I really like this David Leonhardt column in the Times on who and where the recession is impacting most.
It’s perhaps the best concise explanation I’ve seen on what’s going on in the real economy—beyond the GDP numbers and consumer-confidence reports. And the accompanying chart is excellent as well.
Leonhardt notes that so far this recession has hurt those on the lower end of the pay scale the most:
Unlike the last two recessions — earlier this decade and in the early 1990s — this one is causing much more job loss among the less educated than among college graduates. Those earlier recessions introduced the country to the concept of mass white-collar layoffs. The brunt of the layoffs in this recession is falling on construction workers, hotel workers, retail workers and others without a four-year degree.
The Great Recession of 2008 (and beyond) is hurting men more than women. It is hurting homeowners and investors more than renters or retirees who rely on Social Security checks. It is hurting Latinos more than any other ethnic group. A year ago, a greater share of Latinos held jobs than whites. Today, the two have switched places.
But Leonhardt makes a good case that this economic collapse, unlike most recessions, will end up hurting the rich more— as a proportion of income lost:
Yet I still think the Great Recession will eventually end up compressing the rungs on the nation’s economic ladder. Why? For the same three fundamental reasons that the Great Depression did.
The first is the stock market crash. Clearly, it has hurt wealthy and upper middle-class families, who own the bulk of stock, more than others. In addition, thousands of high-paying Wall Street jobs — jobs that have helped the share of income flowing to the top 1 percent of earners soar in recent decades — will disappear…
The second reason is government policy. The Obama administration plans to raise taxes on the affluent, cut them for everyone else (so long as the government can afford it, that is) and take other steps to reduce inequality. Franklin D. Roosevelt did something similar and it had a huge effect.
Leonhardt also predicts that the appeal of education will increase as jobs disappear, just as they did during the Depression:
In the manufacturing-heavy mid-Atlantic states, the high school graduation rate was just above 20 percent in the late 1920s. By 1940, it was almost 60 percent. These graduates then became the skilled workers and teachers who helped build the great post-World War II American economy.
Nothing would benefit tomorrow’s economy more than a similar surge. And there is some evidence that it’s starting to happen. In El Centro, enrollment at Imperial Valley Community College jumped 11 percent this semester. Ed Gould, the college president, said he expected applications to keep rising next year.
And make sure to check out the great accompanying chart, which shades all U.S. counties by their unemployment rates. Scrolling over them lets you see how much unemployment has increased in the last year.