For the unemployed, the dream’s a nightmare

Work hard and play by the rules and you'll get ahead. That's been an article of faith, since at least the birth of this nation, in what has come to be called the American dream.

That's now a shattered dream for millions of Americans, according to a new study released by Rutgers University.

This recession is not as bad as the Great Depression, but it's a close cousin, said Carl Van Horn, director of Rutgers' John J. Heldrich Center for Workforce Development, and co-author with Cliff Zukin and Jessica Godofsky of The Shattered American Dream: Unemployed Workers Lose Ground, Hope, and Faith in their Futures.

This study reveals what happens when you have a long, tough recession, Van Horn said. It changes people's thinking and people's attitudes. There is now an air of resignation and pessimism.

According to government figures, close to 10 percent of the American workforce is unemployed. The actual ratio is higher, experts say, because many people have stopped looking for work and go uncounted. The Rutgers report notes that 8.5 million jobs have been lost in what is being called the Great Recession.

The Heldrich Center first interviewed a national sample of 1,202 unemployed workers in August 2009, using the web-enabled KnowledgePanel conducted by Knowledge Networks of Menlo Park, CA. Just over 900 were re-interviewed in March 2010 and 764 were re-interviewed between Nov. 5 and Nov. 28, 2010.

Among the main findings of the survey:

• More than half of the unemployed (58 percent) are pessimistic about finding a job in the near future.

• By a margin of 61 percent to 35 percent, more feel they will be stuck in their current financial shape rather than making it back to where they were before the recession began.

• Three in five (61 percent) say the economic situation has had a major impact on their family; over half say the recession has caused them to make a major change in their lifestyle.

The depth and length of the recession's toll on the unemployed has caused them first to question and now to disbelieve one of the fundamental tenets of the American credo - that people have it in their power to succeed if they work hard enough, Zukin said.

The Heldrich Center survey of the unemployed found that 57 percent believe that hard work does not guarantee success, and just 40 percent feel that hard work will lead to success.

Van Horn said several factors converge to weigh heavily upon working families and the society in general.

We are seeing structural changes in the economy, he said. A huge decline in manufacturing. A huge decline in the construction industry. No new homes are being built. Unemployment in the construction trades is at 40 percent. Many of those jobs belonged to older men.

While the situation is bad for millions, the survey found that older workers and members of minorities are having the most difficult time finding re-employment. The report also noted that many people take lesser paying jobs, and jobs they don't like, simply to have work.

The situation creates wage compression, Van Horn said. Employers know they can get skilled workers for less pay and they are taking advantage of the situation. People take jobs below their education and training levels. We now have a downwardly mobile workforce.

The workers are the immediate casualties of the recession, but their families also feel it. Unemployment and re-employment at lower paying jobs take a toll on children's educations.

Less people can afford to give their children a good education while, because of the stresses of the struggling economy, the cost of education is increasing. It's a bad cycle, and at the very time that policymakers are saying the U.S. needs to be better educated to be more competitive in the global economy, Van Horn said.

The report shows that people needing help have lost faith in the government's ability to provide that help.

Coming on the heels of the national election on Nov. 2, the survey found that only 30 percent of the unemployed feel more hopeful about an economic recovery as a result of the election. When asked to choose between President Obama and the Republicans in Congress in who they trust to do a better job handling the economy, neither won at 41 percent. One third chose the President and far fewer - just 17 percent - picked the Republicans in Congress.

Yet, Van Horn said, market forces alone cannot be relied upon to correct the situation, not if the nation values a huge portion of its citizens.

This recession should be engendering serious thought about public policy, he said. We need more of a concentration on re-training. It makes no sense at all to simply 'discard' all these people.

If people with jobs think the ranks of the unemployed have nothing to do with them, think again, Van Horn said.

There is a huge increase in people applying for Social Security benefits as soon as they can, another huge increase in people applying for disability, and for food stamps, he said. These are big drains on the economy, which is itself less competitive because so many workers are idle. People cannot say that the unemployed don't matter. They matter a great deal.