Recessions have a way of freezing things. Credit, spending, labor mobility: everything seizes when uncertainty clutches the economy.
You can see signs of inertia both inside and outside the office. In the office, employees are spending more time with their current employer. The average salaried employee had spent 4.4 years with his employer in January 2010, nearly a full year longer than in 2000, and the highest number on record. An uncertain job market is keeping workers pat, and productive.
Outside the office, longer-term unemployment is becoming the new normal. In August, 6.2 million Americans, the population of Tennessee, were out of work for more than half a year. That's up 20 percent from August 2009, and it is by far the highest number on record. In fact, the median duration of unemployment today is twice the figure from the last major recession in the early 1980s.
The credit freeze has spread to a hiring freeze. But the stay-put economy isn't just about office, it's also about homes. Fewer children are leaving the nest. More families are coming together into single homes. Fewer parents are getting divorced. Love keeps families together, but the economy is providing a helluva glue, as well.
We've followed the boomerang trend, which is sending more college-educated graduates back to their parents to save while the hiring freeze thaws. Fully one in ten Americans between 20 and 35 chose to live with his or her parents to ride out the economic storm (see graph to the right.)
Families are weathering the recession by moving into a holding pattern: fewer divorces, fewer marriages, postponed children. A Pew study found that 21 percent of Millennials are waiting to become spouses and another 15 percent are waiting to become parents.
It's not hard to see why. As in business, economic uncertainty is the mother of caution for new couples. One in four men in newly formed couples in 2010 didn't work last year, and one in six couples has a non-working partner, according to a new paper by Rose M. Kreider.
We'll need some time to build perspective on how the Stay-Put Economy will change the way we think about work and family life. The rise of freelancing and the part-time economy suggests that when the market recovers, we should expect a more mobile workforce. But in terms of family, social trends were already moving toward later marriages, older parents, and delayed financial independence in large part because more young people -- in particular, more women -- are going to college and graduate school.
In the meantime, a frozen economy forcing nervous families to share tight spaces might help to explain why consumer sentiment continues to suffer despite a good month for the stock market. Economic confidence continues to kiss the floor in a new Gallup poll. Like everything else, American pessimism is staying put.
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