Middle Class[Income] Jobs ain't Coming Back?

[tjscott0]

I know I'm gonna regret sticking my nose between you two, but here goes.

Marko said

I always marvel at folks on this forum who can live on $50K-$75K quite nicely, flyover country or not.

People who can do the above can distinguish between "need" & "want". And it is MUCH easier to do in "fly over country".

Not My Fault said

Even going back to the seventies things were much different. My dad has a decent job but my mom still made some of our clothes. We only got one pair of school shoes and the old school shoes became play shoes. My point is that people could afford to raise a family on a factory or production job if they we were willing to accept the milkman's standard is living. I am not saying that that standard is bad it is just unrecognizable today. Imagine telling a 26 year old today to get rid of their smartphone, a couple of TV sets, their computer and anything else that wasn't commonly available to the milkman.

My father was an engineer that certainly made middle income. Our house was on 1/4 acre/3 bedroom/NO a/c/1500 sq feet 1 & 1/2 bath for Mom/Dad/3 kiddies/1 car. I think many will in the near future the current standard of housing [houses 2500 sq ft & up]unsustainable as energy prices rise.

The current middle class certainly has more stuff & gadgets. And many kids starting want to have the same living style as their parents[who likely spent 20-30 yrs rising to that living style.
But material stuff is lots cheaper now that it was 50 years ago. For example a tube color[and really not very good color] TV with 25" screen would run $500[$3600+ in todays dollars]. Quite a chunk out of a $12,000 salary. One can get a plasma 42" for $525 or LCD 42" for $400. The same is true for all appliances & phone service & vehicles & sporting equipment.

Nope, a kid starting out on a $40k can have just a good life as a kid starting out in 1965 with a $5k income. They just needed to have learned about "wants" vs "needs".

I didn't learn that lesson til I was 30. While I was making VERY GOOD income working in a job I hated*. I was living in an apartment overlooking the pacific ocean, driving a bimmer, fancy clothes, out clubbing & dining ALL the time. In effect spending twice my income, because all that stuff/crap was going to make me happy. It doesn't & didn't.
So I started over moving to fly over country & started my own business/built my own house FIREd [though I barely qualify as I was 60 when I retired].

* mebbe it was just my job. But my experience that most mid level corporate jobs have lots of responsibilities but never enough authority/power to fulfill the job's responsibility. A situation like mine build lots of stress.

 

[tjscott0]

So are we really seeing a decline of wages against inflation or are we seeing an unprecedented growth in product value coupled with a population that is unwilling to live on the back end of the value wave.

My vote is for the bolded portion of your statement. Methinks the majority of the population equates need & wants. Those that distinguish the difference can retire early & populate boards like this one.

 

[bo_knows]

I always marvel at folks on this forum who can live on $50K-$75K quite nicely, flyover country or not.

Ha, interesting. We gross about $150k-190k depending on if my wife is full time or not (not now, caregiver for our son) and even with a mortgage in a high COL metro area, we spend no more than $60k/yr. Different strokes for different folks I guess.

 

[marko]

My vote is for the bolded portion of your statement. Methinks the majority of the population equates need & wants. Those that distinguish the difference can retire early & populate boards like this one.

This is a good point, but is a cell phone and cable TV a need or a want?

Ok, it is not a need to keep yourself alive, but it is hard to not have one without "going Ted Kaczinski"

As I noted elsewhere above, cell phones can add $400 a month to a family of 4's budget, cable another $120 (without special channels) and locally, they're charging a $800 fee for high school kids to play football.

So, yes, things are better and no, I wouldn't want a car without A/C and power windows but as NMF notes there are costs to these things.

Maybe we've 'evolved' electronically that the things they were measuring 30 years ago against what we pay for now is no longer a fair comparison?

 

[Midpack]

This is a good point, but is a cell phone and cable TV a need or a want?

Ok, it is not a need to keep yourself alive, but it is hard to not have one without "going Ted Kaczinski"

As I noted elsewhere above, cell phones can add $400 a month to a family of 4's budget, cable another $120 (without special channels) and locally, they're charging a $800 fee for high school kids to play football.

So, yes, things are better and no, I wouldn't want a car without A/C and power windows but as NMF notes there are costs to these things.

Maybe we've 'evolved' electronically that the things they were measuring 30 years ago against what we pay for now is no longer a fair comparison?

OTOH we spend $30-35/mo for voice/text/data on our 2 semi-smart cellphones, and $59/mo for satellite TV (HD, DVR, 3 TV's). What you describe is (well) beyond needs outside your neighborhood...

 

[marko]

Good grief, those are NOT needs at those rates - look outside your neighborhood, there's a whole 'nother USA out there. Not to mention a host of other countries...

It's not what I pay; I"m on pay as you go...niece's family of four (hardly wealthy) pay $99 each for their precious iPads (or whatever) with unlimited data etc. Of course, that's one of the reasons they're 'hardly wealthy'.

I guess that there are just a lot of temptations out there today to spend money (Sirius XM anyone?) that didn't exist years ago.

 

[tjscott0]

This is a good point, but is a cell phone and cable TV a need or a want?

Ok, it is not a need to keep yourself alive, but it is hard to not have one without "going Ted Kaczinski"

As I noted elsewhere above, cell phones can add $400 a month to a family of 4's budget, cable another $120 (without special channels) and locally, they're charging a $800 fee for high school kids to play football.

So, yes, things are better and no, I wouldn't want a car without A/C and power windows but as NMF notes there are costs to these things.

Maybe we've 'evolved' electronically that the things they were measuring 30 years ago against what we pay for now is no longer a fair comparison?

A cell phone replaces a land line so its a need. TV always a luxury.
+1 Midpack's response to the cell phone bill in your reply.

If cellphones were around when I was growing up; my parents would have have me on the virgin mobile $20 month to month plan. If I whine that the phone wasn't an iphone--"TOUGH!". If I whined that 200 minutes a month wasn't enough--"Tough! use your paper route money to pay for more time."

Oh I'd rather have crank windows. They never broke. I'm with you on A/C though I drove decades in vehicles without a/c or broken a/c. But a/c is a want.

 

[REWahoo]

Marko, sounds like you need to spend some time examining your spending and your options.

As I noted elsewhere above, cell phones can add $400 a month to a family of 4's budget...

Yikes!

Cut your bill in half without giving up anything. Spend $600 or so to purchase four very good android phones and you can get all the bells and whistles (talk, text and data) for $45/month per phone. Check out Virgin Mobile and other pay-as-you-go services.

...cable another $120 (without special channels)...

Check out DirecTV. Under $100/mo, especially in the first year of a two-year deal.

EDIT: Cross-posted with marko. Too bad your relatives aren't as frugal as you.

 

[marko]

EDIT: Cross-posted with marko. Too bad your relatives aren't as frugal as you.

I'm wondering if my young (20-somethings) relatives' spending is an indication of where things are headed.

They spend no money on clothes, food (eat crap food and frozen pizza; standing up), drive junk cars and live in a dump. BUT...they have every conceivable Apple product, Xbox, the max cable subscription, Netflix, etc. etc. (oh! and tatoos) I've gathered that this runs them about $800 a month total.

They have low pay jobs but their priority seems to be their free time, meeting friends and hanging out at the coffee shop. Work is just something you do to keep body and soul together while you're downloading the latest app.

I've commented that they're spending their money and time on all the wrong things but I"m reminded that just their clueless old uncle.

 

[Hamlet]

There is some truth to this, but it is also true that the bottom 70-80% of our society are rapidly loosing ground. It's not just "lifestyle creep."

New jobs come in two types--

$10/hr or less, with no benefits, with minimal skills required, or

$30/hr or more, with a college degree in an in-demand major required.

You can't recreate the milkman's lifestyle at $10/hr and no benefits. The 1000 sqft ranch homes from the 50s are $100k now. You aren't going to get in that house, heat it, and keep a car running and food on the table for $20k/year, much less add a child to the costs.

It's never been a better time to be a smart, well-educated, hard-working, and talented person in this country.

It's not so great for everyone else, though. And it's pretty clearly going to get a lot worse before it gets better.

Ok maybe I was a little confrontational, condescending or arrogant. Let me try again. If we can't define middle class as an income level, lets try defining it as having the generally accepted average lifestyle. So my contention is that the generally accepted average lifestyle today is much higher today than it was. Things that didn't exist then are considered necessities today. Even going back to the seventies things were much different. My dad has a decent job but my mom still made some of our clothes. We only got one pair of school shoes and the old school shoes became play shoes. My point is that people could afford to raise a family on a factory or production job if they we were willing to accept the milkman's standard is living. I am not saying that that standard is bad it is just unrecognizable today. Imagine telling a 26 year old today to get rid of their smartphone, a couple of TV sets, their computer and anything else that wasn't commonly available to the milkman.
So to tie all this rambling together, I think that while the jobs and pay have remained relatively flat, people's expectation of a minimum lifestyle has grown by leaps and bounds.

NMF

 

[tjscott0]

Will smart machines create a world without work? - Yahoo! News

Now, three years after Google invented one, automated cars could be on their way to a freeway near you. In the U.S., California and other states are rewriting the rules of the road to make way for driverless cars. Just one problem: What happens to the millions of people who make a living driving cars and trucks — jobs that always have seemed sheltered from the onslaught of technology?
"All those jobs are going to disappear in the next 25 years," predicts Moshe Vardi, a computer scientist at Rice University in Houston. "Driving by people will look quaint; it will look like a horse and buggy."
If automation can unseat bus drivers, urban deliverymen, long-haul truckers, even cabbies, is any job safe?Vardi poses an equally scary question: "Are we prepared for an economy in which 50 percent of people aren't working?"

It turns out that computers most easily target jobs that involve routines, whatever skill level they require. And the most vulnerable of these jobs, economists have found, tend to employ midskill workers, even those held by people with college degrees — the very jobs that support a middle-class, consumer economy.
So the rise of computer technology poses a threat that previous generations of machines didn't: The old machines replaced human brawn but created jobs that required human brains. The new machines threaten both.

 

[haha]

This is a good point, but is a cell phone and cable TV a need or a want?

I'd say that anything that a large majority of people on public assistance get is a need for those who are paying for the stuff used by public assistance recipients.

Cell phone and cable certainly fit that, they are in almost all US housholds except perhaps some older people who cannot figure out how to use them.

When there were pay phones everywhere, who needed to carry a phone? Now that there are pay phones nowhere, we all need a cell phone, if only to have something to give the mugger when he sticks a gun in our face.

I have one friend who refuses to have a cell phone; a retired professor. He thinks he is resisting social rot, but really he is being a PITA for anyone trying to interact with him.

Ha

 

[Koolau]

I don't know. You got a mouse in your pocket?

Someone asked this question at w*rk several years back. Our self-trained-go-to-unofficial-in-house IT guy said "yes" and whipped out a mouse.

 

[photoguy]

So to tie all this rambling together, I think that while the jobs and pay have remained relatively flat, people's expectation of a minimum lifestyle has grown by leaps and bounds.

NMF

From what I've seen that is not born out by the data. E.g., look at

http://www.finance.senate.gov/imo/media/doc/051007testew.pdf

especially figure 3 and 4. The costs that are up are things like mortgages, health care, child care, car (probably because both parents need to work now). Supposedly, even for mortgages house size has not increased much but mortgage payments have nearly doubled (inflation adjusted).

Figure 4, lists discretionary spending and it has not changed at all from the 1970s. In 1970 it was ~19.5K per median family and in 2000s was about 18k.

 

[tinlizzy]

It's been interesting to see other folks thoughts on the article.

It actually ties in nicely with Koogie's post above your post. Webb Wheel may be able to produce 25% more product with machines but they are also using 25% more raw materials which, unless they are situated on a rail line, gets delivered by a person in a truck. Jobs lost vs. jobs gained by a trucker may not be equal but there is an offset, not a total destruction of one job, forever. Making sure that you land in the right industry might very well be key.

This example of automation also ties in nicely with the infrastructure posts.

 

[Walt34]

So to tie all this rambling together, I think that while the jobs and pay have remained relatively flat, people's expectation of a minimum lifestyle has grown by leaps and bounds.

NMF

I have to agree. So much of what many now regard as necessities simply didn't exist for anyone at any price in the '50's and '60's

Growing up then, our family had one rotary-dial telephone in the living room. Long-distance calls were expensive and thus limited to birthdays, Christmas, or when someone was born or died. For normal family communication we wrote letters. The distances were from MD to PA and NY state, not even across the country.

Disneyland was something rich people did. We didn't even dream of it.

We had one B&W television with four channels.

Until the mid '60's we had one car, which was only driven locally a few times a week because fuel (@ 20-25 cents/gallon!) was expensive. Dad car pooled to work.

In the summer we sweated a lot and stayed in the shade when possible. A/C was something found only in stores, and not even all of them.

I was ecstatic when I got a bicycle. Didn't matter that it wasn't brand new.

But hey, we had it good! We had more-or-less decent clothes, central heat, indoor plumbing (one bathroom) and never went hungry.

Try telling today's kids that's a middle-class lifestyle.

 

[bUU]

I have to agree. So much of what many now regard as necessities simply didn't exist for anyone at any price in the '50's and '60's

I agree, but I also warn against falling back on such an explanation as a rationalization for any kind of repudiation of the current day. The '50's and '60's were terrible times to live in many way, as compared to today.

Growing up then, our family had one rotary-dial telephone in the living room. Long-distance calls were expensive and thus limited to birthdays, Christmas, or when someone was born or died.

Thereby placing distance between family members - a very negative thing.

For normal family communication we wrote letters.

No substitute for talking live, and increasingly we're realizing that even telephone is no substitute for actually seeing each other through Skype video chat (especially when babies are involved).

Disneyland was something rich people did. We didn't even dream of it.

I remember jealously regarding - not the souvenirs - but just the park maps that my best friend brought home, for the superior entertainment value that they represented, withheld from me because we were a poor family.

We had one B&W television with four channels.

And everyone in the country was therefore expected to suppress their own individual affinities and abide by some homogenized, mainstream view of what was entertaining. And don't get me started on how negative this was with regard to race, ethnicity and gender.

Until the mid '60's we had one car, which was only driven locally a few times a week because fuel (@ 20-25 cents/gallon!) was expensive. Dad car pooled to work.

The only one of your examples for which I cannot come up with a clear negative characterization. However, I suspect my friend Kathie's husband, who is a car nut, would be able to.

In the summer we sweated a lot and stayed in the shade when possible.

I don't really want to post about how much more prevalent death, especially of the elderly, was tied to excessive exposure to heat or cold, due to the cost and relative lack of options regarding climate control in the home. But heck, survival of the fittest, right? If it's good enough for the wolves and hyenas, it's good enough for us. eh?

Try telling today's kids that's a middle-class lifestyle.

And this raises another issue. Five hundred years ago, everyone knew how to stoke the coal stove (or whatever it is they did to keep their homes warm), a skill that practically no one has today. Now some people twist this fact into a veneration of having such antiquated skills, and I suppose if you're hoping and praying for a complete break-down of society and relish some dystopian vision of the future that makes sense. The other side of the coin is that given that we're living today, in this time period, with this indoctrination and foundation for society, expectations are only relevant vis a vis this reality, not some reality from fifty years ago or five hundred years ago.

 

[Walt34]

And this raises another issue. Five hundred years ago, everyone knew how to stoke the coal stove (or whatever it is they did to keep their homes warm), a skill that practically no one has today. Now some people twist this fact into a veneration of having such antiquated skills, and I suppose if you're hoping and praying for a complete break-down of society and relish some dystopian vision of the future that makes sense. The other side of the coin is that given that we're living today, in this time period, with this indoctrination and foundation for society, expectations are only relevant vis a vis this reality, not some reality from fifty years ago or five hundred years ago.

Whoa, go easy there guy. I wasn't saying that era was better.

Only that expectations, as you correctly observe, have changed.

The question is that "are those expectations realistic and sustainable?"

In think that in many case they clearly are not given the dire financial straights many people find themselves in buying stuff that I and many others got along with just fine without.

 

[bUU]

Fair enough. By the same token, it isn't clear that any specific set of expectations are sustainable. That set of expectations from years-gone-by clearly were not, as society insisted on changing them.

So this essentially boils down to the only constant in society is change.

 

[MichaelB]

Whoa, go easy there guy. I wasn't saying that era was better.

Only that expectations, as you correctly observe, have changed.

The question is that "are those expectations realistic and sustainable?"

In think that in many case they clearly are not given the dire financial straights many people find themselves in buying stuff that I and many others got along with just fine without.

+1

Both expectations and social standards.

 

[marko]

The other side of the coin is that given that we're living today, in this time period, with this indoctrination and foundation for society, expectations are only relevant vis a vis this reality, not some reality from fifty years ago or five hundred years ago.

I think there is some validity on this. Is the new reality one where you have low expectations of what we oldsters would call 'the good life' and in many cases don't even want that?

Is the new 'good life' one where social contacts and being constantly entertained (or however else you might define it) is what is sought after and the 'dream' of the nice home/white picket fence no longer even valued? (bread and circus?)

Is the new generation on to something in that they don't value a career, making money and acquiring as the goal? (this IS an ER forum afterall)

My more recent post (I gotta stop drinking before posting!) outlined my frustration with my niece's family values but I wonder if they're happier accepting their lives.

As a side comment, when we were kids, we'd ask our grandmother to "tell us about the good old days". She said: "These are the good old days...when I"m cold, I turn up the heat, when its dark I turn on the light".

Every period of time has it's own values and maybe the 'middle class' is a value that is no longer relevant. (?)

 

[Walt34]

Every period of time has it's own values and maybe the 'middle class' is a value that is no longer relevant. (?)

That could very well be. One article reports that the median American household income is a bit over $46k/year.

There are a huge number of lifestyles available with those resources. Few are necessarily "better" but they certainly can be widely different.

 

[audreyh1]

I have to agree. So much of what many now regard as necessities simply didn't exist for anyone at any price in the '50's and '60's

Growing up then, our family had one rotary-dial telephone in the living room. Long-distance calls were expensive and thus limited to birthdays, Christmas, or when someone was born or died. For normal family communication we wrote letters. The distances were from MD to PA and NY state, not even across the country.

Disneyland was something rich people did. We didn't even dream of it.

We had one B&W television with four channels.

Until the mid '60's we had one car, which was only driven locally a few times a week because fuel (@ 20-25 cents/gallon!) was expensive. Dad car pooled to work.

In the summer we sweated a lot and stayed in the shade when possible. A/C was something found only in stores, and not even all of them.

I was ecstatic when I got a bicycle. Didn't matter that it wasn't brand new.

But hey, we had it good! We had more-or-less decent clothes, central heat, indoor plumbing (one bathroom) and never went hungry.

Try telling today's kids that's a middle-class lifestyle.

Walt, I think this is a great example of what the middle class lifestyle really was. I think people forget how careful people were with money. What mattered was the job, the house, the car, and a decent school for the kids. Everything else was "extras".

 

[jollystomper]

I wonder how much consumerism and "keeping up with the Joneses" has impacted our view of what should be considered "middle class".

I perceive that things in the past that may have cost relatively more also lasted longer (and were relatively cheaper to repair). The car or TV may have cost a larger portion of ones salary, but tended to last much longer.

We also seem to be driven much more by external forces (the media, advertisers, celebrities, etc.) and looking at our neighbors to determine what we should have. We live in a nice 3000 square foot house, and a few years ago after a party for our kids, one of their parents contacted us and said she has a house designer and our house had a lot of potential for improvement, and for a "nominal fee", in addition to the cost of upgrades, we could have a "showcase". Our argument was "we like our house, everything in it works, the furniture is clean and functional, what more do we need?" Her argument was "you're wasting what that house could be, its not on the same par as other houses of that size and style, don't you want to impress others?"

My general view is that I don't have the answers... but I try not to dwell too much on the "good old days", because its easy to remember the good and not the bad. I just try to figure out the current situation and do my best to work from there.

 

[bUU]

Is the new reality one where you have low expectations of what we oldsters would call 'the good life' and in many cases don't even want that?

Why call them "low" expectations? Why call it "the good life"? Presupposing the quality doesn't allow you to look at the relative merits outside of one's own personal inclinations. The best example I have of this is my father and my brother, clashing about whether the music of the 1940s or the 1960s was better. They're never going to really understand the reality because they've blinded themselves to the relative merits of what they, themselves, choose not to value.

Is the new 'good life' one where social contacts and being constantly entertained (or however else you might define it) is what is sought after

As opposed to being continually alone (on the wild frontier?) and eternally without leisure or eternally bored? Again, it is a matter of perspective.

and the 'dream' of the nice home/white picket fence no longer even valued? (bread and circus?)

Americans have always had a rather strange set of 'dreams' as compared to other developed countries: Americans have always been outliers with regard to how far remote they want to be from their neighbors, from the communities within which they live. My German colleagues living for a while here have relayed how Germans more greatly value consideration of one as part of their town, as evidenced even by little things like how little regard they place on the distance between each home as compared to Americans. This marks the American dream quite different from that of other developed nations, and it's almost impossible to craft a reasonable justification for why McMansions on acres of land with quarter-mile long driveways should be the ideal instead of nice homes in community with other nice homes, and neighbors see each other eye-to-eye each morning, learning to care about each other more than their own flowerbeds.

Beyond that, the more structural barriers between the current state and whatever the 'dream' is become apparent, the more the 'dream' becomes a negative quality rather than a positive one.

Is the new generation on to something in that they don't value a career, making money and acquiring as the goal? (this IS an ER forum afterall)

This is a great point. I think the more you watch those around you pass away, the more you realize how petty these kinds of goals you alluded to in this question are - the more such matters are facilitators of what is truly important rather than being important, themselves.

As a side comment, when we were kids, we'd ask our grandmother to "tell us about the good old days". She said: "These are the good old days...when I"m cold, I turn up the heat, when its dark I turn on the light".

Wise words.