The Great Recession: The Cost Of Unemployment

The costs of unemployment to the individual are not hard to imagine. When a person loses his or her job, there is often an immediate impact to that person's standard of living. Prior to the Great Recession, the average savings rate in the U.S. had been drifting down towards zero (and sometimes below), and there are anecdotal reports that the average person is only a few weeks away from serious financial trouble without a paying job. Even for those eligible for unemployment benefits and other forms of government assistance (like food assistance), it is often the case that these benefits replace 50% or less of their regular income. That means these people are consuming far less than usual.