Americans do not rate their personal finances any better –or worse – than they did when Barack Obama took office nearly four years ago. And while income is a major factor in people’s views of their personal finances, so too is their partisan affiliation.
The Pew Research Center has been tracking personal financial well-being for years. The trend since 2007 helps explain why the Obama and Romney campaigns talk about this issue in such different terms. On the one hand, Americans are clearly feeling more pinched than they were before the recession began. The Pew Research Center’s November 2007 survey found 50% saying they were in excellent or good shape financially. In June of this year, 41% rated their personal finances as excellent or good.
However, most of the decline in positive views occurred before Obama took office; there has been little change since then. Between November 2007 and December 2008 the share of Americans who said they were in good financial shape fell 12 points to just 38%, and has neither improved nor worsened substantially over the past three-and-a-half years.
Republicans consistently rate their personal finances more positively than do Democrats or independents, largely reflecting Republicans’ higher average income levels. But the gap has narrowed since the start of the recession in December 2007, as Republicans have come to view their financial situations less positively.
Before the recession in November 2007, 68% of Republicans said their personal financial situation was excellent or good, compared with 47% of independents and 38% of Democrats. In the June 2012 survey, 49% of Republicans rated their finances as excellent or good, compared with 38% of independents and 41% of Democrats.
Overall, people’s views of their financial situations have shown little change during Obama’s presidency, but there is no doubt that the recession has taken a heavy toll. A July survey by the Pew Research Center asked people if their household finances are in better shape or worse shape now than they were before the recession started in December 2007. A plurality of Americans (46%) said they are in worse shape now than they were before the recession started, while 31% said they are in better shape. Another 21% of respondents volunteered that their household’s financial situation is no different now than it was before the recession.
This retrospective evaluation is linked to partisanship. By more than two-to-one, Republicans said they are in worse (56%), not better (23%), shape financially than they were before the recession started in 2007. Democrats, by contrast were evenly split on this question: 39% said they are in worse financial shape now than they were in 2007 and 37% say they are in better shape. Roughly half of independents (48%) say they are in worse shape now, 30% say they are in better shape.
Not surprisingly, upper-income Americans are more likely than middle- and lower-income adults to say they are in better financial shape now than they were before the recession started. Among adults with annual household incomes of $100,000 or higher, 42% say they are in better shape now while 39% say they are in worse shape. Among those with lower incomes, only about three-in-ten say they are better off, while roughly half say they are worse off.
Republicans are more likely than Democrats to fall into that upper-income category. However, even among Republicans with annual incomes of $100,000 or higher, only 27% say they are in better shape now than they were five years ago (51% say they are in worse shape). Among Democrats in the highest income category, 52% say they are in better shape now.
Nonetheless, Americans remain, on balance, optimistic about their personal finances. Throughout this economically stressful period, half or more have said they expected their financial situation to improve in the year to come. In the June 2012 survey, 63% said they thought their financial situation would improve; that figure had fallen as low as 51% in April 2011, and stood at 54% shortly after Obama took office.
Democrats’ personal financial outlook soared around the time Obama took office, and has remained high in the years since. In the June survey, 72% of Democrats expected their finances to improve over the coming year, while just 13% thought things would get worse. Among Republicans, the outlook is more muted – while 56% were optimistic about their finances, 22% thought things would get worse. In September 2007, 69% of Republicans expected their finances to improve over the course of the following year.