Young workers are getting more optimistic about the future despite worrying long-term trends in the job market, according to a new study released by the Federal Reserve Monday.
The report, based on a survey commissioned by the central bank, found that 61 percent of 18- to 30-year-olds said they were optimistic about the future.
That was a major increase from the findings from the same survey in 2013, when just 45 percent were optimistic. The survey was conducted in 2015, the first year in which the jobs recovery that began in 2010 translated in significantly faster wage gains.
The results are one more indication that the public started to feel the economic recovery more personally starting in 2015. Consumer sentiment plateaued during the year as the unemployment rate fell to 5 percent, and statistics about jobs and wages have only improved since then as President Obama prepares to hand the White House over to President-elect Trump.
Nevertheless, the survey also showed that young people could be in for a rough time if work continues to become more “gig-based” and less centered on full-time work at one employer. Nearly two-thirds of the young workers survey prefer steady work over higher pay, according to the survey. Yet, over the past 10 years, nearly all the increase in employment is attributable to “alternative arrangements” such as freelancing or contract work, one prominent study has found. Over the same time, labor force participation has been dropping for young people.
And even with the recent improvements, lots of young people are still effectively living paycheck-to-paycheck. Only 45 percent would be able to cover their living expenses for a month if they lost work. That is up from 38 percent in 2013, however.
The Fed has repeatedly produced research highlighting the fact that many Americans have little ability to withstand a financial shock. For example, one recent poll indicated that half the country would have trouble coming up with $400 in an emergency. The 2015 survey of young workers is just the second such survey done by the Fed.
The survey was carried out by a research company using an online panel of young people, of whom over 1,000 responded.
