The inspiration for the song and its title came to the band's singer and songwriter Pat MacDonald when his wife Barbara optimistically told him, "The future is looking so bright, we'll have to wear sunglasses!" He liked the unintentional double meaning of the phrase and decided to use it in an ironic fashion to write the song. Originally, the song had several different verses which made the song's dark underlying tone more obvious. Examples of these included "Well I'm well aware of the world out there/getting blown all to bits, but what do I care?" and some references to a President Reagan supporter as "a flaming fascist". These were eventually removed to get a more ambiguous and subtle tone of the song. However, the rare extended version of the song that can be found on the band's EP "Looks Like Dark to Me" does actually contain an additional darker verse: "Blowin' up the lab, Blowin' the professor/Torn between two evils, I always pick the lesser". Incidentally, the EP's title track contains a reference to the song in the lyrics "The future's been bright for so long now, it looks like dark to me".
The unique way this song is used in the 1987 episode of then popular sitcom "Head of the Class" (1986) called "Video Activity" (#1.19) helped establish the popular misconception that the song is actually about celebrating graduation and what comes after it, even if in a slightly tongue in cheek way. However, the song, while indeed satirical, is actually about the looming nuclear holocaust (the literal "bright" future that the lyrics mention) of the Cold War, and one of the people, a graduating nuclear scientist, who'll enable it (the shades refer to the protective glasses that people wear while observing nuclear weapons tests), but who doesn't really care about any of it because he only thinks about the near future and its promising financial prospects that benefit him.
The song plays extensively in the trailer for The Allnighter (1987), a comedy starring Susanna Hoffs, the co-founder of a popular 80s band called The Bangles.