Introduction and Summary
Psychologically, Americans have turned an important corner recently. They have become much less concerned about meeting major financial commitments, even though they say their material conditions have not dramatically improved. Heightened worries about affording health care, saving for retirement, or saving for a child’s college education have fallen off significantly in recent months. Yet satisfaction with wages and general financial well being are assessed only slightly better than a few years ago when economic anxiety was greater.
Until recently, the public has been unable to shake off the effects of the last recession, which in its mind lingered on long after economists declared it over. The steady drumbeat of reports of extensive corporate downsizing, compounded by worries that Washington reforms would increase health care costs or cut back Medicare, further fueled public concerns. Slowly, if not almost grudgingly, Americans acknowledged that their personal financial picture had improved. But at the same time they remained very worried about meeting major financial obligations.
Only now have anxieties about the future begun to diminish. The Pew Research Center’s latest nationwide survey finds Americans continuing to give their financial situations a mixed rating. Half the public (50%) says it is in excellent or good shape and as many (49%) see their situation as only fair or poor. This represents a small but significant increase from spring 1994 when the balance of evaluations were negative (46% to 53%). It is a much improved reading over January 1993 when negative ratings far outweighed positive ones (37% to 62%).
And with favorable news about low unemployment and low inflation taking the place of downsizing stories, Americans appear less frightened about their future. The current survey finds 20% point declines in the number of people “very concerned” on a variety of financial measures. It is important to underscore, however, that very large percentages of Americans continue to be at least somewhat concerned about such things as saving for retirement, health care costs and other major expenditures.
Furthermore, positive economic expectations may be easily reversible. While the percentage expecting to be better off next year is as high as it has been in the past five years (68%), only 12% expect a much improved situation. Similarly, a recent Gallup poll found mixed economic expectations — just as many respondents had positive economic attitudes as negative ones.1
The Pew Research Center survey also found little increased satisfaction with wages. A 54% majority of Americans continue to say they are not paid enough to lead the kind of life to which they aspire. As many as one in five workers (18%) have given up hope of ever earning an adequate salary.