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.