February 12, 2009

As Jobs Crisis Spreads, Worries Climb the Economic Ladder

Section 3: More Than Just the Unemployed

While unemployment levels are a critical measure of the nation’s economic standing, the impact of job problems goes far beyond the minority who are currently out of work. Of all adults interviewed in the survey, 12% say they are currently not working and seeking employment; another 28% are not working but not looking, including retired seniors. Not surprisingly, unemployed Americans report substantial financial difficulties, spending cutbacks, and grim economic assessments.1

But there is an even larger share of Americans who, though currently employed, report experiencing job problems over the past year. These include people who have had others in their household out of work, who have been laid off and found another job, who have taken a cut in pay or hours, and who are working part time but would prefer to be full time. All together, 28% of Americans are currently working but have experienced one or more of these job- or income-related problems. Their assessment of their financial situations is in many ways as dire as those who are out of work.

For example, 40% of unemployed people say they have had trouble paying for medical care for themselves or a family member over the past year. The figure is nearly as high (36%) for those who are employed but have faced one or more job problems. A third of unemployed Americans have had problems with collection or credit agencies, as have 30% of those with job problems. And 25% of the unemployed have had loan or credit card applications denied, as have 27% of workers who have faced problems.

Those who are employed but have had job problems are also at least as likely as the currently unemployed to have made spending cutbacks over the past year. This includes delaying or cancelling vacations, car and other major household purchases, and eating out at restaurants less often.

Overall, nearly half of the Americans who are currently employed report having faced job problems over the past year, and the contrast between those who have and have not faced these kinds of problems is stark. Those who have faced problems are roughly five times more likely to have had trouble with rent or mortgage payments (32% vs. 6% of those who are employed and have not had job problems), about four times more likely to have had problems with collection agencies (30% vs. 7%), and more than three times more likely to have had trouble paying for medical care (36% vs. 10%). Workers who have faced job problems also report having had to cut back on spending far more broadly than other workers.

Perhaps not surprisingly, the job situation is the dominant economic concern for both the unemployed and workers who have faced job problems. About seven-in-ten (71%) unemployed people say the job situation worries them more than rising prices, problems in the financial markets or declining real estate values, and 59% of employed people who have faced job problems in the past year say the same. Among employed people who haven’t faced tangible problems, nearly as many cite the financial markets as their top worry (31%) as cite the job market (34%).

And while the vast majority of Americans – regardless of their employment status – say that jobs today are difficult to find, that sentiment is most universal among those who have tangible job problems. Fully 91% of the unemployed and 86% of employed people who have faced job problems say that employment is difficult to find in their area, compared with 76% of other employed people.

But the outlook for people facing job problems is generally positive. About three-quarters (76%) of the people who are currently unemployed are optimistic that their personal financial situation will get better over the coming year, as are 59% of those who are employed but have faced tangible job problems.

  1. While many of these measures of employment status parrallel definitions used by the Bureau of Labor Statistics and other government agencies, results do not align due to differences in survey measurement.