June 30, 2010

How the Great Recession Has Changed Life in America

VI. Short-term Optimism; Long-Term Uncertainty

Next Year Will Be Better: More than six-in-ten (62%) adults say they expect their financial situation to improve in the coming year, compared with just 19% who say they expect it to get worse. That is the most upbeat reading on this measure since September 2007, just before the recession began. Among the most optimistic demographic groups are blacks (81% expect their finances to improve in the coming year), Hispanics (74%) and 18- to 29-year-olds (85%).

But Will Our Children Do Better?
During the past decade, Americans have grown increasingly skeptical about the standard of living of future generations—and this skepticism has deepened during this recession. Today fewer than half (45%) of adults believe that when their children become the age they are now, their children will enjoy a better standard of living than they have now. Even more striking, 26% now say their children’s standard of living will be lower. This is a “positive/negative” gap of just 19 percentage points on a question that tests the public’s faith in a core tenet of the American dream—the idea that children grow up to live better than their parents. At the start of the recession in early 2008, this gap was 35 percentage points. In 2002, it was 51 percentage points. Overall, blacks, Hispanics and young adults are more upbeat about the idea of generational progress than are whites and older adults.

Public Says Mix of Economic News Is Unchanged: About two-thirds of adults (65%) say that these days they are hearing a mix of good and bad news about the economy, while 30% say they are hearing mostly bad news and just 4% say they are hearing mostly good news. These shares have barely budged in the past year. However, back in December 2008, when the recession was about a year old, fully 80% of adults said they were hearing mostly bad news about the economy.

Recession Impact: Permanent or Temporary? Most Americans (70%) believe that the recession has inflicted major changes on the U.S. economy, but most (61%) say that these changes will prove to be temporary. Older adults are more downbeat than younger adults (21% of those ages 50 and older see major, permanent changes, compared with just 13% of those ages 18-24); college graduates are more pessimistic than whose with a high school diploma or less education (22% of the former see major, permanent change, compared with 14% of the latter); and Republicans are more pessimistic than Democrats (22% vs. 12%). When asked a similar battery of questions about the impact of the recession on the way they live their lives, a smaller share of respondents—just 8%—say they believe the changes will prove to be both major and permanent. An additional 12% say the changes will be minor and permanent.

Still the Land of Prosperity? By a two-to-one margin, 63% to 31%, Americans agree with the statement that “although there may be bad times every now and then, America will always continue to be prosperous and make economic progress.” Blacks, Hispanics, Democrats and young adults register the most optimistic views on this question. Also, those who self-identify with the middle class are more optimistic than those who classify themselves as upper or lower class.