For the public, the continuing financial crisis has been overtaken by a jobs crisis. The proportion of Americans citing jobs or unemployment as the nation’s most important economic problem has more than quadrupled – from 10% to 42% – since early October and job worries now far surpass concerns over the financial crisis.
People’s perceptions of the availability of jobs in their areas have worsened as the unemployment rate has increased. Fully 80% say that jobs are difficult to find in their local communities – up seven points since December and 16 points since early October. Overall views of the national economy, already quite negative at the end of last year, have declined further; 30% say the country is in a depression, up from 20% as recently as December.
As has been the case since the financial crisis began, a sizable minority of Americans (40%) say they expect economic conditions to be better a year from now. But the proportion expressing that optimistic view has declined by six points since early October, while the percentage saying they expect things to be worse or the same a year from now has increased from 46% to 56%.
The latest national survey by the Pew Research Center for the People & the Press, conducted Feb. 4-8 among 1,303 adults reached on cell phones and landlines, finds that an increasing proportion of workers expect to face some form of job or benefit cutbacks in the year ahead. More than three-quarters (77%) of working adults say it is not likely they will actually be laid off in the next year, but 21% say a layoff is very or somewhat likely, up from 15% in January 2008. The percentage saying it is at least somewhat likely they may be asked to take pay cut has nearly doubled since the beginning of last year – from 13% to 25%.
The share of workers, either full- or part-time, who say any one of the following things is likely to happen over the next year – a layoff, a reduction in pay, a reduction or elimination of health benefits, or their employer going out of business or moving – has jumped from 35% in January 2008 to 44% currently.
Notably, much of the increase has come among well educated, high-income workers, who are now about as likely as less educated, lower-income workers to predict job problems in the coming year. More than four-in-ten college graduates (46%) see one or more job difficulties as at least somewhat likely (layoff, pay or benefits reduction, or their employer going out of business or moving); in January 2008, just 28% of college graduates said that one or more of those problems was likely.
Workers with family incomes of at least $75,000 also are much more likely to see possible job difficulties in the year ahead than in January 2008 (43% now vs. 27% then). As a consequence, the wide income differences last year in predictions of job losses or compensation cutbacks have disappeared.
The survey finds that as the financial crisis has deepened, affluent Americans, in particular, have grown increasingly skeptical that the economy will come back in the coming year. Only about a third (34%) of those with family incomes of $100,000 a year or more say they expect national economic conditions to be better a year from now. That is down 22 points from 56% in early October, the largest decline in any income category. In the last two months alone, the proportion of affluent people predicting an improvement in the national economy has fallen by 12 points (from 46% to 34%).
Personal financial optimism also has fallen sharply among those with family incomes of at least $100,000. Currently, 44% of those in this income category say they expect their personal finances will improve a lot or some over the next year, down from 59% in early October. Personal financial optimism also is down 11 points among those making between $75,000 and $100,000, and 12 points among those making $50,000 to $75,000. By contrast, people with lower incomes remain about as optimistic as they were in early October.
As was the case in December, substantial proportions of Americans say they are delaying or canceling planned spending on vacations, automobile and home purchases, and are eating out less often. Overall, spending cutbacks continue to be driven by worry that their finances will get worse, rather than an actual deterioration in people’s financial situation. As in December, people with higher incomes say their decisions to delay or cancel spending are mostly because of concern about the future; those with lower incomes are more likely to say their situation has already gotten worse, making cutbacks necessary.
The survey finds that as many as 40% of Americans have been affected by one or more job problems over the past year, when unemployment, underemployment, layoffs, reductions in pay or hours and job losses by other household members are looked at collectively. In this regard, job problems are affecting the financial position of a much broader swath of Americans than just those who are currently unemployed. People who are employed but have faced underemployment, job losses or income cutbacks are just as likely as those who are currently unemployed to have trimmed spending or to have had trouble paying bills.