For the past few years, the media has been saturated with dire economic headlines lamenting, among other horrors, the death of U.S. manufacturing, the nation's exploding unemployment, and our ever-growing deficit. Indeed, at times it has seemed like depressing news may be America's only actual growth industry.
That seemingly endless parade of dire warnings has had a definite impact: Perceptions of the the country's economic future have remained miserable, even when the economy has offered its occasional glimmers of hope.
Discussions of economic worries have often focused on the "Gen X" and "millennial" workers who are struggling to find a place in an ailing economy, often ignoring the opinions of older demographics like the "baby boomers" and "silent generation," who are, presumably, headed towards retirement. Recently, however, a new study has shown that depressed views of the economy afflict people across the age spectrum, from those at the beginning of their careers to retirees.
Last week, Ameriprise, a leading financial services company, released Money Across Generations II, a cross-generational survey of economic perceptions. A follow-up to 2007's Money Across Generations, the new study considers several common economic goals, looking at how highly respondents value these goals, and how likely they think their chances are of achieving them. In every particular, baby boomers, their children, and their parents have become less confident of their chances of achieving their goals.
Taking Care of Business
In 2007, when the first survey was conducted, perceptions were fairly positive. For example, 51% of baby boomers were "very confident" of their ability to assure "a financially secure life" for themselves and their children. Today, however, perceptions are quite a bit darker: only 33% of boomers are confident of their ability to guarantee their own financial security. And, among their millennial children, perceptions have plummeted even more sharply -- in 2007, 58% were very confident of their ability to assure their own financial security; today, 37% are.
Things have gotten even worse when it comes to taking economic responsibility for one's offspring. In 2007, 39% of baby boomers and 28% of silent generation grandparents were very confident that they would be able to "substantially" help their children and grandchildren to pay for their educations. Today, only 24% of boomers and 20% of silents are convinced that they can help their children and grandchildren. As for millennials, the number of them who expect to be able to help pay for their children's education has almost fallen by half, from 49% to 25%.
And when it comes for taking care of aging parents, perceptions are even more bleak. In 2007, 33% of boomers were very confident that they'd be able to assure a financially secure life for their parents. Today, only 19% feel that way. In that regard, things don't look good for the boomers, either: In 2007, 29% of millennials were confident they'd be able to financially take care of their parents. Today, only 21% are.
The Future's So Dim
While the general erosion in economic confidence is disturbing, an even more insidious development may be the way in which respondents have reshaped their goals. In 2007, a large number of respondents were dedicated to what could be described as selfless goals, like taking care of one's parents or paying for a child's education. Between 2007 and 2011, however, the number of millennials who prioritized helping their children to pay for their educations fell by 17% and the number who prioritized preserving wealth to leave to their children dropped by 41%. In fact, the only millennial priority that had significant growth was "assuring a financially secure life for yourself/your family." The number of millennials who put it at the top of their list increased by 25%.
And the millennials are not the only ones who have scaled down their goals. While the number of boomers who prioritize "supporting a charity or cause" doubled from 1% to 2%, the biggest growth by far was among those who were concerned with assuring their own financial security. Meanwhile, among silent generation grandparents, most priorities remained steady or decreased, with the exception of assuring that they had enough money to continue their lifestyle after retirement. In that priority, respondents increased by 15%.
Recently, there have been strong signs of an economic recovery: Unemployment is falling, housing starts are up, and consumers are buying things again. But if Ameriprise's survey is any indication, the hardest problem to shake may not be financial, but rather emotional. For a generation whose economic experience has been defined by the biggest financial crisis in more than 70 years, the biggest thing to fear may, indeed, be fear itself.
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at firstname.lastname@example.org, or follow him on Twitter at@bruce1971.
Widespread Debt: This Is Only The Beginning.
What Boomers, Millennials, Elderly All Have in Common: Money Fears
With a national debt still hovering around 120% of its GDP, Greece is still far from being out of the fiscal woods. As austerity measures bite, Greece's GDP will shrink further and its debt-to-GDP ratio will rise, putting it on course for further defaults -- er, "restructurings." Nor is Greece alone. According to official figures, debt-to-GDP ratios elsewhere are similarly high.
Photo: Gerasimos, an 83-year-old Greek man, picks through a heap of rubbish to salvage useful items as the marble gate of the Roman Agora is reflected in a mirror, in the Plaka district of Athens on Monday, March 12, 2012. Greece implemented the biggest debt writedown in history on Monday, swapping the bulk of its privately-held bonds with new ones worth less than half their original value. (AP Photo/Petros Giannakouris)
Debt-to-GDP ratio: 130%
Photo: President of Iceland Ólafur Ragnar Grímsson prior to voting in a referendum in Reykjavik, Iceland, Saturday, March 6, 2010. Icelanders voted "no" in a nationwide referendum on approving the use of $5.3 billion of taxpayers' money to repay international debts. The "no" vote may complicate Iceland's effort to recover from a deep recession and a banking collapse. (AP Photo/Brynjar Gauti)
Debt-to-GDP ratio: 120%
Photo: A man reads a newspaper in Milan, Italy, Monday, Jan. 30, 2012. European leaders are trying to come up with ways to boost economic growth and jobs, which are being squeezed by their own governments' steep budget cuts across the continent. The 27 EU leaders meeting in Brussels are also looking for common ground on a new treaty to toughen spending rules to dig the continent out of a crippling debt crisis. (AP Photo/Luca Bruno)
Debt-to-GDP ratio: 110%
Photo: Workers seen at the Luis Onofreâ luxury shoe factory in Oliveira de Azemeis, Portugal, Friday, Feb. 24, 2012. Debt burdens are rising fastest in European countries that have enacted the most draconian austerity programs. Portugal's unemployment rate hit a record 14 percent at the end of last year and the government imposed austerity measures to slash costs: Portugal cut pensions, reduced public servants' wages and raised taxes starting in 2010. (AP Photo/Paulo Duarte)
Debt-to-GDP ratio: 105%
Photo: People walk past a beggar on a bridge in Dublin Monday Feb. 20, 2012. Bank of Ireland, the only one of Ireland's six banks to avoid nationalization, reported it returned to net profit in 2011 thanks to heavy debt restructuring in the face of continued losses from dud loans. (AP Photo/Shawn Pogatchnik)
Debt-to-GDP ratio: 102%
Photo: The shadow of Republican presidential candidate, former Massachusetts Gov. Mitt Romney, is seen on a representation of the National Debt Clock as he spoke at a town hall meeting in Kalamazoo, Mich., Friday, Feb. 24, 2012. (AP Photo/Gerald Herbert)
Debt-to-GDP ratio: 85% each
Photo: Reflected in a window, people walk in London's City financial district, Tuesday, Feb. 14, 2012. Britain's AAA credit rating was put on a "negative outlook" by ratings agency Moody's, amid fears over weaker growth prospects and potential shocks from the eurozone crisis. Britain's Chancellor George Osborne said the assessment was a vindication of the Government's tough austerity measures and "a reality check for anyone who thinks Britain can duck confronting its debts". Moody's downgraded the ratings of six countries and also put France and Austria on the same caution as the UK amid violent protests in Greece. (AP Photo/Lefteris Pitarakis)
Debt-to-GDP ratio: 82%
It makes you wonder: Who will be next in line to default? And when they do, will we call that "good news," too?
Photo: A pedestrian looks at a sign in a shop reading: ''One euro, price haircut'' in Athens on Thursday, March 8, 2012. (AP Photo/Thanassis Stavrakis)