NEW YORK — Optimism and America generally go together.
But lately, pessimism is gripping the nation. Fifty-seven percent of Americans say the country is doing poorly right now, according to the latest CNN/ORC poll. That’s a two-year high.
These days, Americans sound more and more like Eeyore and less like Winnie the Pooh. And they’re skeptical that life will get much better for their kids.
A CNNMoney/E*Trade survey this month found that 56% of Americans think the next generation will be worse off than them financially.
This deep unease about where America is now and where it’s headed, especially economically, helps explain why anti-establishment presidential candidates are doing so well.
“Most people I talk to think the economy is in recession,” Kate Warne, an investment strategist at Edward Jones, told CNNMoney at the end of last year. Actually, the U.S. economy likely grew at over 2% in 2015 (we’ll know for certain on Friday, when the data is released).
Republican presidential hopeful Donald Trump is campaigning on the slogan “Make American Great Again,” and Democrat Bernie Sanders frequently says he thinks the economy is rigged and the little guy can’t make it anymore.
Americans are still doing better than in the past
But is all this doom and gloom about the economy justified?
In short: Not really.
The nation’s jobless rate is now down at 5%, a very healthy level and one that most economists consider full employment. It’s half of what it was during the worst of the Great Recession. The past two years have seen the most job growth in the country since 1999.
On top of that, the U.S. economy is growing. It’s expanding at just over 2% a year. That means that America is getting wealthier and most people’s standard of living is going up.
Today’s kids are on track to be better off than their parents, at least if you judge “better off” by money and stuff.
“As long as you have any economic growth at all, most people will move up the ladder,” says Isabel Sawhill, a senior fellow at the Brookings Institution.
But today’s economy does have some profound differences from America’s boom days of the 1950s to 1990s — growth is slowing and inequality is rising.
In other words, life is still getting better for Americans, but it’s not improving as quickly as it used to, especially for the lower and middle classes.
But the middle class is having a tougher time
Economic growth averaged over 3% a year from 1969 to 2006. Now it’s averaging just over 2% a year.
And the middle and lower classes aren’t getting as much of the “economic pie” as they once did. In 1970, the rich (America’s top 5%) held 17% of the country’s wealth. Today that has shot up to 22%.
The typical middle class family doesn’t take home much more money now than it did in 1995, after you adjust for inflation. They are just keeping pace with rising costs (especially of health care and college) and not really getting ahead.
There’s also a growing problem that America’s jobs — especially the good jobs — are often located in big cities. But those cities are becoming unaffordable for the middle class. A “starter” apartment in New York City now runs about half a million dollars.
On top of the financial struggles, Americans “look at the political system and they say nobody in Washington is doing anything for us,” says Sawhill of the Brookings Institution.
All that put together makes it a little easier to understand the frustration of America’s middle class.
