Credit: Burning up billions in retirement contributions image via Shutterstock
Despite signs of an economic recovery, the Great Recession's scope and impact was so widespread and corrosive that it has left millions of Americans permanently damaged financially, a new study finds.
The research from the John J. Heldrich Center for Workforce Development at Rutgers University found that five years after the country's economic downturn started, 60 percent of U.S. residents think the nation's economy has undergone a permanent change.
More than half of those surveyed think it will take at least six years for the economy to fully recover from the Great Recession, with 29 percent believing it will never hit the levels it reached before the recession.
"After suffering through the worst economic disaster American workers have ever experienced, they are deeply pessimistic," said Rutgers professor Carl Van Horn. "Five years of economic misery have profoundly diminished Americans’ confidence in the economy and their outlook for the next generation."
The study revealed just how impactful the economic recession was on American families. Nearly three-quarters of those surveyed either lost a job themselves, or had a member of their household, close relative or friend lose a job at some point in the past four years.
Among those who did find themselves out of work, more than half cut back on medical treatments or doctor visits, while 40 percent were forced to borrow money from family or friends, the research found. In addition, more than 20 percent have been treated professionally for stress or depression.
Overall, more than half of those surveyed said they have less money in savings today than before the recession began, including 38 percent who say they have a lot less in savings.
One of the study's co-authors, professor Cliff Zukin, said it is younger Americans, having come out of high school and college into an overcrowded job market, who may be affected the greatest.
"There is some evidence we may be seeing the beginning of a new generation in American society — no longer millennials, but 'recessionals,'" Zukin said. "Whereas older workers hit by the recession might recover their past consumer habits, this period of the recession might leave a lasting imprint on young people in their buying habits and need for security as they make their way through life."
Despite the study finding that 40 percent of Americans have little faith in the government to turn the economy around, they are counting on Congress and the president to take actions that would lower unemployment. More than 80 percent of those surveyed want the government to give tax credits to employers that hire new workers, while 60 percent think the government should fund direct job creation programs.
The study, also co-authored by graduate research assistant Mark Szeltner, was based on surveys of 1,090 employed and unemployed Americans.