Job Losses Skewing Perceptions On Economy, Finances

It’s all about perspective.

While Arkansas attitudes on the economy remain more negative than positive, there are a variety of factors skewing those results, according to the latest Arkansas Consumer Confidence Report.

The Arkansas Consumer Confidence Report, which you can view here, is conducted quarterly by Talk Business and Hendrix College and is sponsored by Delta Trust & Bank and the Electric Cooperatives of Arkansas.  Nationally, U.S. consumer confidence dropped to a two-year low, it was reported yesterday.

Our most recent survey of 478 registered Arkansas voters shows that just 16% think their financial situations will be better off 6 months from today. Nearly 47% plan to spend less money in the next 6 months as they opt to conserve money. And 74.5% say it is hard to find a job in their communities.

"These numbers continue a pessimistic trend we’ve been seeing for three quarters now," said Talk Business executive editor Roby Brock. "Arkansas consumers are reeling psychologically regarding their perceptions of the economy, even when some evidence exists of improvement."

Job losses are a huge factor driving the negativity as Arkansas has seen its state unemployment rise in the last 6 months by a half-percentage point to 8.3% in September.

"The pessimism about jobs and employment don’t surprise me considering the unemployment rate in Arkansas remains relatively high," said Kirkley Thomas, manager of economic development for the Electric Cooperatives of Arkansas. "This lack of employment growth directly affects consumer spending so it’s as if we’re treading water, just trying to stay in place and survive."

In our latest poll, we asked two new questions to gauge confidence:

Q: In the last year, have you or someone you’re close to – a family member, friend or neighbor – lost his or her job?
60%    Yes
40%    No

Q: Do you believe that off-shoring, also known as outsourcing jobs, has cost people in your community their jobs?
63.5%    Yes
16%       No
20.5%    Don’t know

Among cross-tabs for those who answered these new questions, the results provide additional insight. For those who knew of someone who personally lost a job, 86.5% described job availability as "hard to find." Only 56% of those who did not know of a personal layoff said jobs were "hard to find."

65.5% of those who had personally identified with a layoff said state economic conditions were bad, while only 35% of those who did not have a personal connection to someone who lost a job said the state economy was bad.

45% of those who knew someone who lost a job predicted their personal financial situation would be worse in 6 months. Only 25% of those who did not know of a laid-off worker thought their personal finances would worsen in the future.

"The social psychological research is clear that abstract phenomena, like economic conditions, are personalized when folks have friends or family who’s lives are affected by it," said Dr. Jay Barth, professor of political science at Hendrix College, who helped construct and analyze the poll data.

"That’s why the knowledge of a friend or family member who’s lost their job is so powerful in shaping Arkansans’ perceptions of the economic health and future prospects. Whenever the unemployment rate goes up by a couple of tenths of a point, that’s not just changing the perceptions of the individuals who’ve lost jobs but any number of their friends and family. It brings abstract economic conditions home for them," Barth said.

FUTURE READING
A Q&A with Delta Trust & Bank CEO French Hill
How Outsourcing Responses have Impacted Arkansas Consumers
What Can You Be Optimistic About?

ADDITIONAL READING
Q2 Arkansas Consumer Confidence Report
Q1 Arkansas Consumer Confidence Report

POLL BACKGROUND
This poll was conducted by Talk Business and Hendrix College. The poll, which has a margin of error of +/- 4.5%, was completed using IVR survey technology on October 19-20, 2011 among 478 registered Arkansas voters statewide. All media outlets are welcome to reprint, reproduce, or rebroadcast information from this poll with proper attribution to Talk Business. For interviews, Brock can be reached by e-mail at [email protected]. Barth can be reached at [email protected].