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More Than Just Unemployment: Effects of Great Recession Stretch Wide and Deep

By Carter Dougherty

Updated on: June 30, 2010 / 7:10 PM EDT / MoneyWatch

If the simple jobless rate (9.7 percent) leaves you wondering what differentiates this recession from others, take a look at a new unemployment study by the Pew Research Center. It goes a long way toward explaining why we should call this the Great Recession, and why it's past time for the government to do more to end it.

If any one aspect of the study stands out, it is the sheer breadth of what has happened to the U.S. labor force since it entered a recession in December 2007. Actually losing one's job, it turns out is only the beginning:

[M]ore than half of the adults in U.S. labor force (55%) have experienced some work-related hardship -- be it a spell of unemployment, a cut in pay, a reduction in hours or an involuntary move to part-time work.... About a quarter (24%) of all adults -- and 43% of all currently unemployed adults -- say the recession will have a big impact on their ability to achieve their long-term career goals. Also, workers who lost a job during this recession but have since found a new one (26% of currently employed adults) are less likely than other workers to say they are satisfied with their job and more likely to say they are overqualified.

For the purpose of today's decision-making, two things stand out here:

For those who are skeptical that Congress should extend unemployment benefits, think again. The Pew study underscores how the social safety net may be all that some people have, including people who felt they had a nest egg before the recession:

Wealth can be a useful buffer against the financial losses inflicted by unemployment. But this buffer itself has come under direct assault during the Great Recession. In 2008, the first year of the recession, mean household wealth fell by more than in any year since WWII. The reason is the confluence of a stock market crash and falling home prices that left few households unscathed.

For those who want to call the recession over, think again. Truth is, since the NBER uses a mix of factors to make its decision, nothing is really standing in the way of that call: GDP is rising and real incomes are edging upwards.

Of course, the Pew study found that most Americans (54 percent) say the U.S. economy is still in a recession, while another 41 percent say it is beginning to come out of the recession. A scant 3 percent say the recession is over. Combine that with the overall unemployment rate, the employment experience of the last two years and the long-term unemployment problem, and you get a prima facie case for changing the criteria by which the NBER makes its decision.

Oh yeah - the Federal Reserve ought to act more forcefully, too.

If not during the Great Recession, then when?

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