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Reflecting On A Legacy Of Recessions: Job Losses

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Reflecting On A Legacy Of Recessions: Job Losses

Reflecting On A Legacy Of Recessions: Job Losses

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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By many measures, the human toll of this recession has been great. More people are jobless for longer periods than at any time since the late 1940s. In the past year, almost 3.4 million homes went into foreclosure. And trillions of dollars in stock market wealth vanished. But most measures of the recession are dwarfed by what happened during the Great Depression, as NPR's Frank Langfitt explains.

FRANK LANGFITT: The financial system almost collapsed last September. Since then, nearly six million jobs have disappeared. Mark Sharps was one of them. Sharps cut granite for kitchen counters in Maryland. The plunge in the housing market ended that.

Mr. MARK SHARPS: They just came to us after our shift was over and said that this shift has been eliminated and the company no more exists.

LANGFITT: Sharps has been looking for work since last spring. But today, six unemployed people compete for each job in this country.

Mr. SHARPS: I've applied at school board, custodial work, landscaping companies, McDonald's…

LANGFITT: Sharps has survived by cutting grass, fixing cars and spending less. He has a three-year-old daughter named Danielle.

Mr. SHARPS: There's been days I went without eating, because I want to make sure she eats.

LANGFITT: Like many out of work, he tries to keep his spirits up. Danielle helps.

Mr. SHARPS: I mean, she even come to me and pat me on the back and say, daddy, it'll be okay, daddy, it'll be okay. Then she'll tell me, lay down, lay your head down. She'll lay my head on her lap. Take a nap, daddy. It'll be okay.

Professor DAVID KENNEDY (American History, Stanford University): My father was unemployed for seven years.

LANGFITT: This is David Kennedy, he is an American history professor at Stanford and he is talking about his father's experience during the Great Depression. Kennedy says as painful as unemployment is today, it doesn't approach what it was like back then. In 1930, Kennedy's parents, Bert and Mary lived in a mining camp in Washington state.

Prof. KENNEDY: They went away on their honeymoon and came back approximately a month later and discovered the company he'd been working for, the mining company had gone bankrupt.

LANGFITT: The couple spent the next seven years scratching out a living in a ghost town.

Prof. KENNEDY: They lived like hermits in this mountain fastness where they were snowbound for seven or eight months of the year in the winter. I know he did a little trapping and probably sold the furs in Seattle or Spokane.

LANGFITT: During the Depression, the unemployment rate peaked at 25 percent. Right now, the rate is just 9.7 percent. And today's unemployed have far more resources than Kennedy's parents did.

Prof. KENNEDY: There was virtually no such thing as unemployment insurance. That meant if you were unemployed, you were on your own hook with absolutely no safety net underneath you whatsoever.

LANGFITT: From its peak in October of 2007 to its trough last March, the stock market lost more than half its value. The Dow has since rebounded. But Kennedy says the market's plunge in the 1930s was deeper.

Prof. KENNEDY: By the time Franklin Roosevelt comes to office in early 1933, the stock market had lost 90 percent of its valuation, which is virtually a total evaporation of all the assets and wealth stored in stock values in the country.

LANGFITT: One area where pain today is at least comparable to the Great Depression is foreclosures. In fact, more people are vulnerable to foreclosure now because far more people own homes. Since the 1930s, the homeownership rate has nearly doubled to 67 percent. Adriane Wilson was a homeowner until May. She lives in southern Maryland and works in law enforcement. After her interest rate ballooned, Wilson's house went into foreclosure.

Ms. ADRIANE WILSON: It was hard for me, I was crying. I really didn't want to lose my home. I was there for six years.

LANGFITT: Wilson says she learned one lesson: When you get a mortgage, read the fine print. The Great Depression taught lessons of its own about thrift and saving. Will this recession change Americans in the same way? Niall Ferguson, doubts it. He is a professor at Harvard and author of "The Ascent of Money: A History of Finance." Ferguson says after the fright of last fall, people are beginning to relax.

Professor NIALL FERGUSON (Author, Harvard University): They no longer regard this as the end of the world. And although they're not going to rush out to the shopping malls, waving plastic cards in the way they used to, nor are they going to revert to the behavior patterns of their grandparents who were scarred by the Depression.

LANGFITT: Ferguson thinks the government has done an effective job cushioning the blow of the recession. But, he adds, that also makes it less likely the downturn will radically change people's ways.

Frank Langfitt, NPR News, Washington.

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