Sunday, August 29, 2010

Are Americans pessimistic about the prospects for the next generation?

Gary Becker has recently written an interesting article on the Becker-Posner blog about polls suggesting that the majority of parents in the United States are not confident that their children will be better off economically than they are. He suggests that the best way to counter such pessimism is to promote faster economic growth.


The article made me feel slightly uneasy because I wrote something a few months ago suggesting that the poll results actually conflict with the view that Americans are pessimistic about the future for their children. Have I mis-read the poll results? How much have the poll results changed over the last year or so?

Scott Winship has recently considered the evidence of a variety of polls on his blog: here and here. In brief, the polls indicate that the proportion of Americans who think that their children will have better standards of living than themselves consistently exceeds the proportion who think their children will have worse standards of living. The margin tends to narrow during recessions but, even this year, the polls suggest that optimism is no lower than in the mid-1990s (see Pew Research Center poll results here).

Rather than trying to explain why Americans have become more pessimistic perhaps researchers should be trying to explain why Americans are still so optimistic.

9 comments:

magsx2 said...

Hi Winton,
I really feel sorry for the people in America, I have read so much lately on all the problems that they are having over there.
I was only reading the other day, where every month there are more and more people losing their jobs, people every month losing their homes, these were people that had good jobs, and then find themselves in this mess, through no fault of their own.


America is in so much debt now, they are saying that the Government is starting to print money, and the economists are concerned about hyperinflation. You cannot blame people for worrying about what the future holds for their children. It really is a worry.

I was reading an article in July about the banks now starting to abandon the US dollar. If you would like a read here is the link:-
http://wallstreet.blogs.fortune.cnn.com/2010/07/09/central-banks-start-to-abandon-the-u-s-dollar/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+rss/money_topstories+Top+Stories

Lorraine said...

Speaking as a 'Generation X' American (born 1965) I'm inclined to believe that (1) my generation's coming-of-age years occurred during that ratcheting-down of working class expectations called Reaganomics, (2) future generations can expect further ratcheting down of expectations and (3) the high point of American civilization was what was called the 'post-war period,' maybe 1946-1979. Some put its definitive end as early as 1973 (OPEC embargo). I'll go along with that, but human resources made a strong campaign of working with rather than against the trends circa 1980; what Jacob Hacker has termed the Risk Shift.

Whether the American standard of living is rising or falling, it should be undisputed that the structural trend is for Americans of modest means to be expected to eat more and more of the risk inherent in enterprise. All of the trends in human resources practice point in this direction, be it the trend from union to non-union workplaces, gainful (permanent, full-time) to 'contingent' employment, employee status to 'independent contractor' status, fee-per-service to HMO in health benefits, and defined benefit to defined contribution in retiree benefits. I would say that whatever gains (if any) have been made in median income have been more than offset by the losses in economic security. Even if it's true that risk was systematically underpriced by employers and insurers (perhaps due to incompetence or lack of 20-20 hindsight) during the postwar period, that underpricing enhanced quality of life in very tangible ways.

I think at least the next two or so generations are facing a continuation of this trend. For them, debt-financing of education, unpaid internships, attrition hiring, and self-employment by default are being added to the expectations placed on individuals generally.

There are of course many very important ways in which the present is much better than postwar America, which was far more racist and sexist. It was also more bureaucratic and conformist, but in these areas I think the present-day trend toward a surveillance state, and more significantly, a surveillance workplace, more than cancels out the relative cultural freedom, which in practice has more to do with expression than with substantive rebellion.

I don't expect a reversal of the Risk Shift trend until the painful market correction between global-north and global-south wage expectations has run its course to equilibrium. I think the odds are against this particular elephant being swallowed and digested during my lifetime. The only hope for a mercifully quick (though possibly more traumatic) resolution of these structural inequities is to 'liberalize' human migration with as much ideological ram-rodding as has been applied to the 'liberalization' of trade and of capital flows. The necessary adjustment of global-north consumption norms to the reality of global warming should also help, as will the projection that we will probably clear the population hump (though at a staggering 9 billion) by about mid-century.

Lorraine said...

This topic tends to open the floodgates, hence:

Request-URI Too Large
The requested URL /comment.g... is too large to process.


So I made my monster comment into an entry on my own blog.

Winton Bates said...

Hi Mags
I agree that the U.S. has some big problems.
Yet American are not all that pessimistic about prospects for the next generation.
Perhaps their optimism just reflects American attitudes. The glass is half full rather than half empty. But I don't have any hard evidence to back up the idea that this is an American characteristic.
Alternatively, they may have good reasons for their optimism. I will elaborate below in my response to Lorraine.

Winton Bates said...

Hi Lorraine
The points you make would lead me to expect that Americans might be more pssimistic about the future than in the mid-1990s. Yet the data doesn't seem to show this.

One of the things that would make me fairly optimistic about the future if I lived in the U.S. is the fact that politics and business are still contestable. If this government doesn't fix the economy they will be turfed out of office. If a business doesn't compete in the product market or the labor market it tends to go out of business and to be replaced(except perhaps for banks and car makers). There still seems to be a lot of opportunities for upward mobility, despite apparent widening of income disparities.

Lorraine said...

I'm sure you are right re. American public opinion. I'm well aware that I'm 'out of touch' or 'out of tune' (as the American main$tream media like to say) with American public opinion.

Locksmith in White Plain NY said...

you are absolutely right,, you are thinking good about Americans opinions..
keep it up..
Thank you for the post..

Julia said...

Optimism isn't the answer to America's descent to pessimism, the American dream is in the blur these days. Let's not hope for a better future but rather work on it.

Winton Bates said...

Yes Julia, we all need to work for a better future. But where is the evidence of America's descent to pessimism?