Will Social Institutions Mediate Economic Trends

JUDITH TREAS [*] ABSTRACT. This comment is in response to Frederic L. Pryor (2000). "The Millennium Survey: How Economists View the U.S. Economy in the 21st Century." The American Journal of Economics and Sociology. 59 (January), pp. 3-33. The Millennium Survey demonstrates that social scientists, even those unified by the shared paradigm of economics, are boggled by the future. Presented with the same description of 2Oth century trends, they reach quite different conclusions about the future of the economy, population, and environment. Most intriguing is their widespread conviction that such trends will have a major impact on the economic system and other important institutions. The futures of these intertwined institutions merit closer attention. First, our social institutions influence the economic indicators considered by the Millennium Survey. For example, the declining volatility in the U.S. economy owes much to our political institutions: Since the Great Depression, the federal government has taken an active role in smoothing out the bumps in the economy. It remains to be seen whether government institutions will measure up to the economic challenges of the future. The success of U.S. economic policy is due, in part, to a well-developed system of statistical monitoring that provides decision-makers with timely data. As Frederic Pryor points out, this system may be less and less adequate to the task, given fundamental changes in what is produced and in the nation-state's role in a globalized economy. Second, our social institutions buffer individual Americans from economic downturns and income inequality. We need to know if our institutions will continue to sustain Americans under the various economic scenarios projected. Will federal welfare reforms that seem so successful in an economic expansion meet the needs of low-income Americans in an economic recession? Will schools give children the skills they will need in the changing workplace of the 21st century? Will livable communities exist for people at both ends of the economic spectrum? Will families continue to nurture and support the most vulnerable segments of the American population--children, the elderly, and the disabled? Trends in the status of older Americans show that the family, the government, the market, and the community can form a successful partnership to address the needs of a special population. Social Security, Medicare, nutrition programs, private insurance, employer pensions, subsidized senior housing, church outreach programs, and community senior centers protect older people from the contingencies of the economy and old age. Fears that government intervention would undermine family responsibility have proven unfounded. Despite the increase in formal services, most of the assistance received by the disabled elderly continues to be informal services provided by their spouses and offspring (Treas 1995). To be sure, programs for older people can be faulted on a number of grounds. They don't necessarily target the neediest elderly, and they are so balkanized that services can be difficult to access and coordinate. Nonetheless, there is no doubt that the lives of older people have improved. Although 35.2 percent of Americans ages 65 and older had incomes below the poverty line in 1959, that figure stood at only 10.5 percent in 1998 (U.S. Census Bureau 1999). Ironically, the enormous successes of the 20th century--the lengthening of life expectancy and the improved status of older people--are now regarded with alarm. The growing numbers of elderly and their associated entitlement programs are called a drag on economic growth and a threat to global security (Peterson 1999). As demographer Samuel Preston noted in 1984, children have not fared as well as the elderly in American society. …