Demographic Differences in the 2008 Recession
My name is Abdullah Alobaidi. I will be receiving my A.A. degree at the end of the Spring 2021 semester and transferring to UI-UC to pursue a double-major in accounting and finance. Growing up in Dubai, UAE, I have always had an interest in business, considering the dramatic effect it had on transforming the UAE from an arid desert to a metropolis of the Middle East. Following my completion of my undergraduate degree, I will either pursue graduate school or, ideally, take a position that requires me to work between the US and the UAE.
Scholarships and Awards: American Dream Scholarship, Oakton Education Foundation Scholarship, Honors Scholar Designee
Abstract
The economy is a multi-dimensional system with countless variables that contribute to its health thus making it difficult to identify the specific causes. With that being said, one way or another, recessions occur as a result of an imbalance between supply and demand while consequently changing economic structures that shape the future. For example, the Great Recession of 2008 was the product of a housing bubble that saw housing prices drop to an economic shattering low. Investment banks bought mountains of mortgages from lenders, then sold those “mortgage-backed securities” to investors, who turned around and sold those to homebuyers. The supply chain continued and was furthermore stressed when insurance companies sold credit default swaps. This continuous cycle broke the economy and left many with no choice but foreclosure.
With both these recessions came a multitude of effects, whether that be unemployment rising to 10% or the NASDAQ falling more than 4000 points, crumbling the economy. African American men saw unemployment rates as high as 19.3%, in comparison to the average unemployment rate of 10% - white folks with a little under 9%. Black families also suffered furthermore in income, in which the average African American household earned $59,654 in 2010, representing only 61% of what a white family earned. Till today, African American families are yet to recover from the turmoil of the Great Recession with black families still making around 63% of what a white family makes.
Disparity amongst unemployment rates during recessions isn’t exclusive to race alone, but rather, age is heavily affected by discrimination as as well. The Great Recession left many of the young adults of 2008 showing a distinct pessimism of their future and whether it will be as bright and successful as their parents or grandparents. On the eve of the crises, the financial market lost more than 50% of the value it had gained between its peak in 2007 and the spring of 2009, shaving nearly 9 million jobs. Additionally, the unemployment rate for men in the Great Recession peaked higher than women at 11.1 % in October 2009, while women peaked at 9.0% in November 2010, at least 2 percentage points lower. With that being said, the unemployment amongst the genders has historically been relatively the same; however, the housing bubble burst particularly affected many construction and extraction occupations, sectors largely occupied by men.
Course: Honors: Principles of Financial Accounting
Instructor: Dr. Leslie Van Wolvelear, Accounting
