I am terrified of heights.
I don’t like steep staircases. I do not downhill ski—the lifts prevent such activity. I refuse to sit in the upper decks at auditoriums.
I am determined to conquer this problem.
I challenged myself in a grandiose way last week…
My mission: to walk the Capilano Suspension Bridge in Vancouver, B.C.
The bridge is 450 feet long and hangs 230 feet above the Capilano River. It is a scenic stretch. Bridge walkers are surrounded by natural beauty and find themselves high above the evergreen treetops, peering at the waters far below.
The bridge is not only sky-high, it is very narrow and sways like a hammock. It bounces with every step, creating a ripple along the bridge for other travelers.
The Great Recession, too, created ripples as consumers walked its treacherous path.
Technically, the Great Recession is over, but we still feel the swaying. Research findings this week reveal lingering impact of our economic travails, and show that those from every walk of life have been impacted.
Are your members still on shaky ground?
‘I’m All Shook Up’
“U.S. Economic Recovery Looks Distant as Growth Stalls,” reports The New York Times. Although five years have passed since the recession’s declared end in 2009, economic growth remains slow at 2% percent, “well below its historical average."
“Household incomes continue to stagnate, and millions of Americans still can’t find jobs. And a growing number of experts see evidence that the economy will never rebound completely.”
Even economic growth following the Great Depression eventually resumed its “average pace of more than 3% a year.”
Some economists say slow growth is the new normal and will persist as fewer Americans enter the labor force. Another opinion is that slow growth will remain until government increases spending on roads, bridges, and new technologies.
“A soft economy casts a substantial shadow forward onto the economy’s future output and potential,” notes Lawrence H. Summers, President Obama’s former chief economic advisor.
The recession slashed American families’ wealth by 28.5%, “double the magnitude of any previous recession since the 1980s,” according to an Urban Institute report, “Impact of the Great Recession and Beyond.”
The adequacy of policy is called into question in this report, “ranging from safety net to tax regulation.”
Further, “The young and families of color experienced the largest percentage declines in wealth as a result of the Great Recession, driven in large part from declines in housing.”
This group did not benefit as much from the recovery of stock markets, although their misfortune began prior to the crisis as they “were not on good wealth-building paths relative to earlier cohorts or to whites before the Great Recession.”
“Workers are Still Feeling the Effects of the Great Recession,” says USA Today. “Only 14% say they have fully recovered from the Great Recession; 44% say they are somewhat recovered and 58% of workers say they are financially recovering now,” according to Transamerica survey results.
Two-percent of those surveyed believe the recession has concluded with a full recovery, while 65% say it has ended, although they have mixed opinions about the state of recovery. Thirty-five percent believe it is not yet over.
“Although economists have stated that the Great Recession ended in 2009, most American workers are still feeling its effects.”
Meanwhile, “Private Bankers Say Wealthy are Holding Onto Cash,” according to Reuters. The world’s wealthiest individuals prefer to hold onto “stockpiles of zero-yielding cash despite a surge in financial markets.”
Why? “The cozy and safe world we thought to live in before the financial crisis… has proven to be not that cozy and safe…”
It is estimated that up to 40% of funds of this group remains “parked in deposits.”
Millennials, too, are reluctant to invest, says U.S. News and World Report. This group exhibits conservative money habits partly as a result of witnessing “one of the most turbulent market cycles in U.S. history.”
Their careers were impacted early on, and their focus often has been on paying the bills—including student loan debt—as opposed to investing.
A psychological factor exists, too, as “emotionally driven” response to the stock market results in a perception that stocks and investments are “a risk not worth taking.”
For this group, then, reasons to avoid investing are twofold: burdensome debt and lack of confidence in the market—consequences of the economic downturn.
‘Shake, Rattle and Roll’
States have fared differently in the recent economic climate, with variances in the impact on residents.
The recession affected tax revenues, according to the IZA Journal of Labor Policy. “The Great Recession had the most severe impact on state tax revenues of any downturn since the Great Depression… States with more progressive tax structures are more vulnerable to economic downturns, and that progressivity and income volatility may interact to amplify the recession’s final impact.”
Variances in “income concentration and capital gains shares in the top 5% of taxpayers” are most important, and “though the interaction between income volatility and high tax burdens at the top did produce large decreases in tax revenue in a few states, progressivity accounted for little of the interstate variation in revenue volatility.”
Finally, the recession has had an impact on colleges, says the Lumina Foundation. “The biggest reason for surging tuition in the last few years was not increased spending on the part of institutions but rather the steep decline in state and local government support in the wake of the Great Recession.”
Financial aid programs received a boost in some states, while others cut such programs.
“On a per-student basis, state aid declined in 35 of 50 states during the recession, even as tuition was going sharply up and family incomes were falling.”
This interesting report offers perspective on the correlations between college costs, prices, and the recession with particular regard to impact by state.
I successfully crossed the Capilano Bridge—my self-imposed challenge a helpful exercise in confronting my acrophobia.
Not only did I survive confronting the altitude, but also the shaky surface between me and the awesome depths.
How can you help members find financial highs while confronting recession ripples underfoot?