The Great Recession may have ended a decade ago — but when it comes to Americans’ finances, many have yet to bounce back.

A nationwide Bankrate survey found that nearly half (48 percent) of Americans who were adults when the downturn began in December 2007 have seen no improvement in their financial situation. One in four respondents (or 25 percent) report that their overall financial situation is about the same as it was when the worst economic crisis in nearly 80 years hit, while 23 percent say their situation is worse.

That comes at a time when the traditional economic data tells a story of booming growth and maximum employment. The expansion is poised to become the longest on record in July, and the unemployment rate is now at a near half-century low after 104-straight months of job creation.

Even though nationwide numbers paint a rosy picture overall, the survey underscores that such a recovery hasn’t been the reality for all Americans.

“The echoes of the financial crisis and Great Recession remain very present in the financial lives of many Americans, despite the improvement in the broader economy,” says Mark Hamrick, Bankrate’s senior economic analyst. “While some have managed to prosper in the decade since, there are still tens of millions who are struggling to even get back to where they were before the economy took a turn for the worse.”

Majority of Americans report negative impact from Great Recession

Bankrate’s survey delved into the experiences of Americans who were adults during the Great Recession, and the majority (55 percent) report that they were negatively impacted in some way.

Most notably, two in 10 Americans reported that their home lost value during the downtown. Nineteen percent lost money in the stock market, another 19 percent incurred substantial debt and 15 percent said either they or their partner lost a job. Seven percent of individuals depleted their emergency funds, while 6 percent tapped into their retirement savings.

It’s not surprising that many Americans’ financial situations still haven’t recovered from those negative outcomes, says Karen Dynan, an economics professor at Harvard who formerly worked for both the Federal Reserve’s board of governors and the Department of the Treasury.

“The recession and the weak recovery that followed it were really bad periods for some families,” Dynan says. “Given job loss and weak wage growth, a lot of families depleted any savings they had just to get by. We saw people running down their savings and cashing out their 401(k)s to make ends meet.”

Economic recovery hasn’t been even, survey finds

Just as the survey indicates that not all Americans have fully bounced back, the extent of individuals’ recovery has also been largely uneven.

Individuals who said they were negatively impacted by the Great Recession were more likely to be doing worse off now. More than a quarter (26 percent) of adults whose finances were harmed by the downturn now face a less favorable situation, compared with 14 percent of those who said they were not negatively impacted.

At the same time, more than a quarter (26 percent) of women said they were worse-off now, compared with 19 percent of men. Individuals with lower incomes and educational levels were also more likely to report that they were doing worse now than before the recession.

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Of the different generations, 25 percent of Baby Boomers said they were worse off, compared to just 19 members of the Silent Generation as well as Millennials.

Contributing to the general uneven nature of the economic recovery is underemployment, Dynan says. Individuals working part-time for economic reasons, such as not being able to find full-time work, have only just recently matched its pre-crisis level, according to the Labor Department.

At the same time, prime-age labor force participation (or the rate at which individuals aged 25 to 54 are working) recently returned to a “healthy level,” Dynan says, though it’s still below the pre-crisis level.

“The standard measure of unemployed has been at pre-crisis levels for several years now, but it took longer for other measures — like people working fewer hours than they wanted — to recover,” Dynan says. “What all this means is that while a lot of people may be back in jobs with growing wages, some are only beginning to rebuild the wealth they lost during the long earlier period of weakness.”

Why many Americans haven’t seen much improvement

But another factor is contributing to that uneven recovery, and it’s a harsh reality for the many individuals trying to enjoy the benefits of the current expansion: Wage growth has been stagnant.

Despite the largely positive gains associated with the job market and the economy, many Americans’ wallets have yet to feel the results.The majority (54 percent) of Americans said their wages or salaries haven’t recovered to their pre-recession level. Thirty-two percent said they were about the same, while 31 percent said they were worse off.

A slow pace of wage growth, even while the unemployment rate sits at historic lows “has been the puzzle of the economic recovery,” says Gary Burtless, a senior fellow in Economics Studies at the Brookings Institution in Washington, D.C., who works with the Future of the Middle Class Initiative. “We haven’t seen very much acceleration in wage gains or in the compensation per hour gains of American workers. That’s something of a mystery.”

Average hourly earnings on an annual basis breached 3 percent in October for the first time since 2009 — an occurrence that economists say should’ve occurred much earlier, based on economic theory suggesting that a low unemployment rate puts upward pressure on wages.

Analyzing data from the Bureau of Labor Statistics, Burtless estimates that since the third quarter of 2009 — around the time when the recession ended — the share of laborers’ business sector output (or the percentage of economic output that workers get as compensation for their labor) has ranged between 56 and 58 percent. At the beginning of this century, that share was closer to 64 percent.

In Bankrate’s survey, most of the individuals who saw improvement in their wages belonged to the top income level, or those who make $80,000 a year or more, according to the survey. The majority (65 percent) of individuals in this income category reported that their incomes were either much better or somewhat better since the crisis. That’s in line with Burtless’ analysis, which also found that the share of output is disproportionately going toward top earners.

“If you just look at the labor share, it turns out that inequality of the share has been going up,” Burtless says. “So the top-paid people across a huge range of industries and businesses are much better paid compared with the average worker.”

More than half (58 percent) of women reported that their pay hadn’t fully improved, compared with 48 percent of men. About 60 percent of individuals whose highest educational level is a high school diploma or less said their pay hadn’t fully recovered to its pre-crisis level, compared with 52 percent for individuals with some college or a 2-year degree and 46 percent for both bachelor’s and master’s degree holders.

Nearly a quarter (26 percent) of individuals in the Baby Boomer generation said their pay is worse, compared with just 16 percent of Millennials who were adults in 2007. More than one-third (36 percent) of respondents who reported that either they or their partner lost their job claim that their pay is worse now than before the recession.

Burtless also blames depressed wage growth on other longer-term trends. Since the 1980s, workers’ bargaining power has been declining, amid globalization and de-unionization.

“Workers in those areas of the economy have suffered a loss of wage share because they know that their employer can pretty much produce the same thing elsewhere. They realize if their wages get too high, it’s a big part of their business,” Burtless says. “Not having an institution that represents their interests or not having state legislatures in their corner protecting their interests is going to mean fewer wage increases and less fringe benefits.”

Americans’ perceptions that wages are worse than before the crisis may also be partly psychological, meaning “it’s the perception that other people are faring very well, and you’re not faring as well,” Burtless says. Median household income reached $61,372 in 2017, the third-straight annual increase, which brought it to a pre-crisis level, the Census Bureau reported on Sept. 12. But still, questions remain, he adds.

“The economic expansion began 10 years ago. Certainly in the last five years, workers have seen their pay increase, and the pay increases have more than offset for most wage ranges in our economy all of the losses associated with the Great Recession,” Burtless says. “But of course, the economy is considerably bigger than it was at the end of the last expansion. Why aren’t wages even higher than they are right now?”

Lessons from the Great Recession: Pay off debt, save for emergencies

But despite the uneven recovery, the Great Recession has caused many Americans to try and put one-foot forward. Only 29 percent say they have not changed their financial habits as a “direct result” of the downturn.

Among those who did make changes directly because of the recession, 29 percent say they have placed a priority on paying down debt. About a quarter (23 percent) are now saving more for emergencies, and 18 percent are saving more for retirement.

These are important steps that Americans should be taking now, in preparation for the next downturn, Hamrick says.

“It is critically important for Americans to try to save now for emergencies and for retirement while paying down or paying off debt,” Hamrick says. “Don’t wait to prepare until after it is too late when a financial storm has already arrived.”

Twelve percent of respondents also reported that the recession led them to look for a better job, and another 12 percent now have a more affordable home or mortgage. Ten percent invest less in the stock market, and 9 percent no longer want to own a home because of the recession.

Though some groups had warned about a housing bubble, both the downturn and its severity proved itself to be largely unexpected. Most economists say it’s unlikely that the next downturn will be as severe as this one, but busts following booms are still an inevitable part of the business cycle, Hamrick says.

“While the current economic expansion is on track to set a record for duration, there will be a downturn at some point,” he says. “We just don’t know when.”


Bankrate commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,740 adults, including 2,315 who were 18 or older when the recession began born before 1990. Fieldwork was undertaken on May 15-17, 2019. The survey was carried out online. The figures have been weighted and are representative of all U.S. adults (aged 18+).