Max Baucus, a Democratic Senator from Montana, referred to our current economic climate as “the Great Recession” this week. To be fair to Baucus, he isn’t the first to use the term. But referring to our times as The Great Recession obviously and intentionally invokes the Great Depression. That got me to thinking: just how bad are things out there? Is it fair to start comparing our situation to the Great Depression?
Right now, unemployment is hovering around 10% nationwide. The worst of the worst are the states of Nevada and Michigan, coming in at nearly 14%. During the Great Depression, the number nationwide was 25%. To drive that number home, that is one out of every four people unemployed. That doesn’t count housewives and students. One out of every four people seeking gainful employment was out of luck.
By contrast, the current rate of 10% is bad, but not capital G “Great” bad. Unemployment hit approximately the same levels back in 1983, so this current recession is not unprecedented in our lifetimes, unless you’re under 27, in which case let me tell you how bad things were when I was a boy, sonny…
Sorry; back to the point. It is hard to compare today’s unemployment to that of the Great Depression Era. Consider that in the 1920s, two-income families were a rarity. If Dad was unemployed, the whole family’s income was gone.
In 2010, single-income families have become the exception, rather than the rule. If Dad is unemployed, Mom is probably still holding down a job. I’m not saying that losing half your family’s income is a whole lot better than losing all of it, but it is a different dynamic. Unemployment benefits provided by the Federal Government also make 2010 unemployment very different from 1930 unemployment.
In summary, it is bad out there. Anyone who tells you otherwise is confused, misinformed, or lying. But Great Recession bad? I’m not sure. History will decide. If our grandchildren are reading about the recession of the late 2000s (and well into the 2010s, I’m afraid), then we’ll know Baucus is right. But if we cycle out of this to good times and then back into another, similar recession in another 25 years, then our current problems will be nothing more than a footnote in the cyclical economic history.
