Posts Tagged "economic downturn"
January 17, 2023
Great Depression Holds Lesson for Our Time
The Great Depression, sparked by a devastating collapse in stocks followed by 25 percent unemployment, remains the deepest recession in U.S. history.
A new study laying out the long-term negative impacts to Americans born during that time might be consequential for today’s youngest citizens – teenagers born during the Great Recession of 2008 and 2009 and toddlers born in the midst of the steep COVID downturn in 2020.
The researchers found that the stresses and financial strains on parents from the Depression’s extraordinarily high unemployment over a protracted period of time did long-term damage to the health and careers of their children that persisted late into their lives. In a separate but related paper, they also found that people exposed to the Depression in utero experienced an acceleration in the aging process after age 75.
“The shock of the Great Depression was massive and everyone, no matter what group they belonged to, was to some extent impacted,” concluded the researchers, Valentina Duque and Lauren Schmitz.
For a whole host of reasons, a parent’s loss of income and joblessness have a huge impact on their children’s development and socioeconomic status, which in turn determine how they will do when they grow up. Prenatal stress on mothers, for example, has been linked to lower earnings for their offspring as adults. In utero stress also contributes to cognitive and behavioral problems late in life.
A father’s financial distress can harm the long-term health of children if the family can’t afford to buy nutritious groceries and quality healthcare or isn’t able to relocate to another part of the country with better job prospects.
To assess the Depression’s impact on health and careers, this study used a survey of older Americans. The researchers identified adults born in the 1930s to analyze how they fared late in their careers based on how severe the Depression was in the state where they were born or lived as young children.
The analysis, using IRS tax records, indicated that the offspring of the Depression’s parents living in states with larger declines in wages earned less throughout their careers – the impact in utero was larger than for the workers exposed to the Depression as young children.
The Depression created other deficiencies too: by the time the people born in more depressed states reached their 50s and early 60s, they were less productive and less attached to the labor force than their counterparts who grew up in states with stronger economies during that difficult time. They also had poorer health, were more often disabled, and had higher mortality due to health problems like diabetes and cardiovascular disease.Learn More
November 18, 2021
The Economy, Minimum Wage, and Disability
The federal minimum wage is $7.25 an hour and hasn’t budged since 2009. But many states and some municipalities have raised their minimum wages. Today, more than half of the state minimums exceed the federal minimum.
Now a new trend has emerged: 19 states have enacted or approved automatic yearly increases in their minimum wages to protect their residents from inflation. These adjustments just went into effect this year in Arizona, Colorado, Maine, and Washington D.C.
How might higher minimum wages affect applications for disability insurance? On the one hand, the higher pay could prevent some people with mild disabilities from resorting to the fallback option: applying for disability benefits. But if small employers lay people off to cut costs or feel they can’t afford to hire workers at the new higher minimum wage, applications could go up. Facing fewer job opportunities, more low-wage workers might apply for benefits from a program that currently covers some 16 million Americans.
A new study finds that a rising minimum wage does, indeed, increase disability applications to the U.S. Social Security Administration. But the researchers stress that this impact is minimal compared with the increase driven by an economic downturn that throws more people out of work.
In their analysis of nearly 3,000 counties from 2000 through 2015, a one-dollar increase in the minimum wage added some 80,000 more applications to the disability program and its companion, the Supplemental Security Income program for the poor, elderly, and adults with disabilities. That represents a 2 percent increase.
Contrast that to the impact of a rising unemployment rate, which was about three times larger. …Learn More
December 8, 2020
Video: Young Adults Share Career Setbacks
More than half of young adults are now living with their parents – the highest level in more than a century, according to the Pew Research Center.
This alarming statistic, first featured in a September blog, is the result of a long-term trend that has accelerated during the economic slowdown caused by COVID-19.
In this PBS NewsHour video by Catherine Rampell, young adults 24 to 39 years old who are taking refuge in their parents’ homes talked about their stalled social lives and disrupted careers – their disappointments always tinged with a sense of humor.
They include Marcellus Adams, who was laid off from two jobs, as an auto mechanic and emergency room staffer, and, at 29, has never really lived on his own. Eric Rivera moved from the height of chic – an apartment in the Williamsburg section of Brooklyn – to his parents’ home in a suburb of Trenton, New Jersey. And comedienne Nikki Glaser’s white-hot career suddenly cooled when her shows were canceled due to the pandemic.
They and millions of Millenials and members of Generation Z may pay a price for their setbacks in the form of lower earnings and unplanned-for career trajectories.
But a vaccine is coming, they are young, and they will persist.
Read our blog posts in our ongoing coverage of COVID-19. …Learn More