Parents Are Losing Faith in the American Dream
Life + Money

Parents Are Losing Faith in the American Dream

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In the wake of the Great Recession, Americans are increasingly pessimistic about their own finances and their children’s prospects for economic advancement. And while most believe the government should continue to promote upward mobility, there is broad agreement that it is doing it badly.

While respondents generally remained optimistic about the future, parents have grown more pessimistic about their children’s ability to live the American Dream. The percentage of respondents who believe their kids will have a higher standard of living than they now enjoy has plummeted to 47 percent from 62 percent in 2009.

Only 32 percent of Americans say they’re in ‘excellent’ or ‘good,’ financial shape, down nine points from one year ago and 23 points since the recession started in 2007, according to a new Pew Charitable Trusts Economic Mobility Poll. Slightly more than half (56 percent) said they are better off financially than their parents were at their age, the lowest percentage since the question was first asked in 1981. Eighty-five percent of the 2,000 individuals surveyed said that financial stability is more important to them than moving up higher on the income ladder.

An overwhelming majority (83 percent) of Americans say the government should play a role in helping the poor and middle class improve their economic situations. The sentiment cuts across party lines, with 91 percent of Democrats, 84 percent of independents and 73 percent of Republicans agreeing. “Americans are looking to policymakers to support their efforts to get ahead,” said Erin Currier, project manager for Pew’s Economic Mobility Project in a statement.

Yet 80 percent of respondents say the government’s current role is ineffective, although there is no consensus about whether the government is pursuing the wrong policies, or simply doing an ineffective job of pursuing the correct policies. A slight majority (54 percent) said that when the government intervenes, it generally helps “the wrong people.”  The same number think the government helps the rich a “great deal,” while far fewer say the government does a great deal for the poor (16 percent) or the middle class (7 percent).

Americans say the government’s top five goals to help consumers move ahead should be: ensuring a quality education (88 percent), promoting job creation (83 percent), ensuring equal opportunity (79 percent), allowing people to keep more of their money (78 percent) and providing basic needs to the poor (75 percent).

There are some signs that Americans believe the economic outlook is improving, albeit slowly. The number of Americans rating the national economy as poor is down to 55 percent from 73 percent two years ago. Despite fears about their children’s future, 68 percent say the have or will achieve the American Dream. Fifty-four percent believe they will be better off 10 years from now.

A separate report by CredAbility, a nonprofit credit counseling and education agency, found that the outlook for the average U.S. household is starting to brighten after 10 consecutive quarters of financial distress.  The CredAbility Consumer Distress Index is a quarterly measure that tracks the financial condition of the average U.S. household based on five categories: employment, housing, credit, household budgets and net worth. A score below 70 indicates a state of financial distress. Households scored 68.15 (out of 100) in the first quarter.

Related Links:
Survey: American Dream Lives on, But Money is Tight (CNN)
Poll: Americans Want Government to Push Economic Mobility (Wall Street Journal)