Great Depression Fallout
You only have to look as far as your grandmother’s house to know how the Great Depression impacted the psychology of that generation’s money habits. Socks were darned and shoes were handed down rather than replaced, even years after the Depression gave way to the Greatest Generation’s financial successes.
Today, we can all tell tales of the Great Recession, the economic downturn that started more than five years ago. So, what will be the long-term impact of the longest global economic decline since the 1920s? It’s still early to know with certainty. But some promising trends have emerged that are likely to linger even as the economy improves. Here are seven of them.
Women Now Contribute More to the Family Income
Women add more to household earnings now than before the start of the Great Recession, says new Carsey Institute research--contributing 47 percent on average now. (That’s 9 percent more than a quarter-century ago.) More of us are also working.
Women have regained all the jobs lost to the Great Recession, according to the U.S. Bureau of Labor Statistics, while men are still about 2.1 million jobs short of regaining those they lost. (That’s in part because men lost considerably more jobs in the downturn and some male-dominated sectors like construction and manufacturing have yet to recover.) That trend is not likely to reverse anytime soon as some of the fastest growing sectors are those that tend to attract more women, like retail, education, hospitality and tourism.
Keep it going: While there’s lower unemployment among women now than among men, there’s still a fair amount of work to be done to close the wage gap. Many of the fastest growing sectors are also among the lowest-paying. Networking can be key to getting higher level, better-paying jobs. (Try the National Association of Women Business Owners or look for local chapters in your area.) Acquiring skills that are increasingly in demand, and well-compensated, can also help. (Check out sites like skillshare.com and Generalassemb.ly for online skill-specific classes.)
We’re Taking More Control of Our Financial Planning & Earning Power
The economy is still growing steadily as we hum along in recovery mode, thanks in part to a renewed sense of optimism. Plus, 57 percent of women now have more earning power than ever before according to a 2013 Allianz study. This doesn’t mean we’re indulging in spendy splurges on jewelry or travel, either. Rather, more and more women, 62 percent to be exact, are becoming involved in retirement planning and expressing a stronger interest in taking control of their finances.
Keep it going: Continue gathering knowledge. Start with this decade by decade guide to saving, learn about brokerage account basics, or assess your risk tolerance. And if you you’re one who is still grappling with debt, or struggling to save, don’t despair. You can always turn your financial fate around. It’s never too late to start saving, as our resident financial advisor Jocelyn Black Hodes points out. She also outlines some simple steps to turn your finances around.
We Are More Eco-Aware
Maybe the popularity of urban bike shares hints at a stronger ethos on eco-friendly policies: A UCLA study published in the journal “Social Psychological and Personality Science” shows that the Great Recession is making an eco-friendly impact on the younger generation. High school seniors are said to be more concerned with conserving our natural resources and helping those less fortunate than those interviewed pre-2008. The Millennials prefer mass transit to fancy cars, for example, in an effort to protect our environment.
Keep it going: How popular are bike-sharing programs? They’ve doubled nationwide in 2013. So chances are, there’s one to join in your area. Besides helping to cut down on traffic, reducing pollution and getting exercise, most rides under 30 minutes are free.
We’re Less Peripatetic
If the burst of the housing bubble showed one thing, it’s that treating your well-earned, mortgaged home like a day-old sports bra doesn’t make good economic sense. Flipping your home or taking out second mortgages is more than risky. Americans lost more than $7 trillion in home equity. The upside of this downturn’s influence on home life? People are staying put in their abodes, finding happiness in laying down deeper roots in a community.
Keep it going: Invest in your surroundings with just as much vigor as you do the confines of your own home. Join your community’s neighborhood association or find out how to start one here. Getting involved will help protect—and improve—the area around your home sweet home (not to mention its value).
We’re More Attracted to Savers, Not Spenders
It seems a thrifty attitude makes you sexier in the post-Great Recession. According to new University of Michigan research, it’s not what’s in your wallet, but in your untouched, high-yield savings account, that makes you more attractive. Thanks to the recent economic downturn, people tend to respect the self-control of those who demonstrate saving more and spending less.
Keep it going: If you haven’t already, aim to save enough in an emergency fund that would cover about three to six months of living expenses. Want to earn more from your savings? Consider tying it up in a long-term certificate of deposit (CD). You can't touch CDs from three months to five years without a penalty--but the longer you let it sit, the higher the yield.
More of Us Are Becoming Entrepreneurs
We’d like you to meet a new wave of business leader: the Accidental Entrepreneur, according to a recent Forrester Research study. These successful small businesses are different from the ones that were decimated by the Great Recession. The owners created successful ventures out of necessity after being laid off, rather than a pursuit of a dream to be the next Steve Jobs. But because these accidental entrepreneurs were often skilled pros who were left in the dust during the downturn, they were able to recast their substantial skills into lucrative independent businesses.
Keep it going: Before you go all Jerry MaGuire and break out on your own, take a look at these 20 questions from the U.S. Small Business Administration to make sure you’re ready to make the leap.
We Have a Higher Appreciation for the Creative Class
With 20/20 hindsight, it seems those in more creative careers like the arts or education weathered the storm of a harsh economic climate better than those in other careers traditionally deemed more stable (think: finance and construction). A 2012 Cambridge Journal of Economics study of occupations found those with the lowest probability of being unemployed had “knowledge-based creative” positions. (Time to dust off that easel, perhaps?)
Keep it going: Remember, every innovation -- even in the most traditional workplace -- starts with a creative idea. Creating a workspace that fosters creativity--or spending time in environments that inspire you (which can mean just walking outside of your office building)--can do wonders to boost your mental magic. According to Mason Currey, author of “Daily Rituals: How Artists Work,” Igor Stravinsky would actually do a headstand to clear his mind.