The Effects of the Great Recession on American Workers: What it Means for Workforce Policy and Practice

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Facts and figures that show the personal, emotional, and financial impact of unemployment.

Facts and figures that show the personal, emotional, and financial impact of unemployment.

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  • 1. The Effects of the Great Recession on American Workers:What it Means for Workforce Policy and PracticeCarl Van Horn, Ph.D.Professor and DirectorJohn J. Heldrich Center for Workforce Developmentand Edward J. Bloustein School of Planning and Public PolicyPresented to the International Association ofJewish Vocational Services, Toronto, CanadaMay 2, 2011www.heldrich.rutgers.edu
  • 2. The Effects of the Great Recession on American Workers2An Unprecedented Recession The nation’s longest recession Highest official unemployment rate in 30 years Over 17 million officially unemployed; millions morediscouraged or underemployed 8.5 million jobs lost since December 2007 Longest average length of unemployment in 62 years
  • 3. The Effects of the Great Recession on American Workers3The Unemployment ExperienceSource: Van Horn, C., and Zukin, C., “The Anguish of Unemployment,” New Brunswick, NJ: John J. Heldrich Center forWorkforce Development, Rutgers University, September 2009.89%55%53%84%78%60%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Not a Good Chance of Returningto Previous PositionUnemployed for First Time in FiveYearsNo Health InsuranceNo Severance PayLaid Off, Less than Two WeeksNoticeLaid Off Without Warning
  • 4. The Effects of the Great Recession on American Workers4Employment Status of Workers Who Lost JobsDuring the RecessionAugust 2009 March 2010 November 2010Unemployed andLooking75% 54% 54%Unemployed, NotLooking, Discouraged5% 13% 13%EmployedFull timePart time, don’twant full time19% 33% 34%(26%)(8%)Total 99% 100% 101%Number ofRespondents1,202 908 764Source: Van Horn, C., and Zukin, C., “Unemployed Workers and the Great Recession: Highlights from the HeldrichCenter’s Work Trends Reports, 2009-2010,” New Brunswick, NJ: John J. Heldrich Center for Workforce Development,Rutgers University, January 2011.
  • 5. The Effects of the Great Recession on American Workers5Employment Status by Demographic GroupsSource: Van Horn, C., and Zukin, C., “Unemployed Workers and the Great Recession: Highlights from the Heldrich Center’s Work TrendsReports, 2009-2010,” New Brunswick, NJ: John J. Heldrich Center for Workforce Development, Rutgers University, January 2011.Employed Not in LaborForceUnemployedand Lookingfor WorkTotal % TotalNumberAge18 - 34 41% 12% 47% 100% 16135 - 54 32% 12% 57% 101% 33255+ 21% 17% 62% 100% 271EducationHigh school or less 33% 17% 51% 101% 198Some college 28% 5% 67% 100% 265Bachelor’s degreeor higher43% 14% 42% 101% 301GenderMale 35% 13% 53% 101% 378Female 31% 13% 56% 100% 386Race/EthnicityWhite, non-Hispanic37% 12% 51% 100% 542Black, non-Hispanic/Other,non-Hispanic/Hispanic29% 11% 60% 100% 150IncomeLess than $30K 27% 14% 60% 101% 245$30K - $60K 29% 10% 61% 100% 244More than $60K 56% 16% 28% 100% 275
  • 6. The Effects of the Great Recession on American Workers6Duration of UnemploymentSource: Van Horn, C., and Zukin, C., “Unemployed Workers and the Great Recession: Highlights from the HeldrichCenter’s Work Trends Reports, 2009-2010,” New Brunswick, NJ: John J. Heldrich Center for Workforce Development,Rutgers University, January 2011.47%22% 23%24%22%12%15%32%29%10%16%35%0%10%20%30%40%50%60%70%80%90%100%Wave 1 Panel, August2009Wave 2 Panel, March2010Wave 3 Panel,November 20100 - 6 Months 7 Months - 1 Year 1 - 2 Years More than 2 Years
  • 7. The Effects of the Great Recession on American Workers7Severe Financial Impacts of UnemploymentSource: Van Horn, C., and Zukin, C., “Unemployed Workers and the Great Recession: Highlights from the HeldrichCenter’s Work Trends Reports, 2009-2010,” New Brunswick, NJ: John J. Heldrich Center for Workforce Development,Rutgers University, January 2011.Economy hasMajor Impact onFamilyPoor FinancialShapeFamily’s FinancialSituation is WorseCompared to TwoYears AgoHave a “Lot Less” inPersonal Incomeand PersonalSavingsFull Sample 61% 46% 57% 58%Employment StatusUnemployed 67% 60% 61% 65%Long-term unemployed 75% 74% 68% 76%Reemployed 52% 27% 52% 48%Age18 - 34 51% 41% 47% 46%35 - 54 69% 51% 64% 67%55+ 67% 47% 66% 65%EducationHigh school or less 58% 49% 57% 61%Some college 67% 53% 59% 60%Bachelor’s degree orhigher59% 31% 55% 48%GenderMale 61% 49% 61% 57%Female 61% 42% 52% 59%RaceWhite, non-Hispanic 56% 45% 59% 57%Black/Hispanic 69% 48% 54% 61%
  • 8. The Effects of the Great Recession on American Workers8Reduced Spending During the RecessionSource: Van Horn, C., and Zukin, C., “Unemployed Workers and the Great Recession: Highlights from the HeldrichCenter’s Work Trends Reports, 2009-2010,” New Brunswick, NJ: John J. Heldrich Center for Workforce Development,Rutgers University, January 2011.84%77% 76%56% 54% 53% 52%69%53%39%32%32%67%72%0%25%50%75%100%Entertainment Clothing Travel/Vacations Transportation Food Health Care Housing/HomeUpkeepUnemployed Reemployed
  • 9. The Effects of the Great Recession on American Workers9Trying to Make Ends MeetUnemployed, March 201070%42% 41%30%20% 20%18%0%10%20%30%40%50%60%70%80%Used Money fromSavings to MakeEnds MeetWent withoutMedical Care forMyself or My FamilySold Some of myPossessions to MakeEnds MeetUsed Food Stamps Forced to Move toa Different House orApartmentMoved in withFamily or Friends toSave MoneyWent to a SoupKitchen or FreeFood PantrySource: Borie-Holtz, D., Van Horn, C., and Zukin, C., “No End in Sight: The Agony of Prolonged Unemployment,” NewBrunswick, NJ: John J. Heldrich Center for Workforce Development, Rutgers University, May 2010.
  • 10. The Effects of the Great Recession on American Workers10Sinking Deeper into DebtUnemployed, March 201056%45%25% 24%11%6%3%0%10%20%30%40%50%60%Borrowed Moneyfrom Family orFriendsIncreased CreditCard DebtMissed a CreditCard PaymentMissed a Mortgageor Rent PaymentBorrowed MoneyAgainst Your Houseor from a BankDeclared PersonalBankruptcyLost my Home toForeclosureSource: Borie-Holtz, D., Van Horn, C., and Zukin, C., “No End in Sight: The Agony of Prolonged Unemployment,” NewBrunswick, NJ: John J. Heldrich Center for Workforce Development, Rutgers University, May 2010.
  • 11. The Effects of the Great Recession on American Workers11The Emotional Costs of UnemploymentAugust 2009 and March 20107975696754 5448 4742495347 4636 353123170102030405060708090Stressed Eager NewStartDepressed Anxious Helpless Angry Hopeless Hopeful MotivatedAugustMarchSource: Borie-Holtz, D., Van Horn, C., and Zukin, C., “No End in Sight: The Agony of Prolonged Unemployment,” NewBrunswick, NJ: John J. Heldrich Center for Workforce Development, Rutgers University, May 2010.
  • 12. The Effects of the Great Recession on American Workers12Personal Impacts of Unemployment61%41%58%52%62%10%55%60%44%51% 52%68%13%43%63%46%52%55%71%14%46%0%10%20%30%40%50%60%70%80%Change in SleepingPatterns/Loss of SleepLoss of Contact withClose FriendsStrain in Family Relations Avoid Social Situationswith Friends andAcquaintancesUneasiness orRestlessnessSubstance Dependency Quick to AngerAll Unemployed in August 2009 All Unemployed in March 2010 Unemployed in August and MarchSource: Borie-Holtz, D., Van Horn, C., and Zukin, C., “No End in Sight: The Agony of Prolonged Unemployment,” NewBrunswick, NJ: John J. Heldrich Center for Workforce Development, Rutgers University, May 2010.
  • 13. The Effects of the Great Recession on American Workers13Policy Changes Extend and reform Unemployment Insurance; ensurecoordination with reemployment services Enhance advance warning laws; more robust rapidresponse Incent lifelong learning opportunities with emphasis onattainment of certificates and degrees Bolster resources for the Workforce Development System
  • 14. The Effects of the Great Recession on American Workers14Practice Reforms Link workforce development with economic developmentand employer needs Build stronger connections with other organizations thatserve the unemployed Expand on-the-job training and apprentice programs Enhance labor market intelligence to help job seekers Set and enforce standards for program quality
  • 15. The Effects of the Great Recession on American Workers15Contact InformationCarl Van Hornvanhorn@rutgers.edu732.932.4100 x6305www.heldrich.rutgers.edu