Tracking the recovery: One in four households has suffered a layoff over the past year
Andrea Orr September 30, 2009

The official unemployment rate hovers near 10%, suggesting that one in 10 American workers is out of work. But that figure masks the extent to which unemployment has devastated American families. Almost one in four families say they have been hit by a job loss over the past year, a new survey finds, and 44% have suffered either the loss of a job or a reduction in wages or hours worked.

Those are some of the findings contained in a new survey, Tracking the Recovery: Voters’ Views on the Recession, Jobs, and the Deficit, which examines voters’ thoughts about the state of the economy and the government’s response to the recession. While economists are increasingly declaring the recession to be over, the situation on the ground is much different, where a large majority of those surveyed rate the economy as “not so good” or “poor” and say it still feels like the country is in recession.

The survey was conducted for the Economic Policy Institute by Hart Research Associates, which questioned 802 registered voters about their thoughts on the recession, the economic outlook, and the policies most likely to promote recovery. Asked to name the most important economic problem facing the country, 53% of those surveyed listed unemployment and lack of jobs. The widespread concern over jobs crossed party lines, with more than half of both the Democrats and the Republicans surveyed listing this as the top concern.

U.S. unemployment in August reached 9.7% and is already well into the double-digits in many states and for many large demographic groups, including men, African Americans and Hispanics. While layoffs have devastated many families, layoffs alone do not tell the story of this recession, which has also been marked by unusually long-term unemployment, wage stagnation, reduced hours, and widespread furloughs. In her recent analysis of unemployment data for August, EPI economist Heidi Shierholz noted that 5 million workers have been unemployed for at least six months. Moreover, the official unemployment data do not capture all those workers who want to work full time but have had to settle for part-time work, as well as those who want to work but have grown too discouraged to look for work. Currently one in six of all workers—about 16.8% of the U.S. workforce—are either unemployed or underemployed.

While most of the voters EPI surveyed—like most economists—see some decline in the severity of the unemployment situation a year from now, most also believe unemployment will remain a big problem. Some 62% said they expected unemployment would be a “very big problem” or a “fairly big problem” one year from now; another 28% forecast that it would be “somewhat of a problem.”

Their assumptions, while grim, are most likely accurate. Recent monthly unemployment reports show that while the pace of job loss has slowed significantly from earlier this year, the country is still losing jobs. The good news is that the 216,000 jobs lost during August, compares with more than 600,000 lost during some of the winter months earlier this year and more than 700,000 lost in January. However 6.9 million jobs have been lost during the recession, and when population growth over this time is factored in, it means that the country needs 9.4 million jobs just to return to pre-recession levels. Shierholz, who recently simulated a few different scenarios for the pace at which jobs would return, found that even under the best-case scenario, unemployment would remain high for years and would be still be above 5% five years from today.

In the face of this daunting challenge, the survey found strong support for stimulus spending made under the American Recovery and Reinvestment Act: 51% said the $787 billion Recovery Act was necessary. However, the overwhelming majority—81%—said the Obama administration has still not done enough to deal with unemployment.