Nationwide Work Trends Survey Explores the Misery and Bleak Expectations of Unemployed U.S. Workers
A new nationwide survey by the John J. Heldrich Center for Workforce Development, conducted in August 2011, finds that 41% of Americans who lost a job before being first surveyed two years ago are either unemployed (33%) or employed part time but looking for full-time jobs (8%). The number employed either full or part time now stands at 43%, while the remaining 17% are not in the labor force. Just one-quarter of those over age 50 first surveyed in 2009 now have a full-time job. “Out of Work and Losing Hope: The Misery and Bleak Expectations of American Workers” provides an in-depth portrait of the victims of the Great Recession, many of whom have been actively seeking work since the summer of 2009.
Three-quarters of the currently unemployed have been out of work for more than six months and fully half have been out of work for more than two years. Three-quarters of these long-term unemployed say the recession has had a major impact on their families; 60% say they have borrowed money from family or friends to make ends meet. The same number report cutting back on food and health care to the extent that it has made a difference in their daily lives.
Among those fortunate enough to find work, over half settled for lower pay; nearly one-third saw their job-related benefits cut. Just 57% believe their new jobs will be permanent and a similar number say they took the job just to get by while looking for something better. About 45% found themselves employed in an area extremely different from where they had been working. Although grateful for their opportunities, reemployed workers describe their new job as a step down rather than a step up by a margin of almost two to one.
The percentage saying the U.S. economy is experiencing fundamental and lasting changes has grown from 52% in August 2009 to 71% in August 2011. Despite the formal “end” of the recession in June 2009, just 29% say the economy is in a temporary downturn, compared to 48% who thought this way in August 2009.
Tracking Unemployed Workers for Two Years
The Heldrich Center first surveyed a national sample of 1,202 unemployed workers in August 2009, using the web-enabled KnowledgePanel® conducted by Knowledge Networks of Palo Alto, CA. In order to understand their experiences during the difficult economy, the Heldrich Center re-contacted as many of the initial survey respondents as it could and was able to survey over 900 of the original participants in March 2010, 764 in November 2010, and 675 in August 2011.* The sampling error for this wave of the survey is approximately +/- 4 percentage points.
Among the other main findings of the survey:
–Half of all those surveyed report a major change in their lifestyle since 2009. In that time, one-third say they have had to give up something they had previously considered essential. Half have cut down on their expenditures for food; 44% have cut back so much on health care that it has made a notable difference in their daily life.
– The unemployed and formerly unemployed remain in dire economic straits. Only 19% rate their personal financial situation as either “excellent” or “good.” Another 37% say they are in “only fair” shape and almost half (45%) describe their financial condition as flat out “poor.”
– Retirement plans have also been drastically altered by workers’ stay on the unemployment rolls. Some 70% say they have changed their plans in this area, with equal numbers (35%) saying they plan to retire earlier and later than they had originally planned. Half of those over 50 now say they plan to take Social Security as soon as they are able, up from 41% in the November 2010 survey.
– Fully 7 out of 10 of the long-term unemployed say they are in poor financial shape. Over three in four say that the recession had a major impact on their family. Sixty percent have sold possessions and the same number has borrowed money from family or friends. The majority (55%) believe that their new, lower standard of living will be permanent. The long-term unemployed are more likely to be middle-aged (30-59 years) and have less than $30,000 in family income than other job seekers.
– After two years out of work, more than 60% are pessimistic about finding a new job anytime in the near future. Three out of four believe the current U.S. economy has undergone a lasting change for the worse.
“No group has suffered more from the Great Recession than the very long-term unemployed. The grim reality is that millions of workers with valuable skills and experience still cannot find a full-time job,” commented Carl Van Horn, Professor and Director of the Heldrich Center and a co-author of the study. What Should the Government Do? With the national unemployment rate remaining above 9% for the past two years, pressure is building for new policies to create jobs and help those who have remained jobless for longer periods than at any time since the Great Depression. Professor Van Horn observed, “The workers we surveyed, who represent the views of millions of unemployed Americans, are eager — if not desperate — for the government to create policies that will bring down high unemployment and grow the economy.“
The survey finds significant support for all of the policy options tested — from direct job creation to cutting spending and taxes. In rank order, the panel members supported:
– Longer training programs to enable workers to change careers (78% in favor).
– Business tax credits for hiring additional employees (70%).
– Direct job creation programs for the unemployed (69%).
– Further extension of Unemployment Insurance benefits (61%).
– Requiring Unemployment Insurance recipients to enter training in order to receive Unemployment Insurance benefits (60%).
The difficulty policymakers may face in finding a common ground is revealed by the fact that two of three respondents also favor cutting government spending to reduce the deficit. Though it is possible to increase spending on jobs programs while also reducing overall spending, such policies would lead to significant reductions in other popular government programs, such as defense and entitlement programs and/or increase taxes on some or all Americans.
Unemployment Insurance (UI)
One finding that should be of great interest to lawmakers as they weigh whether to extend UI programs is the fact that the unemployed workers who received UI benefits were more likely to actively look for new jobs than those who did not receive UI benefits. Among survey respondents, UI payments did not prove to be a disincentive for seeking work. Those receiving benefits report spending more time each week going to job interviews, networking with friends and colleagues, scouring the Internet and newspapers for job openings, and exploring training options.
New Realities for the Workforce
Prospects for improving opportunities for the long-term unemployed will remain uncertain as long as the U.S. economy generates new jobs at a rate that fails to match the natural growth of the nation’s workforce, let alone create opportunities for millions of dislocated workers. The experience of survey respondents who have succeeded in finding new jobs demonstrates that even when people find another job, it is unlikely to provide equivalent pay and benefits to the job they once held.
Professor Cliff Zukin, co-author of the study, concluded, “This fourth round of surveys with the victims of the Great Recession dramatically reveals how deeply the long-term unemployed have suffered during the past two years. The sense of desperation and feelings of helplessness in our respondents are almost palpable. Millions of productive workers have seen their careers stagnate or end and their finances crumble. Many are watching the erosion of what it took a lifetime to build. They are out of work and almost out of hope for themselves and the nation's economy."
The John J. Heldrich Center for Workforce Development is based at the Edward J. Bloustein School of Planning and Public Policy. It is one of the nation’s leading university-based research and policy centers dedicated to raising the effectiveness of the American workplace through improved workforce education, placement, and training. The Center identifies innovative workforce practices and practical policy changes that can help Americans receive the education and training they need to be productive and prosperous in a global knowledge economy.
* The 675 respondents in Wave 4 look like an almost perfect microcosm of the original 1,202. See the methodological appendix accompanying the full report for sample details.