We’ve seen several waves of hardship for working families in the past eight months in many parts of the U.S.: mortgage foreclosures, job losses, reduction of hours of work, and pressure by employers on health benefits. And state governments around the country are under huge fiscal pressure, leading them to attempt to cut support for social programs and important social services. And many of those governments are themselves laying off state workers. So there is already an unprecedented level of economic and personal distress in the country.
But no one seems to think that we’ve seen the worst this recession has to offer. So what’s next?
One part of the story seems pretty clear. There will be more layoffs, more plant closures, and more business bankruptcies in the coming six months. So more families will suffer the pain and dislocation of job loss. The national unemployment rate is officially estimated at 8.5%, and economists expect it to rise above 10%. This means another two million job losses in the coming year or so. And each unemployed person affects several around him or her — dependent children, spouses, college-age children, even aging parents. That amounts to several million more people about to be affected. (Here’s a link to the Bureau of Labor Statistics.)
It also seems likely that many more people will lose their homes through foreclosure. (Here’s a recent map of mortgage delinquency rates based on data compiled by the New York Federal Reserve Bank.)
It would take more of an expert than me to try to guess what surprises await us in the financial sector — how many more failed banks, how long the credit drought will continue, how much resistance distressed home mortgage holders will meet in efforts to renegotiate their loans and try to keep their homes. But it doesn’t seem likely that banking and finance have seen the worst yet.
We can pretty well predict that services and support for urban poor people will diminish further, as state budgets contract along with the economy. And public health experts can probably estimate the effects that contraction will have, on the health and nutrition status of poor communities. And what happens to whole communities when unemployment benefits begin to run out? How will food pantries and private services cope with increasing urgent need?
And what about worker militancy? Isn’t it somewhat surprising that there hasn’t been more of an organized reaction in the United States to all these shocks by the ordinary people who are experiencing them? Is it possible that this passivity and acceptance will begin to change as the months of hardship wear on into years of reduced quality of life?
The photos above are from the 1930s, the period of the Great Depression. The point here isn’t that we’re approaching a similar time. It is simply that economic hardship is real, and it forces new kinds of social action and private strategies of self-preservation.
I suppose the hope everyone shares is that the economy will reignite. Demand will begin to recover; businesses will start to rehire workers; new investments will be made that result in productive innovations. And public revenues will begin to recover as well, as family incomes, business profits, and property values start to recover. So we’ll be able to pay for the social services we want and simple fairness demands.
Somehow, though, that recovery seems a long way off.