The Wall Street Journal
By: Miriam Jordan
June 30, 2010
Study Measures Impact Beyond the Jobless Rate as Pay Cuts and Furloughs Take Toll; Ms. Lara Nixes a Martial-Arts Class
The nation's 9.7% unemployment rate tells only part of the recession's story, according to a new study that found more than half of adults in the U.S. labor force have suffered a spell of unemployment, a pay cut or reduction in work hours.
Middle-age workers--50 to 64 years old--are most likely to have taken a hit in the last 30 months of the downturn, a group normally at the peak of its earning potential, according to the report being released Wednesday by the nonpartisan Pew Research Center. The survey is based on telephone interviews May 11-31 with 2,967 adults nationally.
Out of the 13 recessions the U.S. has endured since the Great Depression of 1929-33, "none has presented a more punishing combination of length, breadth and depth than this one," write the report's authors. Unemployment data "don't fully convey the scope of the employment crisis that has unfolded during the recession."
Those without jobs are enduring the longest spells of unemployment recorded in modern history. The typical unemployed worker today has been out of work for nearly six months, almost double the previous post-World War II peak--12.3 weeks in 1982-83.
Long-term unemployment is associated with severe breaks in career paths and erosion in income, health and other aspects of well-being.
Once upper-middle-class Southern California residents, Louise and Alfred Ruiz are now "just trying to hold on to being middle class," said Ms. Valenciana-Ruiz.
In October 2008, she lost her job earning $100,000 as regional director of an education nonprofit. Since then, the former school principal has interviewed for eight jobs and filled out online applications for countless others, including at supermarkets.
"I have worked my whole life and still want to work," said the 56-year-old, whose unemployment benefits and severance package recently ran out. Her husband, a master carpenter, hasn't had steady work for months.
"I never thought that three decades into our careers we would be seeing everything slip away," she said. "I don't even have health coverage anymore."
But not even those who have kept their jobs have avoided hard times. Nearly three in 10 working adults say they have had their hours reduced. Almost a quarter suffered a pay cut, while 12% were forced to take unpaid leave and 11% had to switch to part-time from full-time work.
Among workers 50 to 64 years old, 27% reported that their salaries were reduced, compared with 22% of workers 30 to 49 and 20% of those 65 or older. Among those 50 to 61 years of age, 60% predicted they would delay retirement because of the downturn.
More than a quarter, or 26%, of those who are currently working had at least one stint of unemployment in the past 30 months.
And a quarter of those who are working again say they had to accept part-time work after losing a full-time job.
While nearly all Americans have suffered, blacks and Hispanics have borne a disproportionate share of both job losses and housing foreclosures. Men have lost many more jobs than women. And those with a high school degree or less have been more affected than those with higher education.
The recession has ushered in a culture of frugality: 57% of those surveyed have postponed or canceled a vacation, and seven out of 10 are buying less expensive brands. Nearly half have loaned money to someone in need.
Teresa Lara, 34, has lost $500 a month, or 8%, of her salary, since the University of California instituted a yearlong furlough last fall that cuts 18 days of her pay over 12 months.
To save money on gas and parking, she now rides the bus to the Los Angeles campus, where she works in an external relations department. She has nixed her martial-arts class, which she deems to be "a luxury."
Faint signs of a recovery aren't raising expectations. The university furlough is expected to be lifted in the fall. Still, she said, "I'm limiting my lifestyle. This recession has created nervousness that lasts."