These are some of the results of a Harris Poll of 2,335 U.S. adults conducted online between December 4 and 12, 2007 by Harris Interactive®.
These numbers have significant implications for the health of the economy in 2008. According to David Baron, Vice President of Research for the Harris Interactive Financial Services Group, “Having nearly one in five Americans feeling that their economic situation is going to get worse will have serious repercussions for the overall economy as well as the 2008 Presidential Elections. This is going to influence voting in the elections because Republicans feel much more positive toward the 2008 economic outlook than Democrats or Independents.”
In looking to the year ahead and what Americans expect to do in regards to their finances, just over two in five Americans (42%) say they plan to pay down their level of debt while 41 percent each say they will cut back on their household spending and save more in the year ahead. Additionally, one-quarter each say they will save more for retirement and get rid of one or more credit cards.
In looking at some different financial issues, one third of Americans (34%) are “extremely concerned” that “outsourcing” (i.e., jobs going overseas) will affect them personally. Outsourcing is of particular concern to Democrats (40%), as compared to Independents (35%) and Republicans (29%). A sizable number of Americans are also extremely concerned about “the sinking value of the dollar compared to other currencies such as the Euro or Canadian Dollar” (28%). It is interesting that Americans are slightly more likely to be extremely concerned with the declining value of the dollar than they are about inflation (25%) and rising interest rates (22%).
Perceptions about the Economy by Political Affiliation
Republicans are more likely to have positive feelings about the economy (30% feel more secure about their financial situation) compared to Democrats (14%) and Independents (18%). In fact, half of Democrats and Independents (52% each) feel that the economy is going to get worse in 2008. This is in contrast with Republicans where only a third (32%) feels the economy is going to get worse. In keeping with their negative economic outlook, more Democrats (44%) and Independents (45%) indicate they are going to “cut back on their household spending” than Republicans (36%).
Perceptions about the Economy by Generation
In looking at this by generation, those in the middle age ranges have the most concern on the economy. Gen. Xers (those ages 31 – 42) and Baby Boomers (those ages 43 – 61) are particularly worried about the economy as a plurality of both generations (40% and 44%, respectively) feel less secure about their financial situation this year. Only one-quarter (27%) of Echo Boomers (those ages 18-30) feel less secure, perhaps showing that they still have a safety net in the form of their parents. In addition, half of Gen. Xers and Baby Boomers (50% each) feel that the economy will get much worse in the coming year in contrast to Matures (41%) and Echo Boomers (38%).
Economic Outlook
The unsettled 2008 economic outlook will continue to have a negative impact on Americans saving for retirement. Only one-quarter (25%) of Americans indicate that they are going to “save more for retirement” this year. In addition, the mortgage crisis has made many weary about using their home as equity to finance loans. Only four percent of Americans indicate they plan to refinance their mortgage this year, and an even smaller number (2%) are planning on taking out a home equity line of credit.
So What?
As Americans head to the polls in both the primaries and the November general election, one thing that almost certainly will be on their minds is the state of the economy, not only in general terms, but also and probably more importantly, how it is impacting them personally and how they feel about the future. Their attitudes on these issues will have a large effect on how they vote. While Democrats tend to feel more pessimistic and Republicans more optimistic, or at least more secure, the decisive voters will be the Independents. Right now, they tend to align more with the Democrats. If that is still true in November, Election Night may not be a happy time for Republicans. But, ten months is a long time and as this economy goes up and down, a lot can still happen.
