Opinion, Berkeley Blogs

Why are whites so pessimistic about the future?

By Sandra Susan Smith

Americans’ collective mood has been souring. But it so happens that trends in outlook vary substantially by race and ethnicity and in seemingly paradoxical ways. According to a new report, AP-NORC_Public Mood White Malaise But Optimism Among Blacks and Hispanics, while whites are becoming more pessimistic, blacks and Hispanics have been relatively optimistic, and especially so since 2008.

Among blacks and Hispanics, the percentage who agree that “people like me and my family have a good chance of improving our standard of living” has ranged from 60% to 80% since 2004. In 2012, over 70% were so optimistic. Among whites, however, the percentage agreeing with this statement has declined sharply, from roughly 76% in 2000 to 46% in 2012, producing a 25-percentage point optimism gap between blacks and Hispanics on the one hand and whites on the other.

Furthermore, blacks and Hispanics are also now far more optimistic about the direction in which the country is going. Since Obama’s election, as much as 92% of blacks and 70% of Hispanics have expressed optimism about the country’s future. Among whites, however, post-Obama optimism about the future has never exceeded 42%.

These trends seem paradoxical, given that both before and after the Great Recession, whites have fared much better financially than either Hispanics or blacks. A recent Pew Research Center report on the rising wealth gap make clear racial differences in objective financial well-being. And indeed, when asked about their financial optimism, the report indicates, a much higher percentage of whites than blacks report satisfaction with their present financial situation.

But when asked if their financial situation has gotten better during the last few years, a different picture emerges. Between 1972 and 2002 a small but noteworthy and persistent gap of about 10 percentage points has existed between these two groups. By 2004, however, the gap had closed and has remained so. Convergence appears driven primarily by the fact that, since the late 1990s, the percentage of whites who perceive that their financial situation has gotten better has plummeted.

Why have whites become so pessimistic, relatively speaking? Some, like Matt Barreto, a political scientist at the University of Washington and co-founder of the opinion research group, Latino Decisions, offer a kind of relative assessment thesis. Specifically, on PBS's NewsHour, Barreto suggested that whites’ pessimism is born from their collective sense that in terms of socioeconomic status, they have reached an apex. Meanwhile, they perceive that other groups, like blacks and Hispanics, are quickly catching up.

But Barreto’s explanation only begs the question: What has changed such that whites perceive greater barriers to their own mobility? The report points vaguely to the economy, with particular note about the role of the Great Recession. This makes sense but is ultimately an unsatisfactory explanation because, while the Great Depression has almost certainly contributed to whites’ darkening mood, it is hardly the root cause of their malaise, which seems to have come into existence almost ten years earlier. As the report shows, the percentage of whites who agreed that their financial situation had been getting better began declining as early as 1998. Indeed, between 1998 and 2004, white enthusiasm declined from 47% to 39%, an eight percentage point drop. Since 2004, it has continued to decline and in 2012 stood at just 28%.

Whites’ waning optimism is associated less with any cyclical disturbances than with a fundamental change in the structure of economic opportunities for middle-class workers and the implications that these changes have for workers’ income stability and economic security. Employers’ desire to increase profitability primarily by lowering labor costs has led them to shift the risks and costs associated with employing workers to the workers themselves. For instance, according to a recent Census report, "Employer-Based Health Insurance-2010," between 1997 and 2010, the likelihood of receiving employment-based health insurance has declined from 64.4 percent to 56.5 percent.

Increasingly, workers can also no longer rely on employers to offer paid or unpaid sick leave, vacation, or a whole host of other benefits that were once part and parcel of the family wage package for middle-class workers. And the erosion of these benefits is making these workers, who are disproportionately white, feel a much greater sense of income instability and economic insecurity.

A similar shift began to alter opportunities for low-wage, low-skilled workers as early as the 1960s (some would argue even earlier), although evidence of its effects were not clearly evident until the late 1970s. Technological advances made many low-wage, low-skilled workers obsolete. And deindustrialization resulted in the loss of good jobs for relatively low-skilled workers. These good jobs were replaced by low-level service sector jobs that offered much lower pay, few or no benefits, and little job security, as employers changed the nature of their relationships with their employees to lower labor costs and achieve greater profitability. That era's fundamental shift in the structure of economic opportunities led to greater income instability and economic insecurity for workers with low levels of skills and education, workers who were disproportionately black and Hispanic.

The precariousness of work, then, which began with those at the lower end of the income spectrum is now spreading to workers with greater levels of education and training. This rendering is consistent with the thesis that Jacob Hacker puts forward in The Great Risk Shift. According to Hacker,

“Volatility is indeed higher for less educated Americans than for more educated Americans. (It is also higher for blacks and Hispanics than for whites, and for women than for men.) Yet, surprisingly, volatility has risen by roughly the same amount across all these groups over the last generation. During the 1980s, people with less formal education experienced a large rise in volatility, while those with more formal education saw a modest rise. As figure 1.3 shows, however, family income instability has steadily reached higher and higher up the educational ladder — first touching those who went to college but failed to receive a degree and then, by the early 2000s, spreading to college graduates and those even more highly educated. The story of the last few decades is the generalization of the income instability that once afflicted mostly the less educated and disadvantaged. Increasingly, more educated workers are riding the economic roller coaster once reserved for the working poor” (2006: 27-8).

Thus, we might think of low-skilled, lesser-educated workers of the 1970s through 1990s as canaries in the proverbial coal mine, foreshadowing the fundamental shifts in employer-employee relations for those in more stable employment relationships. Arguably, whites are now experiencing more fully the effects of these fundamental shifts, recently expanded to middle-class occupations and industries, that working class blacks and Latinos disproportionately experienced a generation before. That proportionately fewer whites perceive that their financial situation has gotten better since 1998 is probably less the result of their relative assessment vis-a-vis a perceived ascendant black and Latino population than an accurate reflection of the objective changes in their own circumstances. In other words, whites have good reason to be more pessimistic. Relative to where they were 15 years ago, they are losing ground.

In a future post I will consider the roots of Hispanic and black optimism.