While the Foreclosure Crisis is Raging, Unemployment is Squeezing Families
In previous days the automobile unions had a strong say in money matters. The auto firms were compelled to pay nearly 95% of the gap between the salary and the unemployed benefits. But since then the unions have declined in size and influence. Michale LeRoy of University of Illinois said “that would be inconceivable today.”
Today while the foreclosure crisis is raging, unemployment is squeezing families tighter because of a more lax and less conservative attitude towards spending and saving.
On an average a person is weighed down with $46,000 in debt that includes house mortgage, credit card, automobile loans and other types of consumer loans. It is a far heavier weight than in 1982 when the per capita debt calculated in today’s dollars amounted to $14,000.
It is the same grim picture in matters of savings. In 2008 savings on after-tax income was a mere 2.7%. In 1982 it was 10.9%. In general Americans saved $940 in 2008 as compared to 1982 savings of $2,537. These figures accounts for foreclosure numbers being 7 times higher than yester years. This means three times more citizens are entering bankruptcy.
Lawrence Mishel of Economic Policy Institute said that the rippling effects of the increasing unemployment figure will have an impact for many years to come. He forecasts that the poverty rate of children will increase to 27% in 2011. In 2007 it was 18%. He commented that it would scar a whole generation of children.
The irony is that for someone unemployed right now it is more advantageous to continue to remain so, than it would a generation previously.
Surveys conducted by the government show that if one is laid off it is most probably final. The unemployed of today have lost their jobs for nearly 18 months approximately. During the early 80’s they remained unemployed for a maximum period of 4 months.
A prime reason for this is that construction and finance sectors may never regain previous heights again – the peaks of the pre-recession mark. Another reason is that the manufacturers are making use of more technology to give a boost to productivity; alternatively they hare hiring cheaper servicers from overseas with improvement in the economy.
Many have been prematurely retired with no traditional income to fall back on. Only 11% of those still working are covered by traditional pension. It is less by 50% from 1982 figures.
- The Foreclosure Crisis has brought the issue of Reform in the Financial System
- The Foreclosure Crisis has caused much Exposure to the Federal Reserve
- Foreclosure Crisis has Raked up Issues relating to Racial Disparities
- Average American is Uneasy of the Recovery of Foreclosure Crisis
- Banks are Crying out that they Should not be Vilified for the Foreclosure Crisis
- The Foreclosure Crisis has Worsened
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[...] Mortgage Bankers Association report indicates the worsening of the foreclosure crisis. One out of seven mortgage loans are in some stage of foreclosure – the number having gone up [...]