July 15, 2009

The Internet and the Recession

69% of all Americans have used the internet in the past year for help in coping with the recession and understanding it.

More than two-thirds of Americans – 69% – have used the internet to help them with personal economic issues that have arisen in the recession and to gather information about the origins and solutions to national economic problems. That amounts to 88% of the adult internet users in the country.

The internet ranks high among sources of information and advice that people are seeking during hard times, especially when it comes to their personal finances and economic circumstances. At the same time, broadcast media outpace the internet as sources of news about national economics and broadcast sources still overshadow the internet among all Americans for information and advice related to their personal financial circumstances.

General economy info sources

Personal finances info sources

For most of those interested in learning about personal and global finances, though, the quest for understanding and meaning is not an “either/or” matter. People do not either talk to others or consult a single media platform. They forage among sources and communicate with a range of people.

The average American is using two-to-three sources of information to make sense of what is happening and plan personal coping strategies. The process is best understood as networked individuals interacting with networked information. They talk to people, seek updates from media sources like newspapers and broadcast media, and actively search for insights that will help them explain what has happened to the economy and how they might adjust to those changes. Sometimes, they also launch an online conversation or otherwise pitch their ideas into the debate.

Still, the quest for information and advice online is not very intense for most Americans. About a fifth of online adults (18%) say they search at least once a day for recession-related material. About half of internet users say they get such material every few days or less frequently than that.

52% of Americans have been hard hit by economic troubles.

Many of the most active searchers and communicators are those who have been stung badly by the recession. Some 52% of Americans have been hard hit in at least one of these ways:

  • 35% of Americans have seen their investments lose more than half their value.
  • 27% of those who are employed full time or part time have had their pay cut, their hours reduced or lost benefits.
  • 27% of homeowners have seen the value of their home reduced by at least half.
  • 14% of Americans have been laid off or lost their jobs in the recession.

Bargains and job-related searches lead the way among the kinds of information “online economic users” have sought.

Much of this report deals with a subpopulation we call “online economic users.” They are the 69% of all Americans (and 88% of internet users) who have used the internet for recession-related purposes. Here are the main activities of online economic users in the past year – and in most cases, the hard-hit significantly outpace those who have avoided major economic problems in the past year:

  • Price comparisons: 67% of online economic users have used the internet to find the lowest price available for something they need to buy.
  • New jobs: 41% of online economic users have sought information in the past year about jobs that might be available.
  • Seeking online coupons for savings: 40% of online economic users searched on the internet for cost-saving coupons.
  • Help in spending less on everyday items: 27% of online economic users have used the internet to get material on the cost of everyday purchases.
  • Earning more money and second jobs: 27% of online economic users have been online hunting for tips about ways to earn more money or exploring the prospects for getting a second job.
  • Advice about protecting personal finances: 25% of online economic users have gone online seeking information about ways to protect their finances in a difficult economy.
  • Improving skills for a better job: 25% of online economic users have used the internet to seek material about how to improve their skills to qualify for better jobs.
  • Sell personal items online: 23% of online economic users have used auction sites or classified ad sites to sell personal items to raise money.
  • Unemployment benefits: 22% of online economic users sought material online about unemployment and other government benefits.
  • The value of my house: 18% of online economic users have used the internet to check up on the value of their house.
  • Rankings or reviews of financial companies and professionals: 17% of online economic users went online to check reviews of financial firms and professionals.
  • Information about getting a loan: 13% of online economic users went online to check out ways to get loans.
  • Filing for bankruptcy: 3% of online economic users used the internet to look for information about filing for bankruptcy.

The impact of the internet on people’s views and strategies for coping with the recession.

Most online Americans say their internet use had not changed much and the things they did online did not have tremendous influence on their beliefs and actions.

Still, a sizeable portion of online economic users – the 69% of Americans who have gone online for economic-related purposes during the recession – have reported changes in their views and their actions:

        More worried, less confident: Asked whether the things they have learned online have made them more confident or more worried about certain things, more said they were made more anxious than the opposite:

  • 39% of online economic users said they were more worried about the stability of banks by what they read online, compared with 5% who said they were more confident.
  • 37% of online economic users said they were more worried about the nation’s economic future by what they read online, compared with 10% who said they were more confident.
  • 36% of online economic users said they were more worried about their family’s future by what they read online, compared with 6% who said they were more confident.

On a personal level, though, online economic users were not dejected after their online searches about their own ability to make good decisions about their finances and career. Some 17% said they were more confident about their ability after their internet searches and 14% said they were more worried.

        Improved understanding: 36% of online economic users say the things they have learned online have improved their understanding of the nation’s financial crisis, compared with 11% who say they are now more confused because of what they have encountered online.

        Going online more often: 31% of online economic users say they have been using the internet more often to get information about the economy in the past year; 10% of online economic users say they are going online less.

        Going on alert: 13% of online economic users have signed up to receive updates about general economic news or personal financial issues.

34% of online economic users have contributed their own reactions and ideas about the recession on the internet. Their contributions include activities on social network sites and Twitter.

Some 34% of online economic users – about 30% of the online population and 23% of the entire adult population — have contributed content and commentary about the recession online. We calculate the 34% figure by adding up all the online economic users who said “yes” they had done any of the following things:

  • 12% of online economic users say they have tagged or categorized content about the nation’s economic problems.
  • 11% of online economic users have shared photo, video, or audio files about economic issues on the internet.
  • 9% of online economic users have posted comments about economic issues on any kind of website such as a financial or news site.
  • 8% of online economic users have used social network sites such as Facebook to contact others about job possibilities. That amounts to 17% of online economic users who use social network sites.
  • 8% of online economic users have contributed their comments about financial matters to online discussions, listservs or other online discussion forums.
  • 7% of online economic users have contributed comments about the nation’s financial matters on a social network site such as Facebook. That amounts to 15% of the online economic users who use social network sites.
  • 7% of online economic users have used social network sites such as Facebook to discuss the possibility that they or someone they know might lose their job. That amounts to 15% of the online economic users who use social network sites.
  • 6% of online economic users have contributed such comments on a blog.
  • 5% of online economic users have shared their own stories about their financial experiences on social network sites such as Facebook. That amounts to 9% of online economic users who use social networking sites.
  • 2% of online economic users have posted comments about the nation’s economic matters using a micro-blogging service such as Twitter. That amounts to 15% of all Twitter users who are also online economic users.
  • 2% of online economic users have started or joined a finance-related group on a social network site such as Facebook. That amounts to 4% of all the online economic users who use social network sites.