How the Great Recession Impacted Floridians

Running head: THE GREAT RECESSION 1
The impacts of the great recession in Florida
Teresa Witte
University of South Florida

Abstract
The main goal for this paper is to explain how the “Great Recession” (2008- ) impacted
Floridians using the two interdisciplinary fields of Psychology and Economics. For the
Economic theory the study focused on the Great Recession Florida suffered from the housing
price bubble in many parts of the country, and a coincident stock market bubble. These problems
evolved into the financial crisis. For the Psychological theory this study primarily focused on the
negative impacts the recession had on Floridians. It is argued that the impact of unemployment
and the ways it is coped with vary according to factors such as people's perceptions of their
situation. This research paper presents results and findings from published studies. These
disciplines provide different interpretations of the impact of the recession on Floridians.
However, the study found that the Recession affected people differently. For instance, for the
Psychological field, the recession revealed that the primary focus has been on its impact and
unemployment. In comparison, using Economics study it reflected that the main concern for
Floridians lead to the problem of the housing bubble. Consequently Florida faced, and continues
to face an extensive financial crisis that has last almost a decade. Moreover, this paper provides
research using quantitative and qualitative data to better explain the phenomenon Recession.
Giving these facts, this research provided essential and valuable information that contributed to
the growing study of how the recession impacted Floridians.

The Impacts of Great Recession on Floridians
The Great recession in Florida also affected my family “We had just moved to our
beautiful home in Port Saint Lucie, Florida after waiting for a long construction process, and jobs
were very stable paying us more than enough money to pay for everything. When the recession
hit, my husband lost his job, and the construction company I was working for seven years went
bankrupt. Consequently, I was let go along with other employees.”
The financial status of every state in America has changed since the onset of the financial
recession, which has affected the major aspects of Americans as a whole (Gladstone, 2012).
These aspects are due to the Floridian’s jobs and income losses because of the household wealth
and house prices decline. Now, this research shall focus on the question regarding the impact that
the Great Recession had specifically on the lives of Floridians. The said effect shall be measured
based on two particular factors: Based on the psychological and economic aspects of human
living, the changes that occurred in Florida concerning the housing bubble and unemployment
among its people shall be examined and analyzed (Gladstone, 2012). Considerably, these two
factors of living were chosen because of the condition by which they specifically define the
manner by which each person tries to understand the changes that occur around them thus adjust
accordingly to such matters. Although the Great Recession for Floridians begin to affect housing
crisis following massive unemployment, today Florida economic situation regain control of its
crisis.
According to economists such as Schiff, the greater cause for concern than the
combination of the expiration of the tax cuts and government spending cuts is the current
national debt and the increased burden that will result from a rise in interest rates (Clabough,

2012). The CBO Project Recession 2013 article reflects an increase in tax rates in 2013,
coupled with government spending cuts, and the economists said it will eventually drive the
economy back into a recession, shrinking it by .5 percent in 2013 (Clabough, 2012).
The Great Recession inflicted a major blow on Florida economy, putting people out of
work, forcing homeowners into foreclosure and shuttering businesses. But some economic
indicators show the economy in some Florida counties is on an upward march. After a long time,
new home construction jumped in the first quarter, the unemployment rate is falling and new car
sales are up. Definitely, the economic aspect of the recession is looking much better. It is a good
sign when real estate agents are saying that it is a seller’s market. The employment outlook
improves
Review of the Literature
Miriam Caldwell (Article about.com guide) was one of the affected people by the
recession. She offered insight into her situation: “I was laid off in July 2011. Due to a clerical
error my unemployment was not approved. I was told I had missed the appeal process but could
not speak to anyone who had any authority to tell me why. The only program I qualify for is food
stamps. I rented out my home because I didn't want it repossessed. My son moved in with friends
and I live with my two dogs in my car that is certain to be a repo soon. I put in 70 applications or
resumes per week. The only jobs I have been able to find paid below minimum wage. I made
enough for gas to get to work and a profit of $25. a week... these business have since closed and I
am unemployed once again. I was under $50,000.00 in debt when all this started. I went back to
school to get a higher degree since it seems that employers are only interviewing graduates. That
may put me more in debt but at this point I have little options.”

According to the Bureau of Labor Statistics and US Department of Labor (2012), Florida
was among the 40 states and the District of Columbia where all six measures of
underutilization decreased over the year. Nine states had U-6 rates that decreased by more than
2.0 percentage points from 2011 to 2012, led by Alabama (-2.7 points), and Nevada and South
Carolina (each -2.4 points). Among these nine states, five were in the West and three in the
South. The U-6 rates rose in two states from 2011 to 2012. Delaware experienced the larger
increase, up 0.7 percentage point to 13.9 percent. In New York, the U-6 rate increased 0.6-
percentage point to 14.9 percent. The U-6 rate was unchanged in one state, Pennsylvania (13.9
percent).
Florida
Data
Series
B
ack
Dat
a
N
ov
2012
D
ec
2012
J
an
2013
F
eb
2013
M
ar
2013
A
pr
2013
Labor
Force Data
Civilia
n Labor Force
(1)
(
6)
9,404.
2
(
6)
9,413.
6
9
,423.9
9
,428.6
9
,411.9
(
P)
9,410.
6
Emplo
yment (1)
(
6)
8,648.
6
(
6)
8,668.
6
8
,683.4
8
,697.2
8
,704.6
(
P)
8,730.
2
Unemp
loyment (1)
(
6)
755.5
(
6)
745.0
7
40.5
7
31.4
7
07.3
(
P)
680.4
Unemployment Rate (2)
(
6)
8.
0
(
6)
7.
9
7
.9 7
.8
7
.5
(
P)
7.
http://www.bls.gov/lau/maps/aastrate.pdf Unemployment rate by State

The recession in Florida between 2008-2009 came by a big surprise for many Floridians.
The impact of the recession destroyed many existing business, and ruined many families’ lives.
The perception during the boom years, even before the crisis hit shows that the economy was as
stable as suggested by the economists. A phenomenon called “loose monetary policy” seeks to
stimulate production and employment through an increase in the availability of money and credit
in the marketplace. The phenomenon according to Long is due to reducing the discount rate or
reserve requirements provided by the banks with an incentive to loan money and make credit
available. Consequently, small businesses benefit from expanded credit opportunities, leading to
increased investment (Long, Demand media). Another important factor was that the impact of
the crisis on Floridians was somewhat diverse, and it reflected differences in initial
vulnerabilities of economies. The recovery phase was subjected to a number of risks such as
insuring that the recovery was creating more jobs, and challenging business growth in effort to
make up for the losses that the recession left behind.
The recession had a very negative impact for a majority of people who relied in the
accurate reports coming from the economics profession who were blamed for failing to
recognize the catastrophic effects of that recession. As a result of that, Galbraith (2009) offers a
robust critique of the economics profession and argues that both explicit and implicit intellectual
collusion made it difficult for the leading members of the profession to encourage a genuine
discourse based on alternative.
No one could say that the warning signs were not noticeable; most of us knew the large
deficits in the US, UK and other economics that were being financed by the excess savings of
emerging economies and oil exporters, loose monetary policy, the search for yield and lax
financial regulation. It was obvious that all these factors contributed to the collapse of the

economy. "Minority groups were hit much harder," said Bernardo Oseguera, author of the report
for FIU Research Institute on Social & Economic Policy, which feature unfinished condominium
on its cover (Heroux, 2012 Sun Sentinel article)
African Americans and Hispanics have borne the brunt of the recession, with higher
joblessness and a recovery that has been weak or non-existent, the report said. And while women
were less affected during the recession, men are getting more of the jobs in the recovery. African
Americans workers had a jobless rate of 17 percent in 2011, compared to 11.6 percent for
Hispanics and 7.8 percent for white workers.
"Not everyone is doing better," Oseguera said. Fewer opportunities to advance in education
and poverty are two factors in higher unemployment for Florida's blacks and Hispanics, he said.
According to the Bureau of Labor Statistics, the strong characteristics of a recession is
simply recognize a general slowdown in economic activity, a downturn in the business cycle, a
reduction in the amount of goods and services produced and sold. According to their statistics
report it showed during the recession in December 2007, the national unemployment rate was 5.0
percent, and it had been at or below that rate for the previous 30 months. At the end of the
recession, in June 2009, it was 9.5 percent. Many months after the recession, the unemployment
rate peaked at 10.0 percent (in October 2009). Before this, the most recent months with
unemployment rates over 10.0 percent were September 1982 through June 1983, during which
time the unemployment rate peaked at 10.8 percent.
Nevertheless, this research topic is conducive to interdisciplinary study by using the
Economics, and Psychology view. First of all, the Economics problems leading to the recession
began with a housing price bubble in many parts of the country and a coincident stock market

bubble. These problems evolved into the financial crisis. ...Recessions generally occur when
there is a widespread drop in spending an adverse demand shock. This may be triggered by
various events, such as a financial crisis which can cause bankruptcies for families, loss of
properties etc…The governments usually respond to recessions by adopting expansionary
macroeconomics policies such as increasing money supply, increasing government spending.
The economists have to use different methods and policies to better understanding of that
particular situation, and help to determine what the best decisions to change the recession are.
Second, for the Psychology views it revealed that the primary focus has been on its impact. It is
argued that the impact of unemployment and the ways it is coped with vary according to factors
such as people's perceptions of their situation. Therefore, there is a need for research into both
the impact and meaning of unemployment. This thesis set out to contribute to the existing
psychological literature by providing further evidence of the impact of unemployment and
complementing this evidence with an analysis of the meaning of unemployment. Financial
insecurity is a form of chronic stress that increases risk for psychological distress. The series of
events leading into a recession can be especially distressing for older adults who see their
savings accounts dwindling as they are planning for retirement. They will definitely help families
to cope with the consequences of the recession. The impact of unemployment in families can be
devastating causing divorce, bankruptcies, loss. It definitely changes people’s lives and affect
their mental health.
The Great Recession was severe for Floridians in many different ways. Many
people lost their jobs and homes during the great recession leaving a lot of families without
hopes. It took many years for Floridians to find a good job which enabled them to be able to pay
for their debts. Their credits were destroyed, and they were not able to purchase a home on their

own neither pay for their existing mortgage in an attempt to save their homes. The national
unemployment rate had been above 8% longer than at any time since the Great Depression.
During the housing boom, Florida’s unemployment rate fell below the nation’s, and accordingly
rose above it following the bust. Even though the unemployment rate is down somewhat from
the heights of 2009 and 2010, the employment to population ratio (for those 16 and over, right
scale) remains flat.
Interdisciplinary Analysis
One specific matter in the field of psychology that has been observed and examined
among the Floridians is that of their reaction and understanding of unemployment and the
impacts that it has on their personal living conditions. Work, before the great recession in
Florida, was considered to be a mere requirement to define one’s identity and status in life. For
this reason, many individuals in Florida seek higher positions hoping to define their individuality
according to their jobs or careers. However, at the onset of the great recession, perceptions about
job and what it implicates on a being has specifically changed. Relatively, the ‘picky’ attitude of
Floridians became more focused on having something to depend on and use to be able to survive
the different conditions of living and adjusted matters due to the occurrence of the financial crisis
(Gladstone, 2012). Work has become one of the most elusive yet the most important elements in
life that mattered so much to the people. Each individual wanted to grab any work, it did not
matter what position it was so long as it did pay as much as the people needed to be able to
survive another day.
Organizations on the other end took the advantage as they offer low level yet at least
reasonably paying positions to Floridians. The people responded eagerly, hoping to regain their

moral strength from being laid off from their old positions or simply from being unemployed as
it is. Being unemployed during the time meant devastation (Gladstone, 2012). The vision over
status quo has changed; people began minding the way they specifically manage the current
situations that they had to deal with to be able to make sure that there is still something to look
forward to in the future apart from being merely scared of what might happen next.
The article by Yuosf, about Cognitive Dissonance, a research study and associated
examples from Pakistan reflects that Cognitive dissonance is a very powerful motivator which
will often lead us to change one or other of the conflicting belief or action. Human being is a
social animal said by Aristotle has different conflicting shades in its personality, taught process,
conducting patterns and executing preferences. This theory tries to explore different experiments,
reasons, logics and conclusions in order to reduce conflicting conditions.
The impact of the recession on people is mainly measured in terms of unemployment,
according to the article (Sinclair, 2010). One of the effective ways to look the situation for the
recession is through “Expectancy Theory” which could be a good way to look at the influence of
the recession on employees’ motivation. The theory suggests that an individual's perceived view
of an outcome will determine the level of motivation. Victor Vroom, a professor of the Yale
University, suggests that prior belief of the relationship between people's work and their goal as
a simple correlation is incorrect. Vroom said, “The individual factors including skills,
knowledge, experience, personality, and abilities can all have an impact on an employee's
performance” (Nawrot 2013). However, Expectancy Theory also has limitations, especially in
terms of unaddressed crucial issues such as unconscious mechanisms, problems with multiplicity
of the three different categories within the theory, lack of accounting for behavior over time and

perhaps an over-rationality of the theory resulting in an over-simplification of motivation in a
complex climate.
A great example is the stock market. The more that stock investors believe that the stock
market will continue to rise, the more they are willing to invest in the stock market, and the more
it actually does rise. But the problem is that nothing can last forever, and people can only fool
themselves into thinking otherwise for so long. Eventually fear begins, and people start changing
the way they behave towards the economy. They stop investing as much, and take more
precautious towards how they are going to spend their money. Any changes will reflect
positively or negatively in the economy.
On the other end, when it comes to the condition of the economy, the people began to
recognize its unstable position. They began to realize the fact that investments, if not taken care
of properly or if not managed accordingly might cause them more losses than actually gaining
profits in the future. This directly affected the industry of real estate. People in Florida then
believed in real estate investments. However, when they saw what happened during the great
recession, trust in such type of investment began to diminish. Relatively, it could be understood
that more people believed that saving their money during the time to make sure they still have
something to use in the years to come would be better than spending them all on investment
defined possessions such as homes and lot ownership.
The technique applied on my research is the technique of transformation. By applying
the degree of rationality, the purpose is to transform assumptions that are not so different, and
place them into rational and irrational variable. They both would have opposite meanings. It
will then create a common ground among several theories, and at the same time it will extend

the scope of the theory for these cognates. For my research, it would be like finding the
common ground between these disciplines. For the economics the common ground would be
value and how people (or other entities) can apply value in their lives. It could be how the
government can help people who suffered through recession crisis by helping them collecting
unemployment. For the psychology such as self-reliance, concern for others, and harmony of
purpose.
Moreover, for this technique of Organization is important to identifying a commonality in
the meaning of different variables, and organize them. The intention is to bring a relationship
between the two cognates. The economists stress rational decisions depending on the market
situation. On the other side, the psychologists will identify what causes the recession had on
different individuals.
In order to provide a better understanding of these disciplines, it is necessary that one
understand the psychological meaning of employment status in employed and unemployed
groups; and to investigate whether interrelationships existed between employment status and
various psychological dimensions.
First and foremost, the state of Florida suffered one of the worst effects of the recession,
with double digit unemployment and other factors that led to a dramatic slowdown in the
population growth Florida has drawn from the rest of the country since World War II. The Great
Recession was severe for Floridians. The national unemployment rate has been above 8% longer
than at any time since the Great Depression. During the housing boom, Florida’s unemployment
rate fell below the nation’s, and accordingly rose above it following the bust. Even though the

unemployment rate is down somewhat from the heights of 2009 and 2010, the employment to
population ratio (for those 16 and over, right scale) remains still flat.
Second, the discipline in the Psychology field revealed that the primary focus has been on
its impact. It is argued that the impact of unemployment and the ways it is coped with vary
according to factors such as people's perceptions of their situation.
Finally, there is a need for research into both the impact and meaning of unemployment.
This thesis set out to contribute to the existing psychological literature by providing further
evidence of the impact of unemployment and complementing this evidence with an analysis of
the meaning of unemployment. Financial insecurity is a form of chronic stress that increases risk
for psychological distress. The series of events leading into a recession can be especially
distressing for older adults who see their savings accounts dwindling as they are planning for
retirement.
The economic problems leading to the recession began with a housing price bubble in many
parts of the country and a coincident stock market bubble. These problems evolved into the
financial crisis. ...Recessions generally occur when there is a widespread drop in spending an
adverse demand shock. This may be triggered by various events, such as a financial crisis which
can cause bankruptcies for families, loss of properties etc…The governments usually respond to
recessions by adopting expansionary macroeconomics policies such as increasing money supply,
and increasing government spending.
Conclusion

Overall, it could be understood that the great recession has imposed a sense of
uncertainty among Floridians. The way they reacted on the financial crunch that recently
happened around the globe placed them in a position that is most often than not hard to contend
with. The adjustments they considered involved a redefinition on how they saw specific aspects
of living which includes the way they analyze both the importance of employment against status
quo and the value of savings apart from investing. Relatively, this phenomenon affected other
states in America as well, nevertheless, Floridians tried the best they could to rise to the occasion
and gradually make improvements thus saving their economy at present.
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