U.S. households are more bullish about their personal finances than they’ve been since 2009, according to a survey released Sept. 29 by Absolute Strategy Research. But a striking number of Americans are skeptical the “American Dream” is alive and well and that the next generation will be substantially better off than their parents.
According to the survey, 40 percent of U.S. households think the standard of living for their children will be worse than it is now. Just 24 percent expect living standards for the next generation to improve.
Meanwhile, 45 percent predict that advancements in science and technology will shrink the number of opportunities available to tomorrow’s workers. Just over a quarter (28 percent) say they’re more optimistic and expect technological advances to create more opportunities for the next generation rather than diminish them.
Overall, U.S. households are more optimistic today than they were immediately following the recession, but many remain stubbornly convinced that the so-called American Dream — promising Americans that they can climb the economic ladder through persistence and hard work — is increasingly “out of reach.”
According to a June 2014 poll commissioned by CNN Money, 63 percent of respondents think most kids today will be “worse off” than their parents.
In an interview with CNN Money, Erin Currier, director of the Economic Mobility Project at Pew Charitable Trust, said the economy’s lackluster recovery — which has dragged on for more than half a decade — is largely to blame for Americans’ distrust of the economy’s future. “The pessimism is reflective of the financial realities a lot of families are facing,” said Currier. “They are treading water, but their income is not translating into solid financial security.”
Limited mobility for some
The good news is that these negative perceptions aren’t completely accurate. According to a January 2014 study by Harvard’s Equality of Opportunity Project, today’s 20-somethings aren’t any less likely to climb the economic ladder than 20-somethings from two decades ago. “Children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s,” writes Raj Chetty, Emmanuel Saez, Nathaniel Hendren, Nicholas Turner and Patrick Kline in the report.
The bad news is that the “American Dream” is still exceptionally tough to reach — particularly in areas such as the Southeast, where economic status is more firmly entrenched. “The key issue is not that prospects for upward mobility are declining,” write Chetty et. al, “but rather that some regions of the U.S. persistently offer less mobility than most other developed countries.”
In other words: Kids today aren’t that much worse off than kids were two decades ago. But that’s partially because economic mobility in the U.S. has been limited for some time.