The Effects of the Financial Crisis on American Households

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Presentation transcript:

The Effects of the Financial Crisis on American Households By XXXXXXXXXXXX Qatar University

Overview Introduction First Effect: The cut back on household expenditure Second Effect: Reduction of wealth Third Effect: postponement of retirement Conclusion References

Introduction What is a financial crisis? 2008-2009 American financial crisis: Some background information Impacts of the financial crisis

First Effect Reducing Household Spending Reduced wages due to bankruptcy Emplyers paying lower than the minimum wage (Öner, 2012) Impact on families’ lifestyle Unemployment More than 8.7 million reduction in labor force (Atkinson, Luttrell & Rosenblum, 2013) Resorting to savings Selling property

Second Effect Reduction of Wealth Failing to pay back bank loans Selling properties decline in the real estate prices (Nayak, 2013) Unemployment More than 8.7 million reduction in labor force (Atkinson, Luttrell & Rosenblum, 2013) Resorting to savings Selling property at lower cost loss of shares in stock markets 50% decrease (Dwyer, 2012)

Third Effect Postponement of Retirement Having to use retirement money Support family during crisis Need to accumulate more earnings for retirement (Whitehouse, 2009) Impact on retirement plan

Conclusion During the crisis, many Americans … were forced to reduce their spending lost their equities and investments in the real estate and stock markets decided to postpone their retirement Governments might need to have a role in overseeing the financial market of their respective countries regardless of the type of economic system they have

References