Americans Think the Economic Chalice is More than Half Full

As Americans we can be a skeptical crew about a whole lot of stuff. One thing we seem to feel good about is future opportunities. According to a recent Gallop Poll 28% think the economy is good, 28% think it is poor, 51% believe it is getting better and 45% feel that it is getting worse (1). For seven straight weeks the consumer economic beliefs have been in the positive providing good news to those who feel the economic chalice is over half full.

The numbers may depend on who you are, your income and education level, as well as your personal disposition in life. Those who are in fast growing industries who are finding their job prospects and income rising may feel more optimistic than those who are negatively affected by shifting economic activity. If your in the wrong occupation and see your prospects dwindling there isn't much to look forward to as a growing economy isn't going to directly benefit you.

The same can be said with those who have not either learned a skilled trade or obtained a meaningful degree with market relevance. Education must match market needs if it is to effectively support one's family and provide future opportunities. Failure to enter into an education and/or learning program will leave some in low wage and low movement occupations competing against outsourcing and automation.

We can't ignore that our personal disposition has something to do with how we interpret information. For example, if we are generally a positive person we are more likely to see positive movement in the economy while if we are more negative we are more likely to see the negative aspects of the economy. Many of us self-select the type of information we see in order to confirm our pre-existing beliefs.

Regardless of the many reasons why a person sees the cup as half full or half empty the movement from a negative perspective to a positive perspective does highlight that perceptions are slowly changing. We find through the past year people have been flat and in the negative ranks. As positive communication in the media and among social networks rose people also started to become aware of the growing economy. That could just push consumer spending upward next month that helps support the economy further creating a self-fulfilling prophecy.

Top American Concerns- Jobs, Economy, and Government

According to a recent Gallop Poll 20% of Americans are worried about jobs, 19% on how government functions, and 17% about the nature of the economy. Over the past year all three have switched places as main American concerns and appear to be somewhat tied in a race of sprints and walks with each coming out on top at one time or another.  Some are saying it is the economy and others are indicating it is the employment rate-all three numbers are likely associated.

Certainly there is no denying the connection between the employment rate and the strength of the economy. A strong economy is able to create jobs and keep people employed. Generally, as the economy improves so does opportunities for gainful employment. Employment rate is a major symptom of economic strength and can fluctuate as the economy shifts gears. 

However, the numbers released by Gallop indicate that the economy, employment, and perception of government are important to Americans. Research by Heinz Welsch found that life satisfaction is negatively associated with unemployment and positively associated with growth (2011). As the economic engine speeds up, so does the satisfaction of citizens and this is an obvious benefit to everyone.

Likewise, other research supports the concept that trust in local government is associated with overall satisfaction and often results in residence retention (Van Ryzin, et. al. 2004). The New York study helps highlight how governmental functioning impacts satisfaction and may run off into other areas such as employment numbers and economic strength. 

Over the recession employment growth has been based primarily in small business. Further research by Glaeser & Kerr (2010) helps us understand that many small businesses lead to greater job growth than a few large employers alone. Revitalizing small business can have a direct impact on economic growth and in turn the employment rate. The same can be said for cities and national economics.

What we may find through the Gallop study is that as the economy speeds up and more jobs are created that concerns of government effectiveness are likely to decline while citizen satisfaction rises. Of course there are no perfect solutions and there are many confounding variables that go into the development of a nation. Many of the variables are associated with each other in one way or another but do not have a one-to-one relationship.  Focusing on the economy and the employment numbers seem to improve perception of government effectiveness and therefore a proper place for discussion.

Glaeser, E. & Kerr, W. (2010). The secret to job growth: think small. Harvard Business Review, 88, (7/8). 

Riffkin, R. (May 19, 2014). Jobs, Government, and Economy Remain Top U.S. Problems. Gallup Politics. Retrieved May 20^th, 2014 from http://www.gallup.com/poll/169289/jobs-government-economy-remain-top-problems.aspx

Van Ryzin, G. et. al. (2004). Drivers and consequences of citizen satisfaction: an application of American customer satisfaction index model to New York City. Public Administration Review, 64 (3). 

Welsch, H. (2011). The magic triangle of macroeconomics: how do European countries score? Oxford Economic Papers, 63 (1).