forecast to rise above 10 percent before the end of the year and isn’t expected to return to a “normal” level near 5 percent until 2014.

Of course, layoffs aren’t the only thing transforming the workplace. Through furloughs, fewer shifts and other cutbacks, employers have reduced the average work week to a near-record low of 33.1 hours.

Reducing hours of all workers instead of eliminating jobs of a few is a strategy that had slowly been gaining favor in recent years because it saved companies money in several ways: It reduced the need for severance packages, as well as the cost to rehire and train these new workers once the economy rebounded.

The practice became much more widespread during last year’s financial crisis and is likely to be repeated in future recessions, says Peter Cappelli, professor of management at the University of Pennsylvania’s Wharton School of Business.

No matter how creative companies get at cost-cutting, or how strong the recovery is, millions of jobs will never come back.

Over the past year, the U.S. non-farm payroll has shrunk to about 131 million people, a decline of more than 5.8 million auto workers, stock brokers, bankers, landscapers, carpenters, truckers, journalists, mechanics, cooks, maids and more. More than 1.6 million manufacturing jobs have disappeared in the last 12 months, along with 1 million construction jobs and 435,000 financial sector jobs.

In low-skilled manufacturing, the U.S. can’t compete with countries like China, India or Mexico where labor costs are a fraction of those here. Likewise, cost pressures will continue to push information technology jobs overseas.

A record 4.98 million people had been out of work 27 weeks or longer in August, in part because this recession, which started in December 2007, has stretched longer than any since World War II.

That has forced a record number of people into part-time work. People forced to work part-time jobs because they can’t get full-time positions has jumped 54 percent from a year ago to 9 million.

About 40 percent of workers are now over 55 or older, the highest level since 1961, according to a Pew Research Center survey released this summer. More workers are delaying retirement for economic and personal reasons, locking up jobs that are sought by younger workers entering the work force.

Among white-collar workers, job security began to disappear in the recession of the early 1990s as technology allowed jobs to be shipped abroad. It may be gone now.

Over the past year, the unemployment rate jumped 64 percent for managers and professionals like lawyers, doctors and fund managers. That compares with a 56 percent increase in overall unemployment, according to Labor Department data.
— Jay Reeves and Christopher Leonard

Share on: