If you Google "economic uncertainty" you will find many references to its impacts on the economy and business. But you won't find much on its impact on people and society.
We find this interesting because we think in addition to having a big impact on the economy and businesses, economic uncertainty is a major driver of societal change.
Several articles this week provide some insight on some of these changes:
1. The New York Times article The New Instability focuses on declining marriage rates, especially among those with lower incomes. This is a topic we've written about quite a bit in the past, but this article does an excellent job of linking this trend to economic uncertainty.
The key quote is on how even the affluent are being impacted by economic uncertainty, something we've consistently seen in our research:
When the sociologist Marianne Cooper interviewed affluent Silicon Valley couples for her new book, “Cut Adrift: Families in Insecure Times,” she was struck by the anxiety they expressed about their retirement prospects, and especially about how to provide their children with the skills, résumés and entrepreneurial personality traits they believe are now needed to succeed in a “winner-take-all” job market.
2. Another recent New York Times article, If Marriage Moves Beyond Our Means, reviews the book Marriage Markets. This book focuses on how marriage rates vary by income, a topic also covered in two interesting book we've reviewed - Is Marriage for White People and Coming Apart.
But the review also covers the growing role economic uncertainty is playing in this trend. Key quote:
Marriage, the time-honored way of fostering the interests of children, no longer works for many Americans. In an economy ruptured by increasing inequality, millions of men and women are deciding that marriage imposes obligations that they cannot meet.
Last year, the nation’s fertility rate hit a historic low — 62.9 births per 1,000 women ages 15 to 44, according to the Centers for Disease Control and Prevention. Some of that decline comes from a long-term shift toward smaller families. But finances also play a pivotal role. A Gallup poll last year found the main reason Americans were delaying parenthood was worries about money and the economy — even as the stock market rallied and broad indicators pointed to a brighter future, highlighting a disconnect felt by many Americans.
Economic uncertainty and volatility are clearly changing behavioral patterns. And it's not just people with low incomes that are being impacted.
According to a recent survey close to 60% of men over the age of 50 with incomes of $75,000 or higher reported not feeling confident they will be able to maintain their current lifestyle in retirement. Even more women, close to 70%, report not feeling confident.
I'm often asked why we follow marriage and birth trends (OK, often may be an exaggeration but I really am asked).
The reason is simple. Many of our social institutions and businesses were built on the assumption of traditional marriage and birth rates. As these rates decline it has a major impact on society and the economy - and create opportunities and risks for small businesses.