Nearly Half of Americans Think the Recession Is Not Over

http://www.businessweek.com/articles/2014-08-19/the-psychological-damage-of-the-recession-is-not-going-away#r=hpt-ls

Some 76 percent don’t think their children’s generation will have a better life than they did. Americans are right to think they are worse off: Even if they have recovered financially, they have become aware that the economy is riskier than it used to be. They might never bounce back from that.

Economic well-being is not limited to wealth, earnings, and employment; security matters, too. All else being equal, a riskier environment is worse, economically speaking. Financial markets may be less volatile, but structural changes in the economy have increased risk for most Americans’ largest asset: future earnings.

Lifetime earning power has been getting less certain for decades, but it took the recession to make people realize it. In 2002, one out of two Americans expected real income gains in the next five years, according to the Index of Consumer Sentiment; by 2013, only one in three did. It is well known that real median earnings didn’t increase in the last 20 years; overall earnings have become more volatile, too. The amount that the average household’s earnings fluctuate each year has been increasing (PDF) since the 1980s. Household finances also are less secure because people have less liquid savings and more debt. The economic stress associated with the recession made these trends more apparent.