There has been a strange disconnection between Americans and the economy in recent years. Most of the traditional measures of economic success indicate that we are in a prosperous time. The real GDP has nearly doubled in the past two decades, unemployment has stayed between five and six percent, and median pre-tax incomes have grown by 10 percent. Most Americans are doing better than they were two decades ago. It is striking to see the negative opinions many Americans hold about the economy.

A recent CBS News/New York Times poll asked people their view of the state of the economy. Sixty-one percent responded that it was in bad shape. This has not changed much since 2003, when 60 percent of respondents had the same opinion. Why are Americans so despondent about the economy when most indicators say otherwise?

The nonprofit Council on Competitive recently released a report on America’s competitiveness in the world. The report highlights stark contrasts about the American economy that shine light on this conundrum.

Although the economy has been growing, the gains have been unevenly divided by wealth and education. Since 1986, the top fifth of households saw an increase of 32.5 percent in their mean income, while the bottom fifth only saw an increase of 8.6 percent. Workers with a bachelor’s degree gained 7 percent in mean income, while those with only a high school diploma lost about 11 percent.

American pessimism about the economy may reflect concerns about the erosion of traditional financial security. Decades of deregulation and privatization have dismantled many of the programs that have helped struggling Americans. Well-paying union jobs have all but disappeared as union membership has decreased to 12.1 percent of the workforce. Only 60 percent of Americans are covered by employer-based health insurance today, a drop of more than 20 percent since 1987.

For years, the assumption was that economic growth would be evenly distributed among Americans. That was the case during the 1950s and 1960s, when New Deal legislation helped ensure that worker income would rise with corporate profits. That is no longer true today, as indicated by persistent income gap in American productivity. Should we really be surprised that Americans are pessimistic about the economy when many fear that an unexpected illness or job loss could send them into financial ruin?

We may be returning to a period when Americans are more concerned about keeping the wages and benefits they have rather than increasing their wealth. When the Democrats were campaigning to regain Congress in 2006, they proposed an agenda called “Six for 06”. Of the six major points, only the one about increasing minimum wage was made into law. The fact that this occurred during a year when little else was accomplished in Congress shows how important financial security has become.

What does this mean for the future? The traditional arguments for economic improvement, like tax cuts and deregulation, may no longer sway American opinion. Every year, about 30 million jobs are created and destroyed. To many economists, this is a sign of a healthy economy that is constantly reinventing itself. To many Americans, this indicates that the economy has become too volatile for their comfort level.

[Reach columnist Mike Noon at opinion@thedaily.washington.edu.]