Jobless Rate Doesn't Tell the Story
The economic downturn that began in 2008 is now known as the "Great Recession," and a new study shows it might even be "greater" than originally thought. The survey titled "Diminished Lives and Futures" was released days ago by the John J. Heldrich Center for Workforce Development at Rutgers University. It surveyed nearly 1,100 adults nationwide to measure the true effects of the recession. The result was that the true impact continues to go beyond the current unemployment rate of nearly 8%. "Twenty-five percent of the American people have been affected by it," says Clark Hodges, a financial strategist with Dallas-based Hodges Capital. Indeed, the survey revealed nearly a quarter of people have had a job loss of some sort in the past five years, and nearly 80% say they know someone who has lost a job.
Hodges isn't surprised by the results. "It just goes to show what a deeply-rooted issue it's been for mostly all Americans in recent years, especially people trying to find a job worthy of their education," he says. The study also showed a majority think it will be at least six years before the economy fully recovers, and 30% think it will never fully recover. Hodges agrees that the results are bleak, but isn't quite that pessimistic. He points out some areas of the economy have already roared back. "The stock market has done pretty well over the last 18 months, and that is something that nobody thought would happen," he says. Just last week, the Dow Jones Industrial average closed above 14,000 for the first time since October 2007.
Despite encouraging signs on Wall Street, another major factor is coming down the pike starting this year that Hodges predicts will continue to strain the job market: Obamacare. "There'll be a lot of employees laid off yet, and there'll be a lot of employees moved from full-time to part-time work to avoid the healthcare stipulation," he says. "I think we're gonna be on kind of shaky ground for the next year." Most of those surveyed tend to agree with him. The study showed just a third of Americans believe the economy will be better next year.
Read the full "Diminished Lives and Futures" report here.