The importance of the family in the economy.

Here's an interesting piece by Joel Kotkin at the family and the importance it plays in the economy and in the minds of Americans.

He looks at its role in the economy.

Americans, with good reason, increasingly distrust the big, impersonal forces that loom over their lives: Wall Street, federal bureaucracy, Congress and big corporations. But the one thing they still trust is that most basic expression of our mammalian essence: the family.

Family ties dominate our economic life far more than commonly believed. Despite the power of public companies, family businesses control roughly 50% of the country's gross domestic product, according to the research firm Gaebler.com. Some 35% of the Fortune 500 are family businesses, but so too are the vast majority of smaller firms. Family companies represent 60% of the nation's employment and almost 80% of all new jobs.

And despite the glowering about impersonal corporate agriculture and the overall decline in the number of farms since the 1950s, almost 96% of the 2.2 million remaining farms are family-owned. Even among the largest 2% of farms, 84% are family-owned. The recent surge in smaller, specialized farming may actually increase this percentage in the future.

It reduces the likelihood of poverty.

Family life also often determines the economic success of individuals--something widely understood since the controversial 1965 Moynihan Report linked poverty among African-Americans to the decline of intact family units. Today more than half of black children live in households with a single mother, a number that has doubled since the 1960s, and they are much more likely to live in poverty than non-blacks. When you consider intact African-American families the so-called "racial gap" diminishes markedly.

The confluence between upward mobility and strong family networks remains extraordinary not only among African-Americans but among all groups. Only 6% of married-couple families live in poverty, and most of them, like previous generations of newcomers, are likely to climb out of that state. "Families," suggests Nobel Prize-winning economist James Heckman, "are the major source of inequality in American social and economic life."

The family continues to be importance to Americans.

Yet despite these predictions, our mammalian instinct to trust family first has remained very strong. Some 90% of Americans, notes social historian Stephanie Coontz, consider their parental relations close.

And younger generation view the family as important.

And then we have to consider the new generation. The millennials, note researchers Morley Winograd and Michael Hais, are very family-oriented. Indeed three-quarters of 13-to-24-year-olds, according to one 2007 survey, consider time spent with family the greatest source of their own happiness, rating it even higher than time spent with friends or a significant other. More than 80% think getting married will make them happy, and some 77% say they definitely or probably will want children.

Anyone looking into the future of the country’s economy cannot do so without considering the continued importance of the family. Americans' most important decisions--where to move, what to buy, whether to have children--will continue to revolve largely around the one institution most can still trust: the family.