What could the next economic downturn feel like?
The next recession – whenever that is – will be run-of-the-mill, economists expect. But for many people, their only or closest experience of a downturn was one for the record books: the Great Recession of 2007-2009.
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That one lasted 18 months, longer than any other since World War II, and massive job losses occurred years after the recession technically ended. It was characterized by foreclosures and long-term unemployment. Its aftermath is still felt today.
But that was atypical, and economists expect the next recession to be less severe and shorter because household debt is in better shape and banks are on solid footing.
While the economy is flashing some signs of trouble, we aren’t known to be in a recession yet. We wouldn’t know anyway because they are declared retroactively by the National Bureau of Economic Research.
Some economists, though, think one could hit in 2020.
If so, what can you expect?
Based on news headlines and clippings from the four recessions before the downturn of 2007-2009, here’s what an average recession looks like on the ground.
Say goodbye to jobs
Even in the mildest recessions, when job losses happen, it’s “devastating” to any individual affected, says Mark Zandi, chief economist at Moody’s Analytics.
Others lose hours, raises and bonuses. Those not directly affected may know people who lost jobs, either family, friends or colleagues. There’s a ripple effect.
“It may not be devastating,” Zandi says, “but it’s terribly uncomfortable.”
Take the 1991 recession and its impact in the Bronx, as chronicled by then-Newsday reporter Gail Collins, now an op-ed columnist for the New York Times. The downturn came in “like a flash flood. Everybody feels it,” she wrote.
In the article, Collins talked to a guy – Jeremy – who offered to pump gas at a self-service station in the New York City borough for tips. He once had a job, working at Roy Rogers, but he got laid off.
An owner of a nearby children’s clothing store thought about shuttering his store, according to the article.
“This is going to be my last year. I can’t hold on,” the store owner said then. “Nobody has any money,” his clerk said.
When a downturn hits, Americans also pinch their pennies. Spending on travel, entertainment and eating out are cut down.
A 1982 article from the United Press International noted that the recession then was hurting rock concerts and record sales at the time.
A Dallas promoter even blamed the break-up of The Doobie Brothers, who were then on their final national tour, on the recession. He noted that the group wouldn’t have separated “if the money was rolling in like it used to,” the article said.
Americans even abandoned doing their own car repairs to save money during the double-dip recession of the early 1980s, according to a 1982 UPI article.
”We’re seeing a lot of people not doing anything,” a spokesman with the Automotive Parts and Accessories Association said at the time. ”It’s the drive it till it stops syndrome.”
Family life during recessions
Even the kids aren’t spared.
A 1982 Associated Press article described how Jane Heim, who wrote letters to children from Santa Claus, had to choose her words carefully that year because of the recession.
“I have to tell them they may not get all the toys they are asking for,” she said. “Because of unemployment and the poor economy as a whole, we expect many parents to enclose a note saying they won’t be able to buy their children gifts they really want. This makes a very delicate situation, and it must be handled with kindness, tact and understanding.”
A Washington Post article from 1991 asked teenagers how the recession was affecting them: Lower allowances, a lack of summer jobs and fewer big-ticket Christmas gifts was what they said.
Many individuals turn their recession woes into opportunity.
In 2001, USA TODAY reported that Andrea Papa, a single mother who had been laid off from her job of 20 years, turned around and started her own media and marketing business. Another perk: She greeted her son when he got home from school.
“People have been telling me for years to do this, but as a single parent, I always said, ‘No.’ Then the decision was made for me,” Papa said then. “When I was laid off, one door was closed, but there is a myriad of other doors to choose from.”
Another 1991 article from The Advertiser in Australia found that the downturn there was boosting people’s sex lives.
“Sales of erotic lingerie and sex aids are booming, as couples spend time at home enjoying each other’s company,” the article said.
Even in a recession, there’s always a silver lining.
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