Why We’re So Down in the Dumps About the Economy
Business + Economy

Why We’re So Down in the Dumps About the Economy

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Nearly five years after the recovery began, Americans in alarming numbers believe the Great Recession permanently damaged the economy and that many aspects of the lifestyle they once enjoyed – a good job, income security and more – may never again be theirs. 

Even more troubling, most Americans don’t believe the economy has actually improved – or will improve – despite nearly half a decade of job growth and declining unemployment rates since the recession officially ended in June 2009.

Related: Depressed and Worried, Americans Blame Obama and Congress 

These and other findings are from a new study released Thursday morning by the John J. Heldrich Center for Workforce Development at Rutgers University.

“The slow, uneven and painful recovery left Americans deeply pessimistic about the economy, their personal finances and prospects for the next generation,” Carl  Van Horn, the center’s director and a co-author of the study, said in a statement.

The Heldrich Center is a leading research think tank that has tracked the economy and the American job force since 1997 and researched the effects of the recession. The center’s goals include strengthening workforce education, placement and training programs. It’s also done cutting-edge research on the declining morale and mental health of those who have lost jobs or are just hanging on. 

Related: Fed Study: One-Fourth of Americans ‘Just Getting By’ Financially 

The new findings are similar to those of other recent polls and studies attempting to plumb the public’s psyche over a long and uneven economic recovery. A recent Wall Street Journal-NBC News poll found 71 percent of Americans believe the country is on the “wrong track,” while 7 in 10 blame the malaise on President Obama and Congress more than on structural problems with the recovery.   

Just months before a critical mid-term election, respondents to the Heldrich survey again expressed little or no confidence that President Obama or Congress can or will do anything to help improve the economy. 

Among the survey’s key findings:

  • Seventy percent of Americans are convinced the economy has undergone permanent changes for the worse since the recession, while just 1 in 6 believes job opportunities for the next generation will be better than for theirs. Five years ago, 4 in 10 respondents held that more positive view. Many people today “have little or no confidence that the federal government will make progress on the nation’s most important problems over the next year,” the study found. 

Related: More Dismal Poll Numbers for Obama and Congress 

  • About one-quarter of those interviewed reported a major decline in their quality of life because of the recession, while 42 percent say they have less money in the bank than when the recession began. Some 16 percent of the public said they were “devastated” because they experienced “a major, permanent change in the quality of their life.”
  • A mere 1 in 3 believes the economy has gotten better in the last year and only a quarter of Americans think it will improve next year. “Just 1 in 6 Americans believe job opportunities will be better for the next generation of workers, down from 4 in 10 five years ago,” according to the report.

The authors of the report found that the public “paints an extremely negative picture of American work” when asked to choose from a list of a dozen words or phrases. Only 14 percent checked off “happy at work” and just 18 percent believe they are being well paid. 

Two-thirds say American workers are “not secure in their jobs” and “highly stressed.” Just 1 in 5 believes the average American worker is well educated or innovative; and just 1 in 3 checked off “ambitious” or “highly skilled.”

Related: The Mental Anguish of the Long-term Unemployed 

The authors said they were most surprised by how many respondents denigrated the average American worker. Just 1 in 3 checked off that the average American worker is “better than workers in other countries,” according to the report.

The widespread economic despair is born of fundamental inconsistencies in the long economic recovery, according to the study. Over the past 4 years, for example, nearly 10 million private sector jobs were added and the U.S. has enjoyed 53 consecutive months of economic growth – the longest period of consistent job growth on record. The unemployment rate fell from 8.2 percent in March 2013 to just 6.2 percent in July. 

But that growth “has been insufficient to produce enough full-time jobs for everyone who wants one,” the study notes. As of last month, nearly 9.7 million work­ers were unemployed, and many jobs that vanished during the recession paid good wages, while most growth during the recovery has been in low-wage jobs.

“Wages have increased modestly for many, but have not increased suf­ficiently to keep up with inflation,” the report stated. “Labor force participation rates are at the lowest levels in three decades. Long-term unemployment rates remain at unprecedented high levels, above pre-recession levels in over 40 states.”

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