2009Aug28 Living in the Great Recession

This week’s poll results examine how respondents view their adaptations to living in The Great Recession. The poll was not scientific and was driven by radio listeners of the syndicated Don Creech Radio Show and subscribers to its “Week in Review” email. Listen or subscribe at http://www.DonCreech.com.

 

Are you spending less in restaurants than last year?

Over 90% have reduced dining out expenses. We have witnessed this ourselves when we have been out. It has been easier to get seating and in some areas there has been a noticeable increase in business closings. Restaurants are dependent on discretionary income. When families become more cautious with their spending, dining out is an easy give-up.

 

Have you scaled back your gift giving expectations from last year?

Almost 70% have scaled back planned gifts for this year. This seems to justify the concerns for a poor retail Christmas season.

 

Have you scaled back your vacation expenditures from last year?

More than half of respondents have not reduced planned vacations. There is an increase in “stay-cations” – vacations that are close to home reducing the travel expenses and possibly the cost for hotels. Apparently, there is still a desire to get away from the drumbeat of the daily grind.

 

Are you or a family member (including adult child) under-employed (not working as much as you want or not fully utilizing your skills)?

More than ¾ of respondents indicated that their job skills are not being fully utilized. The implications of this are lower income and therefore less cash to spend in “jump starting” the economy. This has a serious trickle-down impact on the economy. Fewer hours and less pay means less to spend. Your employer is doing less business and purchasing less from suppliers. Suppliers cut hours or wages and buy less from their suppliers. Without growth in consumer spending, the dollars continue to trickle-in instead of flooding the cash register.

 

Are you willing to vote for more state taxes to sustain local education?

This will present some difficult generational conflicts as more than 90% of the respondents indicated they would vote against an increase in taxes for schools.

As Boomers retire, they will become the dominant voting bloc by age. Their children, the X-Gens are fewer in number and will want help supporting local schools. They will be at odds with their parents who have already “paid their dues” on the local school issues.

 

Are you willing to vote for more state taxes to extend state unemployment benefits?

The same percentage indicated they would not vote for more funding of extended unemployment benefits. When your own financial situation has turned down, it is increasingly difficult to give money to the state for any cause. The expectation of personal responsibility increases from those still employed as the demand for state services increases.

 

Are you willing to vote for more state taxes to maintain state healthcare programs?

With all of the debate on healthcare this year, you might assume that the majority of people would be in favor of higher taxes to maintain state healthcare programs. You would be wrong. Again, more than 90% of the respondents indicated a negative bias towards more taxes even if it was spent on the state’s healthcare programs. The three years of experience in Massachusetts indicates that even with mandatory coverage requirements, citizens will figure out how to minimize their contributions to “the system.”

 

Are you willing to vote for more state taxes to maintain courts and prisons?

This issue resulted in a significant shift from the “no more taxes” orientation that is evident in the prior questions. Over sixty percent would be in favor of paying more taxes to maintain the courts and prisons. Of course, that begs the question of where would a new prison be located. NIMBYs (Not In My Back Yard) have dominated that debate for decades resulting in little new prison construction nationwide.

 

Do you expect the recession to end this year?

If our respondents are representative of the population at large, and I am not certain that they are, this is not good news for the Administration. Less than one third answered in the affirmative. This seems to be consistent with the recent downturn in consumer confidence and spending. People with a positive outlook anticipating the end of the recession would likely be giving pollsters more favorable answers and more likely to be spending their income.