"Everybody was buying houses. The real estate market was exploding. We kept hearing that the prices would go up so we’d better hurry."|
text-align: right;>Julia, Small-business Owner, Melbourne, Florida</div>
The systems that drive our economy today are more global, technologically advanced, and complex than ever before. Our market economy of capitalism is dynamic, expanding and contracting in a regular pattern known as the business cycle. The economy also reacts to specific developments, as the 2020 downturn related to the COVID-19 pandemic has shown. The most recent economic crisis prior to the pandemic began in 2008 and is known as the “Great Recession.”
At the beginning of the 21st century, historically low interest rates on mortgages enabled huge numbers of Americans to buy houses. Unfortunately, many bought homes they couldn’t afford and ended up defaulting on their mortgages, leading some of the largest banks in the country to declare bankruptcy. Many retirement funds and investments plunged dramatically in value, devastating the economy. Consumer spending declined, hurting many businesses, and the unemployment rate climbed to nearly 10 percent (U.S. Bureau of Labor Statistics, 2020).
Economists and historians continue to debate the exact causes of and best solutions to economic downturns, but generally agree that they will happen again. Knowing this, we can look to the past to better understand how to prepare for the future. We will examine the importance of agility and problem solving in times of economic stress. We’ll also see that the economy has become increasingly global, so acquiring more skills and education is critical to withstanding economic disruption.
Here are some ways to ensure you’re as “recession proof” as possible:
Because of these shifts in how we work, our communication skill
and problem solving skill
are more important than ever—they are a critical part of being adaptable in today’s economy.
As we examine what happened in the past during economic challenges, we will look at both primary and secondary sources related to those events. This exploration will help us get a sense of what life was really like during those times and offer lessons for adapting to economic hardship that we can apply to our lives today.
Source: Strategic Education, Inc. 2020. Learn from the Past, Prepare for the Future.
Raptopoulos, Lilah. (2018, September 11). Weathering the Financial Crisis: How Seven Lives Were Changed. Financial Times. www.ig.ft.com/financial-crisis-voices/
U.S. Bureau of Labor Statistics. (2020). Labor Force Statistics from the Current Population Survey. (LNS14000000) [Data]. www.data.bls.gov/timeseries/LNS14000000