During a recession, different segments of the population can be affected in different ways. Here are some ways that different groups can be impacted:
This article is the continued series of articles on recession :
Low-income households: Low-income households tend to suffer the most during a recession. This is because they may be more likely to have jobs that are vulnerable to layoffs or reduced hours, such as those in the retail or service sectors. Additionally, low-income households may have less savings to fall back on during tough economic times, which can lead to increased financial stress and hardship. According to a report by the Pew Research Center, during the 2007-2009 recession, households in the lowest income quintile experienced a 42% decline in net worth, compared to a 19% decline for the top quintile.
Job losses: During a recession, job losses can be widespread across different sectors of the economy. This can lead to increased unemployment rates and decreased income for affected individuals and households. In addition to the financial impact, job loss can also have negative psychological effects, such as increased stress and decreased well-being.
Reduced spending power: During a recession, consumers may cut back on discretionary spending and focus on essential goods and services. This can lead to decreased demand for non-essential goods and services, which can in turn lead to decreased revenues and potential job losses for companies in those sectors.
Healthcare industry: Despite the negative impacts of a recession, some industries can benefit from increased demand for their goods and services. One example is the healthcare industry, which tends to be more recession-proof than other industries. During a recession, consumers may still need healthcare services, such as doctor visits and prescription drugs. Additionally, some healthcare companies may benefit from increased demand for pandemic-related products, such as vaccines and personal protective equipment.
E-commerce industry: Another industry that can benefit during a recession is the e-commerce industry. With increased social distancing and decreased in-person shopping, consumers may turn to online shopping as a safer and more convenient option. According to a report by Adobe Analytics, online spending in the U.S. during the 2020 holiday season increased by 32.2% compared to the previous year, with online spending on Black Friday alone reaching $9 billion.
In conclusion, low-income households tend to suffer the most during a recession due to job losses, decreased income, and financial stress. However, some industries, such as healthcare and e-commerce, can benefit from increased
