More Than Half Of National Workforce Hurt By Recession

Pew Research Center’s Social and Demographic Trends Project also reports that “the recession has led to a new frugality in Americans’ spending and borrowing habits; a diminished set of expectations about their retirements and their children’s future; and a concern that it will take several years, at a minimum, for their family finances and house values to recover.”

In a sign that the Main Street view of the economy is different from that of many professional economists, 54% of those surveyed say that America is still in the midst of a recession.The study’s results are another example of why the U.S. economy is not in the midst of the recovery that Washington says it is. GDP is still based about 65% on consumer spending. There is little sign that the consumer’s desire to part with money is improving a great deal. Same-store sales among retailers show choppy improvement at best.

There are also signs that consumer confidence has dropped sharply in the last several weeks. The Conference Board Consumer Confidence Index dropped to 52.9 in June from 63.3 in May. Experts has expected the number for the current month to be 62.8 . The news helped send the stock market down more than 2%.

There are also indications that companies are taking advantage of high unemployment to rely on part-time workers who make modest pay and get no benefits. This creates a financial buffer for firms that are worried about the economy. It also allows enterprises to increase productivity by keeping the number of full-time workers at a minimum.

The number of people who will enter the desperate part of their unemployed life will likely move up as Congress failed to pass legislation to extend unemployment benefits until November. That will pull the last social safety net out from under nearly two millions Americans and will grow by tens of thousand of people each month as more and more jobless are out of work for more than 26-weeks.

Pew’s number of 54% of people’s work being affected by the recession may be high, but in future months, it could go higher.

The Pew Research Center survey of 2,967 adults was conducted from May 11 to May 31, 2010, on cellular and landlines telephones and also on a Pew Research analysis of government economic and demographic data.

Douglas A. McIntyre