November 22, 1991
"Recession Hits Home"
San Jose Mercury News
By Timothy Taylor
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A BIT of recession humor is taped to some office doors near mine:

"When your neighbors lose their jobs, it's an economic slowdown. When you lose your job, it's a recession. When economists start losing their jobs, it's a depression."

I now have a more personal definition of recession. In the past few weeks, both my father and father-in-law have lost their jobs. Both are in their mid- to late 50s, a dangerous age to be when profits are down and the head office starts trimming back. Both have worked all of their adult lives.

Service, High-tech Sectors
One worked in the service sector for an insurance broker, a job he had held for 16 years. The other worked in the high-tech industry as a designer of computer networks, a job he had held for 14 years. In theory, at least, the service sector and high- tech industry are the places where the U.S. economy is generating new jobs, but you'd have a hard time proving it by the recent experience of my family.

Unemployment is a tremendous social and personal waste. That's not a new thought, of course, but it's one that occurs to me with more emphasis these past few weeks.

One visible symptom of recession and higher unemployment is a cash crunch for government at all levels, as benefits for the unemployed and poor rise, and tax revenues dry up.

A less apparent cost is that unused manpower and resources are a loss to the entire economy. Estimates of the cost of recession to the entire economy are unavoidably inexact. But if the current increase in unemployment costs 2 percent of the total gross national product of $5.6 trillion, that implies loss of $112 billion in productive power, or about $1,200 on average for every U.S. household. The economy works best for all of us when everyone who wants to is working.

For the unemployed and their families, there is tension and uncertainty. Both fathers seem to be coping quite well, all things considered, but wives and children have little experience in dealing with an out-of-work father. Both fathers have shouldered the responsibility of being the primary family breadwinner for all of my life; they're from a generation where men accepted that burden as a central part of their identity.

New Rules
Now, my wife and I find ourselves wondering if this spell of unemployment marks the beginning of times when we will need to start taking responsibility for them. But what sort of support is helpful, and what sort might be invasive? Now that my wife and I have grown into adulthood, where can we go to learn the new rules of parent-child interdependency?

But even as I grit my teeth, long-distance, at companies that have the poor business sense and temerity to lay off my relatives, I know that my folks and in-laws are economically fortunate. Moreover, they have the sense to recognize their good fortune, even now.

Both fathers received healthy, if not especially generous, severance packages. Both families have money saved, and my mother earns a good salary. Both families benefited from buying their first house a couple of decades ago, and thus don't have enormous mortgages looming. The children from both families, except for my youngest brother, are through college.

Moreover, both fathers have strong job histories and even in a down economy, they will probably not have great trouble (knock on wood) in finding another job.

After all, this recession has been a mild one by historical standards. The October unemployment rate was 6.8 percent, compared with 5.7 percent in October 1990 and 5.3 percent in October 1989. Inflation in consumer prices was 3.4 percent for year ending in September 1991; it had been 6.2 percent for the year ending in September 1990.

The so-called "misery index," obtained by adding the unemployment and inflation rates, is actually lower now than a year ago.

Worse Times
It doesn't take a grizzled old-timer to remember worse times. During the six years from 1980 to 1986, the annual unemployment rate didn't fall below 7 percent, and averaged 8 percent. During the four years from 1978 to 1981, annual inflation in consumer prices never fell below 8.9 percent, and averaged 11 percent per year.

In comparison to that case of economic influenza, the current recession is just a hacking cough. My parents and in- laws will be just fine, and my brain knows it. These things happen. It's no one's fault. Times are tough all over. No one ever promised them a rose garden. Roll with the punches.

But when fluctuations in the economy hit home, it's hard for the heart to find solace in statistics and generalized optimism.

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