Optimism in an Era of Growing Inequality and Economic Difficulty

May 21, 2013

The Great Recession of 2007-2009 has profoundly affected the American people. Personal economic stress levels are high, and insecurity about jobs, housing, education and retirement is up among nearly all segments of the public, with many families reorganizing their lives to adjust for declining wealth and real income, as well as poor job prospects. At the national level, Americans are expressing record levels of frustration with what they see as a dysfunctional political system in Washington. Yet despite the American people's struggles with this extended period of economic difficulty, their core values and beliefs about economic opportunity, and the nation's economic outlook, remain largely optimistic, say Pew pollsters Andrew Kohut and Michael Dimock in a new report for the Council on Foreign Relations.

By modern historical standards, these have been tough times for the American public.

  • Though the United States enjoyed rising prosperity each decade after World War II, that stretch of economic growth came to an end in 2000.
  • Median household income was lower in the past decade than in the 1990s, and the net worth of the average family declined by 35 percent over the same period.

The American public has noticed this change.

  • During the past five years, an average of less than 40 percent of people rated their finances as excellent or good, compared to 48 percent earlier in the decade and in the mid-to-late 1990s.
  • However, in a display of characteristic optimism over this difficult period, nearly six in 10 Americans expected their finances to improve in the coming year.
  • Despite a prolonged recession, levels of optimism about better times one year ahead are comparable to what they have been over the past two decades.

This resilience suggests that while economists may debate whether the fundamentals of the American economy are in decline, the public's mood, so far, can be better interpreted as that of retrenchment, not defeat.

There is also little evidence that economic class is becoming a greater factor in shaping American values than in the past. Americans are certain that the nation can solve its problems, that hard work ultimately pays off, and that income divides are an acceptable part of a healthy economy. But they increasingly see a lack of fairness in public policies that are failing to promote economic opportunity.

Source: Andrew Kohut and Michael Dimock, "Resilient American Values: Optimism in an Era of Growing Inequality and Economic Difficulty," Council on Foreign Relations, May 2013.

 

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