Many individuals have been implying that we are currently heading towards another depression. There is also a possibility that America could end up facing another depression with in the next 5 or 6 years due to some economic problems. On the contrary, we have not experienced a depression since the Great Depression during the 20th century. Some similarities that contribute to the idea that we are heading towards another depression are: unemployment percentages, home foreclosures, and many different economic problems. On the other hand, some differences that contribute to the ideas that we are not heading into another depression are: minimum wages have not decreased, and we have a new president.
To begin, some similarities that contribute to the idea that the United States of America is heading into another depression is the unemployment percentages. Since October of 2003, payroll jobs have fallen by 2.4 million below the level of March 2001, according to Lee Price. Not only is the unemployment rate 6 percent, it is also rising at a pretty progressive speed. Also according to a report on “Understanding The Severity Of The current labor Slump” by Lee Price with Yulia Fungard, a number of factors must be considered in order to understand the severity of the current labor slump: The growth in the working age population since the recession began in March 2001 – Even as jobs were shrinking by 1.8 percent, the working age population (i.e., the number of people of working age) was growing by 3.4 percent. Had job growth kept up with working age population growth over that period, 6.9 million more payroll jobs would have been filled in October 2003. The effect of the “missing” labor market on the unemployment rate – The unusually prolonged loss of jobs has caused an unprecedented number of people to refrain
... Adler, A. B. (2007). Correlates and consequences of morale versus depression under stressful conditions. Journal of Occupational Health Psychology, 12, 34 ... least 6 months of tenure at their job. In addition, there was a full-time working sample included in the overall sample ... requirements resulted in a sample of 280 participants. The average age of the participants was 20 years old. Approximately 68% ...
from actively looking for work, and therefore to be excluded from the unemployment measurement. Had the labor force grown more in line with the population – as it has in past labor slumps – another 2.3 million people would have been in the labor force in October 2003. This “missing” labor force is significant because the unemployment rate would have been 7.4 percent had the 2.3 million “missing” workers been considered as unemployed.2 The 7.4 percent unemployment figure provides a better measure of current slack in the labor market than the actual unemployment rate of 6.0 percent. The 1.4 percentage-point difference reflects the people pushed to the sidelines of the labor market who can be expected to seek work again once job prospects improve. As a result, the official unemployment rate should not be expected to fall very much when the employment picture actually begins to improve. The loss of wage and salary income – Although real hourly wages have grown since the start of the recession, those gains have been more than offset by declines in the number of jobs and the amount of hours paid per job. This slump saw the longest duration of job loss – 28 months. This slump is the first time in which there was not a full recovery of jobs 31 months after the recession began. This slump is the worst in terms of the rise of the unemployment rate (after adjustment for the “missing” labor force) 31 months after the recession began – up 3.2 percentage points. The current slump has also been the most severe in terms of the loss of aggregate real wage and salary income 30 months after the recession began – down 1.2 percent.
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To continue, another similarity that contributes to the idea of another depression in the United States of America is home foreclosures. Many, many families have to undergo home foreclosures in the Unites States. According to Mortgage Bankers Association, 1 out of every 200 homes will be foreclosed upon. For a city like Washington, D.C., that translates to 3,000 Washingtonians losing their homes to foreclosure each year. Every three months, 250,000 new families enter into foreclosure. One child in every classroom in America is at risk of losing his/her home because their parents are unable to pay their mortgage.
– Based on information from the Mortgage Bankers Association
A slower real estate market can translate into falling prices and home values. As a result, homeowners who opted for adjustable rate mortgages may now find that as their mortgage rate adjusts higher, their home value is lower and therefore refinancing is no longer an option. Six in 10 homeowners wish they understood the terms and details of their mortgage better. More than 6 in 10 homeowners delinquent in their mortgage payments are not aware of services that mortgage lenders can offer to individuals having trouble with their mortgage.
– Freddie Mac/Roper poll of 2,031 U.S. homeowners, conducted 2005.
Furthermore, coming to a close on my choices of similarities of the idea that America is heading into another depression is economic problems. Some of the many economic problems
are: less amount of money, many more people are bankrupt and global warming. The prices of items are rising, but minimum wage is not. How are Americans supposed to pay for food, gas,
mortgage, clothes, etc. if they do not make enough money?! Due to the prices rising, many people are becoming bankrupt and some even become homeless.
On the other hand, some differences that contribute to the idea that the United States of America is not going into another depression are: minimum wages have not decreased, and the United States has been welcomed by a new president. Most Americans receive more than minimum wage according to a survey taken in 2003. But thankfully, for those who are making minimum wage, like me, the amount has not decreased. Since the minimum wage has not decreased, that contributes to the idea that the United States still has enough money, and America is not going into another depression.
... did a number of things to try and lift America out of the depression. Eventually Roosevelt managed to restore confidence in the ... people went hungry and living conditions changed drastically. The Great Depression hit farmers especially hard. In addition to the usual ... disapproval from the American public, Hoover finally budged. He allowed state funds to provide relief for the unemployed but this effort ...
Secondly, in 2009, the United States of America elected a new president, Obama. Obama’s campaign slogan was “Change”. Because we have a new president and he can look back on the past to see what was done and why the Great Depression of 1929 started, America may be able to prevent having to go through another depression. The Great Depression started due to, In October of 1930, the stock markets crashed, and it was the beginning of the Great Depression. Two months after the crash, stockholders had lost more than 40 billion dollars. Some reasons the Great Depression occurred is because of bank failures, reduction in purchasing, and drought conditions. In October of 2009, things will be different, the stock markets will not crash, and we
will not go into another depression. History will not repeat itself, as some say it does, and America will smarten up, and know what to do to prevent another depression.
In the end, there are many similarities and many differences on the subject of The Great Depression and our current economic crisis. But, I believe that Obama can change the path that we are heading on. If America can decline the amount of unemployment percentages, home foreclosures, and reverse the economic problems, another depression will be out of the question. Then, and only then, will the repeat of the Depression of 1929 will be nonexistent.