Free Recessions Impact on Small Town America Essay Sample


Recession can be defined as a period of temporary slowdown in economic activity. This can be characterized by a decline in the Gross Domestic Product (GDP) and overall decline in economic activities in region for a period of time. As   Elkhart (2008) observes, recession leads to troubling effects on small towns.  The small towns are more vulnerable to the effects of recession mostly because of their sizes.

Since the great recession that Americans faced between 1929 and 1933, the country has not encountered another more challenging and cruel recession than the present one over the history. Pew Research Centre reported that this downfall has been fueled by the bursting of the stock market and housing market bubbles. Though the country has encountered several recessions since the great rececession, their impact on the economy has not been as punishing as the current recession.

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The recession has significantly affected employment negatively. Majority of the people in the labor force has experienced one or more hardships since the economy dipped in recession. Some people have gone for some time without employment after being laid off by their respective employers. Many workers have been laid off after the economy sunk into recession. There is also another group of people who have faced a cut in their payments due to a fall in returns to their employing companies. This has also been caused by increased costs forcing Companies to transfer part of this extra cost to workers through a cut in pay.   Pew Research Centre report also reveals that many workers have also encountered an involuntary reduction in working hours while others have been forced to work part time opposite their wishes. This has led to a sharp fall in the level of incomes of the households living in small towns in America. The most affected people being the young adults especially those with less education.

The recession has also led to a rapid rise in the level of poverty. The level of income has fallen by 4.3% between 2008-2009. According to Schumer, about 46.6 million Americans lived in poverty in 2009 with national rate of poverty of 14.3%.  Other statistics by Pew Research Center displays that the wealth of an average family has declined by 20%.The loss of wealth is greater on the middle income households than those with lower and higher levels of income. Generally, these statistics indicates that recession has posed a big danger not only on the small towns but also on the entire country.

A survey carried out by Pew Researchers Center has also reported that the great recession has led many Americans to lose their optimism about their retirements and their children’s future. The pattern of spending and borrowing has changed significantly over the recession. The survey also found that it will take a long period for these families to move back to their original financial levels.

Low levels of income have hindered many people from accessing the health insurance coverage. Schumer argues that a big proportion of these people are employer based who relies on their salaries to service their insurance coverage. The number of uninsured people has now increased tremendously. About 16.7% of Americans were not insured in 2009 as the number of Americans without health insurance increased by five million between 2007 and 2009.

Recession has also led to a fall in the real median income. According to the statistics given by Schumer, the real median household income fell to $49,977 in 2009. This is the year in which the median household income hit the lowest level since 1997.

Majority of the Americans among them those living in small towns have been forced to adopt new frugality after the recession. People have changed their living styles in order to cope with the harsh effects of the recession especially by cutting down their levels of spending. Many people have also turned to less expensive brands.

Elkhart also observes that the recession has led to a fall in the business. This is because people have cut down their spending. This leads to a fall in the total sales per day leading to the closure of the business. Many workers have continued to be laid off as the companies continues to loose more and more.


The above discussion has clearly shown that the 2008-2009 recessions have posed a big problem on the small towns in America. However, a survey by Pew Researchers Center has indicated that the public have displayed a lot of optimism on economic recovery. 


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