Recession vs. Depression

TIPPECANOE COUNTY, Ind. (WLFI) - Many families are feeling the impact of the sluggish economy. Layoffs, foreclosures, and dipping stocks leave people struggling to pay bills. Economists call it a recession, but those impacted compare it to a depression.

"It's a lot like what we're going through now," said Francis Brewer who survived the Great Depression.

Francis Brewer lived through the Great Depression. Seventy-eight years later, he sees similar signs tougher times are to come.

"It hit Wall Street," he explained. "Took a while for it to go to the small towns."

Rocky financial times found Francis and his family on a grain farm between Kentland and Goodland.

"Nothing was ever thrown away. Nothing," he said of the Depression days. "The feed sacks were pillow cases and you could make a blouse out of them, shirt out of them, make a skirt."

Purdue Economics Professor Jerry Lynch said there is no official definition of recession or depression. Despite rising unemployment and fewer goods and services being produced, Lynch believes we are far from depression.

"Is this going to be like the Great Depression? We'd have to wait four years to see. We'd have to have three and half more years of very difficult times," he said.

One economic indicator to compare: the number of workers without jobs.

"The unemployment rate right now is about 8.1 percent," explained Lynch. "The unemployment rate at the peak of the Great Depression was 25 percent"

Brewer's parents found themselves in that percentage. Grain commodities plummeted and the family couldn't sell their corn. So, the family used its livelihood for heat.

"Since the market for corn when to zero, I remember my dad and his brothers, they would scoop corn in the furnace," he said.

There was no way to sell the corn and no money to buy more seed. So, the Francis' family sold the farm to survive.

"I begged to stay home from school that day," remembered Brewer. "I was six. I wanted to skip school and stay home and they wouldn't let me. So when I got on the school bus, I heard the auctioneer in the barn."

These tough economic times are impacting workers in a different way. Jobs once considered recession proof are now not safe. White collar workers with higher degrees are finding themselves in the unemployment line.

"This particular downtown will hit the white collar sector more in a sense because the financial and banking sector is taking a hit and there are fewer manufacturing jobs than before," said Lynch.

Lynch believes the good news is Greater Lafayette will fair better than other areas. Purdue University will help shelter many from financial ruin.

"There are still 40,000 students walking around on campus and they need services and faculty to teach them," he said.

Even when the economy shows signs of recovery, job recovery will lag. Employers will hesitate to hire people until they know there is enough work to keep them busy.

"You want to make sure the turnaround has come before you take them back on," said Lynch.

When will prosperous times return? Brewer struggled years after the depression officially ended and he has an answer:

"Everyone asks how long will it last? How long until it's over? It will depend on you," he said. "You may rise faster. You may be in a job where it doesn't effect you."