Experiences during the recession are closely associated with perceptions of the recession. Nearly half (45%) of those who Lost Ground rate current economic conditions as “poor,” compared with 29% of those who Held their Own. At the other extreme, those who Held their Own are nearly twice as likely as those who Lost Ground to say the economy is “excellent” or “good” (19% vs. 11%).
It is no surprise that these judgments appear to be rooted in how individuals and their families have fared economically over the past 2½ years. When asked to compare their household financial situation now with what it was before the recession, those who Lost Ground were more than twice as likely than those who Held their Own to say their families are worse off now (63% vs. 28%).
And when asked to judge their current financial condition, the gap is equally wide. Halfway into the third year of bad economic times, fully half (50%) of those who Held their Own report they “live comfortably,” compared with only 14% of those who Lost Ground. At the same time, those who Lost Ground were more than three times as likely as those who Held their Own to say they either just meet their expenses or fall short each month (54% vs. 17%).
The economic perceptions gap narrows — but only a bit — when respondents are asked if the economy is currently in recession. A clear majority (60%) of those who Lost Ground says it is, compared with 45% of those who Held their Own. A plurality (48%) of those who fared relatively well say the economy is “starting to come out of a recession,” a judgment shared by 35% of those who Lost Ground. Only a handful of both groups say the recession is over (4% for those who Held their Own, 3% for those who Lost Ground).
Assets: Shelter from the Storm?
By many key measures, the Great Recession was longer, deeper and more intense than any economic downturn since World War II. But in at least one way, this recession is no different than past economic slowdowns: the more wealth a person had going in, the more protected that person was from the worst of hard times.
Studies repeatedly show that wealth in the form of homeownership, savings, mutual fund holdings, and stocks, bonds and other investments is strongly correlated with income and education, factors that all help to insulate individuals from hard times. While job loss during an economic turndown means no paycheck,, having money in the bank, a house or other property or investment holdings provides a cushion to help people make it through rough patches.
While the survey did not directly test this relationship, it does provide some corroborating evidence that what one had before the recession is directly associated with how an individual fared over the past 2½ years. Fully 75% of those who Held their Own were homeowners, compared with 53% of those who Lost Ground. The gap widens when other forms of wealth are considered. For example, those who Held their Own were more than twice as likely to own stocks, bonds or mutual funds than those who Lost Ground (53% vs. 25%).
Even when other factors such as family income, age, education and race are taken into account, having a savings account, owning a home, or owning stock or other forms of investment holdings are powerful predictors of whether someone Held their Own or Lost Ground during the recession.5