Posts Tagged ‘effects of recession’

Since the beginning of the economic downturn, the tumbling stock market, a contracting job market and massive home foreclosures have occupied the nation’s attention. But there’s another effect of the ailing economy that’s just beginning to reveal itself: increasing car repossessions and the violent altercations occurring between repossesser and repossessee.

The economic slide and rising job-loss numbers increase the probability that consumers will default on their car loans, since most consumers will likely put a mortgage or rent payment before a car payment. Some analysts expect the number of repossessions to climb by five percent this year — on top of a nine-percent jump in 2007.¹ Others, however, predict a decrease in car repossessions because the number of financed cars has dwindled 32 percent since the recession began.²

But just because the pool of cars scheduled for repossession is shrinking doesn’t mean violent encounters over those cars will evaporate too. In fact, it’s quite the opposite. Car owners today — very aware that a sickly credit industry will make it much harder for them to replace a repossessed car with a new one — are desperate to hold on to the cars they already have.

While confrontation seems a natural aspect of the repossession process, the escalating resistance by some car owners is quickly turning the parties involved into casualties of the recession.

In a nearly unregulated profession, Joe Taylor, a repossession company insurer, warns the Associated Press, “If a guy is just put right on the street without training, the potential for violence is very, very high.”¹

When the dust settled on a dirt road following one such scuffle between 67-year-old retiree Jimmy Tanks and the men sent to repossess his Chrysler Sebring, one man was left dead and another charged with his murder.¹

According to reports, Tanks heard a noise outside his Alabama home late one night in June 2008, grabbed a gun and ran outside to confront the intruders. Who fired first and what happened next is less clear. What is clear is that a gunshot wound to the chest killed Tanks that night. Now, repo man Kenneth Alvin Smith awaits trial on murder charges for the 2:30 a.m. incident.¹

Since Tanks’ death in June 2008, two repo men also employed by Smith’s company have been involved in separate shooting incidents — leaving one wounded and the other dead.

With no end to the recession in sight, we’re only left to wonder if this violent trend will continue, and for how long.

Footnotes
¹ “Violence between repo men, car owners on the rise,” FoxNews.com, Feb. 27, 2009

² “The Recession’s Gotten So Bad, Even the Repo Man’s Singing the Blues,” Phillips, Michael M. Wall Street Journal, March 10, 2009

Amish church leaders in northern Indiana have relented in shunning one modern amenity — unemployment checks — to help unemployed members of their community survive.

It’s no longer possible for many Amish to earn a living through farming, due to rising land prices. Up to half of Amish men in Indiana now work in factories, according to a Los Angeles Times story.

Amish religious beliefs normally frown on such things as electricity, insurance and automobiles (the local Wal-Mart in northern Indiana has a hitching post for horse and buggies), but repeated rounds of factory layoffs have forced elders to relax the rules. The unemployment rate in Elkhart and LaGrange counties, where Amish populations are centered, has reached about 19%, the Times reported.

Although furniture-making has always been a mainstay occupation for the Amish, local shops aren’t able to hire all of the available workers because the demand for furniture like Amish-made tables, which retail for between $750 and $2,200, is off, too.

It’s been said that this recession is unique in that it’s cut a wide swath through every segment of the population, hurting those at every income level, in every occupation and of every age.

How vulnerable is the industry that you work in?

A story in the Wednesday issue of Tennessean reported that the bad economy is sending more people to the therapist’s couch. Anxiety, panic attacks, insomnia and other emotional problems are on the upswing as worries about job stability and bills take their toll.

According to a 2008 survey by The American Psychological Association, 80% of Americans say the economy is stressing them out. And that applies even to workers who still have jobs. Read more »

Grocery store baggers, gas station attendants, store clerks and latte servers – service jobs like these don’t pay well, but in a stagnant economy, an unexpected contest is now brewing between two generations vying for the few jobs that remain available.

Typically, service sector jobs attract young applicants in their teens and twenties, but after watching their retirement savings dry up, many retirees are headed back to work, competing with Gen-Xers for whatever entry-level jobs they can find. Read more »

Tent cities are cropping up in southern California, one of the regions hardest hit by the sub-prime mortgage and foreclosure crisis. Various news reports estimate anywhere from 300 to over 1,200 people, many of them whole families, living in tents in Sacramento. With homeless shelters full, many of the homeless are victims of job losses or foreclosures and have nowhere else to go.

The makeshift tent city, which lies within sight of Sacramento’s skyscrapers, has no electricity or plumbing.

Residents include a husband and wife who worked for the same company and who were both laid off on the same day¹, as well as a Vietnam veteran whose leg operation allowed him to walk after years in a wheelchair, but which also caused his disability payments to stop. Once the payments dried up, he could no longer afford to pay his rent.² Other residents said they were there because they could no longer afford their mortgage payments. Many of the homeless include those who worked in construction. Read more »

The economic downturn has succeeded in curtailing yet another ingrained American pastime ⎯ having children.

The Los Angeles Times recently reported that an increasing number of middle-class American families are deciding to postpone starting a family, or adding to their family, due to the economic crisis.

Baby boom and bust cycles do typically overlap the nation’s economic health; economic downturns often precipitate a drop in the U.S. fertility rate.

While there are still those who prefer that Mother Nature decide when they’ll make the celebratory announcement, young couples who may be saddled with new student loan debt and low starting salaries may have trouble taking care of themselves, let alone a new baby. For couples like these, the decision to delay parenthood until the economy improves is one that could ensure that parenthood, when it comes, will be more enjoyable and less stressful.

If you’re a parent, did you consider your own personal finances, or the general economic climate, before deciding to have children?