Divided We Stand

by , Oct 20, 2010, 8:15 AM
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According to a recent survey by the Pew Research Center, reported by Rich Morin, Sr. Editor, the Great Recession brought a mix of hardships for 55% of Americans, usually in combination: a spell of unemployment, missed mortgage or rent payments, shrinking paychecks and shattered household budgets. For the other 45% of the country, the recession was largely free of such difficulties. The recession officially began in December 2007 and was recently determined to have ended in June 2009.

About 70% of retirees and other older adults largely held their own during the recession, while a lopsided majority of 20-somethings did not. Easterners are significantly more likely than residents of the South, West or Midwest to have better weathered the economic storm. At the same time, suburban and rural residents experienced fewer problems than city dwellers.

Republicans, too, are disproportionally represented among those who had an easier passage through hard times, while Democrats and political independents are more likely to have lost ground. And as other research has consistently shown, a college diploma is a strong shield against hard times: nearly 60% of college graduates count themselves among the 45% who experienced fewer difficulties during the recession, compared with 38% of those whose educational attainment was a high school diploma or less.

Losing Ground in the Great Recession

Group

% Of Each Group Who Lost Ground

All

55%

Gender

  

Men

55

Women

55

Age

  

18-29

69

30-49

60

50-64

55

65+

30

Ethnic Group

  

Whites

50

Blacks

66

Hispanics

70

Education

  

College

41

Some college

59

HS or less

62

Income

  

$100K+

32

$75K-$99K

44

$50K-$74K

49

$30K-$49k

66

LT$30K

72

Geographic location

  

East

47

Midwest

57

South

56

West

57

City proximity

  

Urban

60

Rural

52

Suburban

53

Political affiliation

  

Republicans

49

Democrats

57

Independents

57

Source: PewResearchCenter, October 2010

Where you live is associated with how you have weathered the Great Recession. About half of those living in the eastern United States were among those who Held their Ground, compared with slightly more than four-in-ten residents of the Midwest, South and East. About six-in-ten city-dwellers were among those who Lost Ground, compared with 53% of all  suburbanites and 52% of those who live in rural areas.

By most broad measures of economic well-being, those who Held their Own and Americans who Lost Ground could hardly be more different, says the report. Among those who disproportionately experienced economic hardships during the recession, 54% say they are just getting by or fall short of meeting their monthly expenses and more than 40% say the recession forced them to make "major" changes in the way they live.

In contrast, 80% of those who Held their Own during the recession say that they're "living comfortably" or that they have money left over each month after paying their bills. And unlike their less fortunate counterparts, not a single one says the recession has forced major lifestyle changes.

What is striking, is the fact that the groups are roughly the same size yet the differences between them are so great.

43% of adults who Lost Ground say they were unemployed at some point during the recession, compared with less than 1% of those who Held their Own. 35% of those who Lost Ground had problems paying their rent or mortgage, while not a single one of those who Held their Own reported similar difficulties. No one who Held their Own during the recession reported having trouble finding or paying for medical care, or having to borrow money from friends or family to pay bills, compared with 48% and 42%, respectively, of those who Lost Ground.

The Two Americas

 

Group

% In Each Group Who:

Held their Own Ground

Lost their Own Ground

Were unemployed at some point during recession

1%

43%

Say recession brought "major" changes to lives

0

44

Had to borrowed money from friends/family to pay bills

0

42

Had trouble finding or paying for medical care

0

48

Had trouble paying rent or mortgage

0

35

Say household finances "worse" now than before recession

29

64

Say family income declined during recession

14

48

Withdrew money from savings, retirement to pay bills

19

60

Average number of hardships

0.6

3.7

Source: PewResearchCenter, October 2010

Nearly half of those who Lost Ground say their family incomes declined during the recession, more than three times the proportion of those who Held their Own. Similarly, nearly two-thirds of those who Lost Ground say their family's overall financial condition is worse now than it was before the recession.

19%)of those who Lost Ground during the recession say they had to increase their credit card debt to pay their bills, compared with 4% of those who Held their Own. 74% of those who suffered the most during the recession say they had to cancel or cut back on vacation travel, compared with 36% of those who Held their Own.

Different Groups, Different Impacts (% In Each Group Who Said Each Was The Biggest Impact Of The Recession On Their Lives.)

Impact

Held their Own

Lost Ground

Changed spending patterns

51

33

Had financial problems

11

21

Had employment problems

10

21

Source: PewResearchCenter, October 2010

Those who Lost Ground are twice as likely as those who Held their Own to have cut back on the amount they saved during the recession, and are significantly more likely to say they cut back on spending. When both groups were asked whether their total amount of personal debt in the form of credit card bills, mortgage loans and other types of loans increased or decreased during the recession, those who Lost Ground were more than four times as likely to say they owed more during the recession than before the downturn began.

More than half of homeowners who Lost Ground during the recession say the value of their home declined in the past 2½ years, compared with 43% of those who Held their Own. While only 13% of all homeowners say their home increased in value, those who Held their Own are slightly more likely to report their house or condo is now worth more than it was before the recession (15% vs. 10%).

However, 77% of those who Lost Ground during the recession agree that "buying a home is the best investment that the average person can make," a belief they share with 83% of those who Held their Own during the recession.

Housing Values Take a Hit

 

 

Group

% In Each Group Who Say

Held Their Own

Lost Ground

Home declined in value

43%

53%

Owe more than their home is currently worth

14

29

Believe it will take longer than five years for their home value to recover

34

43

Source: PewResearchCenter, October 2010

 

More than seven-in-ten respondents answered the question about specific problems. Like:

 

  • "I lost my job"
  • "My sons have moved in because they could not find jobs"
  • "Everybody is in a lot of stress"
  • "I'm not in control of my life"
  •  "We've had to cut back on luxuries and vacations"
  • "We eat out less often and [spend] less money on entertainment"

 

51% of those who Held their Own say the single biggest adjustment they had made during the recession was to change their spending habits, compared with 33% of those who Lost Ground. In contrast, those who Lost Ground during the recession were more likely to name a specific financial problem or a job- related hardship as the way the recession most affected them. 

The report summarizes the major findings of the impact of the recession on each group.

Holding their Own (45% of all adults) No members of this group say the recession has caused them to make "major" changes in the way they live. About half (51%) say the recession changed the way they lived in "minor" ways, while 48% did not change the way they lived at all.

 

  • No member of this group reports problems paying the rent or mortgage.
  • None had to borrow money from friends or family to pay bills.
  • No one in this group reports problems finding or paying for medical care.
  • Less than 1% were unemployed at some point during the recession.
  • Only about one-in-seven (14%) say their family income declined during recession.
  • About two-in-ten (19%) say they withdrew money from savings, retirement to pay bills.
  • About three-in-ten (29%) say their overall household finances are worse now than before the recession.

 

Lost Ground (55% of all adults) More than four-in-ten (44%) say the recession has brought "major" changes in the way they live, and 39% said it has caused them to make "minor" adjustments to their lifestyle. An additional 17% made no recession-related changes.

 

  • More than a third (35%) had trouble paying rent or mortgage.
  • 42% had to borrow money from friends or family members.
  • 48% had trouble finding or paying for medical care.
  • 43% were unemployed at some point during recession.
  • Nearly half (48%) say their family income declined.
  • 60% withdrew money from savings or retirement funds.
  • Nearly two-thirds (64%) say household finances are worse now than before the recession.

 

Please visit Pew Research here for access to the PDF file with more complete information as well as more charts.

0 comments on "Divided We Stand".

  1. Paula Lynn from Who Else Unlimited
    commented on: October 20, 2010 at 10:14 a.m.

    What is missing here is the questions about how many bought homes/used their homes as ATM's/abused their credit cards and how many people fell due to medical bills' abusurdity/loss of health insurance/no health insurance coverage (like retail sales) ?

  2. Byron Wolt from Speak to Students
    commented on: October 20, 2010 at 11:35 a.m.

    Thanks for this information! It was very interesting. What stuck out to me was that those with Republican affiliation did better in these tough times that those with Democratic affiliation, yet it is Republicans that are the most unhappy at this time.

  3. Mickey Lonchar from Quisenberry
    commented on: October 21, 2010 at 11:50 a.m.

    These findings are indeed sobering, especially when you consider America lost 2 million households making $50k or more, and gained 2 million making $35k or less in 2009. More on that here: http://ht.ly/2UklL

    http://www.quisenblog.com

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