5 Good Things About a Recession09.15.11
We know recessions are not fun, especially when family, friends, neighbors – or maybe even you personally – have lost jobs, businesses, money and homes.
But we want you to explore what positives can come out of these tumultuous times. The truth is that there are upsides to a recession. Cotton Candy contributor Ornella Grosz ventures to explore five GOOD – that’s right, good – things about a recession.
From a classical economic view, a recession plays healthy role in the cycles of the economy. They twist out high levels of risk out of the market giving opportunity to others. Recessions shrink trade deficits, lowers interest rates, and provide an opportunity for those who had been priced out of the market during the boom times to buy stocks and real estate. With stagnant wages, going back to school can be a good time during a recession. The forgone wages while in school during booming times would be more expensive than the forgone stagnant wages.
Have you become more conscious about your spending since the recession? A growing number of people are pinching their pennies. We are being clever in saving money by buying less and not buying new. We are even going as far as obtaining a simple water filter and reusable bottle to avoid buying bottled water. According to the most recent report by the Bureau of Economic Analysis, our personal savings rate hovers around five percent compared to less than one percent in 2007 (before the financial crisis). What’s better is that a recession has fueled a surge in library visits.
A recession gives you a new perspective to the true meaning and goals of your lives. If you were laid off, you could use the extra time to do something useful until you find a new job, such as volunteering, reading and discovering your passion. While others are focused on the recession, this is a good time for you to focus on revitalizing your career. Take on challenging projects and step out of your comfort zone.
Birth of New Companies
Using history as a guide, we can expect some industry shapers to emerge out of economic downturns. For example FedEx was founded during “The Oil Crisis of 1973,” General Motors was founded during “The Panic of 1907,” Proctor and Gamble was founded during “The Panic of 1837,” and Revlon was founded in the midst of the Great Depression. Historically, recessions are an opportunity for innovation. Rents are cheaper and there is less competition.
Getting people to live healthier lives
Some economists suggest that, historically, a recession can actually help you live longer. When looking to cut costs, you might be likely to cut back on items such as alcohol or cigarettes. When money is tight, your priorities change. Instead of indulging at a fancy restaurant you might stay at home to cook more of your meals. During tough economic times, we are encouraged to reflect on our lives and change them for the better.