Who Suffers during Recessions? (2024)

FAQs

Who suffers during recessions? ›

Our findings are summarized as follows: First, the labor market decline in the Great Recession is both deeper and longer than the early 1980s recession. Second, the impacts of the Great Recession have been felt most strongly for men, black and Hispanic workers, youth, and low-education workers.

Businesses large and small face declines in sales and profits in a recession. Their efforts to cut costs may include layoffs and cuts in capital spending, marketing, and research. Recessions may curb credit access, slow collections, and spur business bankruptcies.

The recession was not felt equally around the world; whereas most of the world's developed economies, particularly in North America, South America and Europe, fell into a severe, sustained recession, many more recently developing economies suffered far less impact, particularly China, India and Indonesia, whose ...

Both the employees and firms get hurt by the recession. Employees lose their jobs and are forced to a lower standard of living while the firms undergo abnormal profits.

Layoffs and hiring freezes are expected to continue in the industry during a possible recession. Workers in transportation & warehousing; construction; and repair, personal & other services are also at higher risk of job loss.

The "losers" are those industries that grew at least 1 percentage point slower than nominal GDP. I define all remaining industries as "average"—that is, those that grew between 1 and –1 percentage point of nominal GDP.

The jobs that are the “first to go” when a recession hits are the ones that depend on consumer spending and people having copious disposable income, says Kory Kantenga, a senior economist at LinkedIn. Retail, restaurants, hotels and real estate are some of the businesses often hurt during a recession.

Who is least affected by a recession? ›

Defensive sectors like health care, staples, and utilities could be less vulnerable to recession risk.

Some industries feel the impact of an economic downturn more than others. These industries tend to get hit the hardest. Hospitality and tourism - Many cut down on vacations and travel to save money. Entertainment and leisure - People tend to seek inexpensive, at-home forms of entertainment during a recession.

We find that the impacts of the Great Recession are not uniform across demographic groups and have been felt most strongly for men, black and Hispanic workers, youth, and low-education workers.

When the market rebounded, Getty was a rich man, thanks to his action when the economy appeared to be at its worst. The same thing happened to people like Warren Buffett, Jamie Dimon, and Carl Icahn during the Great Recession of 2008. Each zigged when the rest of the world zagged.

Similarly, if you're receiving other income sources, like Social Security or a pension, it may be easier to minimize your retirement fund withdrawals. On the other hand, if your savings are falling short, a recession could make it harder for your money to last throughout retirement.