Federal Judiciary

The Optimism Gap

Discussions of race in modern America often focus on gaps between blacks and whites -- the income gap, the education gap, the marriage gap, the incarceration gap. Recent polling suggests the emergence of a new gap: an optimism gap. One group is decidedly more upbeat about both the current state of the U.S. economy and the likelihood of future prosperity. But it's not the group you might expect.

#ad#In May, the Pew Research Center conducted an exhaustive survey to gauge the impact of the Great Recession. That same month, according to the Bureau of Labor Statistics (BLS), the seasonally adjusted unemployment rate among blacks stood at 15.5 percent -- 17.1 percent among black men aged 20 and over -- while the rate among whites was 8.8 percent. Not surprisingly, a much larger proportion of blacks than whites told Pew that the economic slump had forced them to accept reduced work hours, to take unpaid leave, or to switch from full-time to part-time employment. (A technical note: All of the Pew data in this article refer to non-Hispanic blacks and whites; the BLS figures, by contrast, include blacks and whites of Hispanic ancestry.)

Blacks were also 'more likely than whites to have had trouble getting or paying for medical care, borrowed money from a family member or friend, or had problems paying their rent or mortgage.' Thirty-five percent of black homeowners reported having an 'underwater' mortgage (i.e., a mortgage whose outstanding debt is worth more than the present value of the house), compared with only 18 percent of white homeowners.

Given those disparities, one might reasonably have predicted that blacks would be more pessimistic than whites about America's economic prospects. In fact, the opposite was true. Despite the yawning racial employment gap, blacks were nearly twice as likely as whites to call U.S. economic conditions 'excellent' or 'good' (25 percent to 13 percent). They were also significantly less likely than whites to say that the American economy was still in recession (45 percent to 57 percent), and significantly more likely than whites to say that their personal financial situation would improve over the coming year (81 percent to 57 percent).

Even though the seasonally adjusted black unemployment rate climbed from 9 percent in December 2007, when the Great Recession began, to 15.5 percent in May 2010, roughly a third (32 percent) of blacks told Pew that their household finances were in better shape than they had been prior to the recession. Only 18 percent of whites gave that response. Between early 2008 and May 2010, the proportion of blacks identifying as members of the upper class increased from 15 percent to 20 percent. Meanwhile, the overall share of Americans in that category declined slightly, from 21 percent to 20 percent, and the segment identifying as members of the lower class swelled from 25 percent to 29 percent. 'There are now no significant gaps between black and white Americans in terms of how they identify their social class,' Pew noted. Looking ahead, blacks were far more likely than whites (81 percent to 59 percent) to agree with the statement that 'although there may be bad times every now and then, America will always continue to be prosperous and make economic progress.'

To a certain extent, the black-white optimism gap reflected a partisan divide, and vice versa, since blacks are overwhelmingly Democratic voters. Democrats were more likely than Republicans to characterize U.S. economic conditions as 'excellent' or 'good' (17 percent to 11 percent), to say their financial situation would improve over the next year (70 percent to 55 percent), or to agree that America would always remain prosperous (75 percent to 57 percent). They were less likely than Republicans to describe the state of the economy as 'poor' (30 percent to 48 percent), to say that the recession was ongoing (43 percent to 63 percent), or to say that it had caused 'major' and 'permanent' changes in the U.S. economy (12 percent to 22 percent).

The partisan gap was reinforced by Hispanics, who voiced greater economic optimism than whites, and also by younger adults, who were generally more positive than older adults. Both of these groups (Hispanics and younger adults) have experienced a particularly steep jump in unemployment since late 2007, but both are also Democratic-leaning constituencies. Indeed, while Republicans were more likely than Democrats to report losing value on their house, Democrats 'have lower incomes and less wealth and have suffered more job losses during the recession.' Yet Democrats were more confident than Republicans about the recovery, and about the future of American affluence, 'regardless of their income, education, [or] gender,' or other factors, such as ability to make mortgage, rent, or health-care payments.

How do we account for this?

#page#'One likely explanation,' Pew suggested, 'is that in an age of highly polarized politics, Democrats and Republicans differ not only in their values, attitudes, and policy positions, but, increasingly, in their basic perceptions of reality.'

This phenomenon was apparent during the Bush years, when it was Republicans who were more bullish on the economy. In a 2004 Pew poll, only 12 percent of liberal Democrats characterized economic conditions as 'excellent' or 'good,' compared with 62 percent of conservative Republicans. In a 2006 poll, Republicans with household incomes below $50,000 were nearly three times as likely as Democrats in the same income group to say that economic conditions were 'excellent' or 'good' (48 percent to 17 percent). Similarly, 65 percent of Republicans with household incomes of $75,000 and above gave the economy an 'excellent' or 'good' rating, compared with only 31 percent of Democrats in that income group.

#ad#There's no question that political affiliation now exerts a strong influence on how many Americans view the national economy. But partisanship alone cannot fully explain the current optimism of blacks. We must also consider the Obama Effect.

In a survey conducted last fall, Pew found that 'blacks' assessments about the state of black progress in America have improved more dramatically during the past two years than at any time in the past quarter century.' Between 2007 and 2009, the share of blacks saying that 'the situation of black people in this country' had gotten better over the previous five years rose from 20 percent to 39 percent, and the proportion saying that life would be even better for blacks in the future increased from 44 percent to 53 percent. In addition, 56 percent of blacks said that the gap between black and white living standards had narrowed over the last decade, compared with 41 percent who said so in 2007. (This was especially striking because, according to a Pew analysis, the black-white median-household-income gap actually expanded by three percentage points between 2000 and 2008.)

'Barack Obama's election as the nation's first black president appears to be the spur for this sharp rise in optimism among African Americans,' Pew concluded. The Obama Effect is also visible in Gallup's Standard of Living Index, which measures (1) how Americans rate their standard of living and (2) whether they believe it is getting better or worse. Black scores in the index 'continue to exceed those for whites,' Gallup reported in July, 'a pattern that has persisted since early 2009.' Indeed, 'blacks began to be more optimistic around the same time that Barack Obama was inaugurated as president.'

As November 2008 recedes further into history, and as Obama's political troubles metastasize, it is easy to forget or underestimate the psychological impact that his election had on black Americans. The Obama Effect has helped fuel a remarkable spike in black confidence at a time of severe economic adversity. The official black-white unemployment gap is staggering -- it was 7 percentage points (15.6 percent to 8.6 percent), in seasonally adjusted terms, as of July -- but so is the black-white optimism gap. Whether (or how long) the latter gap will persist remains to be seen.

—  Duncan Currie is deputy managing editor of National Review Online.

Full post as published by Bench Memos - National Review Online on September 01, 2010 (boomark / email).