By many conventional measures, the U.S. economy has grown substantially over the past several decades. GDP has increased, productivity has risen, and technological innovation has expanded consumer choice. Yet surveys consistently show that many Americans feel financially anxious, uncertain about the future, and vulnerable to economic shocks.
This disconnect between growth and security is not simply a matter of perception. It reflects structural changes in how economic gains are distributed, how risks are allocated, and how households experience stability in everyday life.
Growth and Lived Experience
Economic growth measures aggregate output, not individual security. While national indicators may trend upward, household-level experiences vary widely. Median wages have grown more slowly than productivity, and income volatility has increased, particularly for middle- and lower-income households.
The Federal Reserve’s Survey of Household Economics and Decisionmaking finds that a significant share of Americans would struggle to cover an unexpected expense without borrowing or selling assets, even during periods of economic expansion.
Growth, in this sense, does not necessarily translate into resilience.
Sources:
-
Bureau of Economic Analysis, GDP data
-
Federal Reserve, Survey of Household Economics and Decisionmaking (SHED)
-
Economic Policy Institute, productivity and wage trends
The Shift of Risk Onto Individuals
One major change in the modern economy is the transfer of risk from institutions to individuals. Employers once provided pensions, long-term employment, and predictable career ladders. Today, workers are more likely to rely on defined-contribution retirement plans, contract work, and frequent job transitions.
These arrangements can offer flexibility, but they also place greater responsibility on individuals to manage market volatility, healthcare costs, and retirement planning. When risks are individualized, insecurity increases—even if average incomes rise.
Research suggests that economic anxiety is closely tied to volatility rather than absolute income levels.
Sources:
-
Hacker, Jacob. The Great Risk Shift
-
OECD, employment and income volatility reports
-
U.S. Department of Labor, retirement plan trends
Rising Costs in Essential Areas
Another factor shaping insecurity is the rising cost of essential goods and services. Housing, healthcare, childcare, and education now consume a larger share of household budgets than in previous decades.
These costs are difficult to reduce or avoid, limiting household flexibility. Even families with stable incomes may feel financially constrained when large portions of their earnings are pre-committed.
Unlike discretionary spending, these expenses carry high downside risk—missed payments or gaps in coverage can have lasting consequences.
Sources:
-
Bureau of Labor Statistics, Consumer Expenditure Survey
-
Brookings Institution, cost-of-living analyses
-
U.S. Department of Housing and Urban Development, housing affordability data
Economic Growth Without Predictability
Security depends not only on income, but on predictability. When earnings, schedules, or expenses fluctuate, planning becomes difficult. Research shows that unpredictability increases stress and reduces long-term investment in education, health, and community.
In this environment, even positive economic news can feel abstract. Growth may occur at the macro level while households experience uncertainty at the micro level.
This helps explain why economic optimism often lags behind economic performance.
Sources:
-
Morduch, Jonathan, and Rachel Schneider. The Financial Diaries
-
Federal Reserve Bank of New York, labor market volatility studies
-
Pew Research Center, economic confidence surveys
Security as a Social Condition
Economic security is not solely an individual achievement; it is a social condition shaped by institutions, norms, and policy design. When safety nets are fragmented and access to benefits depends on employment status or geography, insecurity becomes widespread.
Comparative research shows that countries with similar levels of economic growth can produce very different levels of perceived security, depending on how risks are pooled and managed.
This suggests that insecurity is not an inevitable byproduct of growth, but a feature of how growth is organized.
Sources:
-
OECD, How’s Life? well-being framework
-
World Bank, social protection research
-
Pew Research Center, international attitudes toward economic security
Rethinking What Economic Success Means
The gap between growth and security raises questions about how economic success is defined and measured. GDP captures output, but not stability, resilience, or peace of mind.
For many Americans, feeling secure means having confidence that illness, job loss, or economic downturn will not trigger cascading harm. Growth that fails to provide that assurance may improve statistics without improving lived experience.
Understanding this distinction does not require rejecting growth, but it does require supplementing it with measures that reflect household stability and risk.