ASFAE Asociación de Directivos Superiores de las Facultades de Administración, Negocios o Empresariales
RESUMEN
The New Great Recession
In December 2007, the US economy entered the longest and the deepest economic downturn since the Great Depression. In the US between 2007 and 2009, the national unemployment rate doubled, increasing from 4.6% in 2007 to 9.3% in 2009 (U.S. Department of Labor, 2009). Job loss was particularly high among African American men, lower-educated men and workers in male-dominated industries, such as construction, manufacturing and finance. In contrast, the economy added jobs in some female-dominated industries, such as education and health services (Smith, 2009).
Growing evidence suggests that in the face of high male unemployment, women entered the labor force to supplement family income (Şahin et al., 2010).
Due to fast-paced globalization in the recent decades, the present recession is more global in nature and has a broader global impact when compared to past recessions. By February 2009, the unemployment in the Eurozone reached 8.5% (Eurostat, 2009). As of April 2009, Spain led Europe with an unemployment rate of 15.5%, reflecting more than 3.6 million people unemployed. Spain also held the record of unemployed youth (31.8%) and high rates of female unemployment (16.3%). The stock market declined to record levels and is still experiencing wild volatility all over the world. Many people have seen the value of their financial portfolios and retirement funds plummet. In the Anglo-Saxon world several major banks have failed. Individuals, small and medium-sized enterprises (SMEs), as well as large enterprises have found it difficult to borrow. This instability prompted massive layoffs to cut down on production costs. Global unemployment reached 51 million (ILO, 2009).
The term “economic cycle” refers to fluctuations that affect all market economies. It consists of a cycle that typically repeats every five to seven years in which the real gross domestic product moves through four stages of expansion, peaking, recession and recovery. Despite numerous attempts to explain the causes of economic cycles, no theory is universally accepted or applicable. Since a trade market works in a state of imperfect competition, the depth and length of the current depression is unknown. Not even the Nobel Prize-winning economists know when this situation will “hit bottom” or how long a recovery will take.
The National Bureau of Economic Research (NBER) stated that the official end of the Great Recession was in June 2009, yet American families continue to experience the pain of massive job loss and slow job recovery (Smith, 2010).