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Old 05-27-2011, 06:16 PM   #41
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Do you think your father could support the same lifestyle today in the same profession? Would he be squeezed?
+1 I'd say that pretty well hits the nail on the head. Are folks today, in equivalent jobs, on average, able to maintain comparable lifestyles (including preparing comparably for retirement) than at some other point of comparison - past or future to come? But that would seem incredibly difficult to tease out from the many factors that make up a material standard of living.

Like some others here, I grew up among families (mine included) who all considered ourselves firmly in the middle class. On average we lived in smaller houses, had fewer cars, fewer electronics, etc., - when compared with my cohort today.

Some of the difference is hedonistic creep (i.e. choosing larger houses, 2nd or 3rd cars, more communications services, etc.). Some is probably the result of technology advancements or globalization driving down the cost of certain goods and services (e.g. TVs - or the desktop electronic calculator my dad bought for $120 when I was teen that can be bought as a pocket-sized version at Walmart for $3 or less today). Some may be a bit of personal good fortune and upward mobility compared with my cohort from then. Hard to tell overall.

But to add my full measure of uninformed internet BS about which Haha has meta-opined above, it is hard for me to see how a persistent hollowing out of the US manufacturing base, a decades long stagnation of middle-income wages, and an increasing disparity of wealth accumulation can be viewed as healthy trends for sustaining a robust middle class.

Your mileage may vary.
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Old 05-27-2011, 06:34 PM   #42
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In my small little world, I thought "middle class" definition was easy to define. Now, I don't think, I know the true answer. Too many variables and perception. Middle class "stability" is a whole other concept. I consider myself comfortably middle class, but if my pension suddenly got cancelled, I would be so poor, I couldn't pay attention within months. Someone who has large assets but only draws down in a yearly manner equivalent of my income could do that indefinitely, but still consider themselves middle class like me.
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Old 05-27-2011, 07:03 PM   #43
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Quote:
Originally Posted by oneils
Do you think your father could support the same lifestyle today in the same profession? Would he be squeezed?
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But to add my full measure of uniformed internet BS about which Haha has meta-opined above, it is hard for me to see how a persistent hollowing out of the US manufacturing base, a decades long stagnation of middle-income wages, and an increasing disparity of wealth accumulation can be viewed as healthy trends for sustaining a robust middle class.
And both can be explained by globalization which is/was inevitable. Long ago the world was too "large" to force competition across borders much less oceans and mass production was unheard of. The world got a little smaller and mass production began to expand, but then we entered a period after WWII where our (US) fathers didn't have any competitors. Japan and much of Europe was rebuilding and many other countries suffered under communism, dictators, primitive cultures, etc.

Now that there are dozens of advanced/developed countries and a global economy, US manufacturing is not as competitive, hence the 'hollowing out' leading largely to stagnating middle class incomes. Trade surpluses became (huge) trade deficits. Our currency is not what it once was. Only Americans who are on the leading edge of their industries can still command high wages, leading to increasing disparity of wealth in the US. And again, it was inevitable the US would lose the advantage we had post WWII, it hasn't been due to government policy failures...
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Old 05-27-2011, 07:33 PM   #44
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Now that there are dozens of advanced/developed countries and a global economy, US manufacturing is not as competitive, hence the 'hollowing out' leading largely to stagnating middle class incomes. Trade surpluses became (huge) trade deficits. Our currency is not what it once was. Only Americans who are on the leading edge of their industries can still command high wages, leading to increasing disparity of wealth in the US. And again, it was inevitable the US would lose the advantage we had post WWII, it hasn't been due to government policy failures...
The whole story is really great news for the totality of people on the planet. And the US still enjoys significant competitive advantages over much of the world: mineral wealth, available land, tremendous water resources, a stable government, rule of law, English as a native language, good infrastructure (it's usually cheaper to repair or improve than start from scratch), etc. We're gonna be fine. But the days when one breadwinner with a HS diploma could routinely keep a family of four in a comfortable, healthy lifestyle are gone. That was only possible for 2 generations due to a fluke of history: not before, and probably not again.
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Old 05-27-2011, 07:34 PM   #45
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Me neither but I am interested in a discussion of what is needed in financial regulations...

...So it seems to me the regulations should be such that allow somebody like me to take on a risky loan. At the same time they should put the burden of the financial institution to make sure that borrower is in fact qualified and really understands what they are getting into.
I think we're outnumbered, Clif. I do appreciate the response, though.
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Old 05-27-2011, 07:50 PM   #46
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This is just stuff off the top of my head. Progress has just led to so many options and stuff to buy. I mean I can imagine what a typical family did 50 years ago:

- sent their kids to play in the park (no extra-curr. activities)
- had one radio
- had one car and carpooled
- went camping or visited relatives for a vacation
- sent the kids to trade school or local college (reduced education costs)
- bought used furniture
- bought department store clothes
- bought used appliances
- skipped everything else on the list above.

The way I see it, the Canadian middle class is really suffering from an abundance of choices and lifestyles. We just have to pick the one that fits our resources.
For the record, we lived on one income. My dad was a salesman at Sears and never led his dept in sales.

On your list:
Virtually no extra activities. One of my sisters took ballet taught by a neighbor in her basement.
We had two radios and a 10" B&W TV. My folks would get color around 1969.
We had one car until my dad bought a 52 chevy when he had multiple kids with summer jobs.
We vacationed at relatives.
My folks splurged on college - even sending their daughters (why would a girl go to college?!). Church related and subsidized four year school.
If they bought furniture or appliances, they would be new. But everything lasted at least 20 years and they would never consider replacing something just for style.
Bought clothes at Sears.
(BTW, we ate organic vegetables because that's the way we grew them.)

The differences in experiences are again in defining "middle class". Unless we know our parents' actual income, and the median for the relevant year, we're really guessing whether our folks were in the middle. Two of us might both think we had "middle class" families, but one could have had twice the income of the other.

We do know that the median earnings of American males went up quite a bit faster than the CPI from 1950 through about 1980, but then flattened out. So the median income should buy noticeably more today than in 1961, but not necessarily more than in 1980.

I think some of the perception of "can't make ends meet" is the expectation that each generation would do better than the prior. So simply having what your folks had, especially when those people on TV always seem to have more, makes many feel deprived.
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Old 05-27-2011, 07:50 PM   #47
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Some is probably the result of technology advancements or globalization driving down the cost of certain goods and services (e.g. TVs - or the desktop electronic calculator my dad bought for $120 when I was teen that can be bought as a pocket-sized version at Walmart for $3 or less today). Some may be a bit of personal good fortune and upward mobility compared with my cohort from then. Hard to tell overall.
But at the same time, this "globalization" has, to some extent, also resulted in job exports, higher unemployment and pressure on real wages (when more people are unemployed, supply of labor increases so the "market value" of labor falls in the absence of corresponding higher demand).

It's not clear whether or not on balance we're better off, but it really doesn't feel like it. Adjusted for "real" inflation in the necessities -- health care, food, energy, education, et cetera -- "middle class" wages are probably down pretty sharply from their peak, maybe 10-15% or more I'd guess.
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Old 05-27-2011, 09:46 PM   #48
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As i tried to say, (perhaps ineffectively) in an earlier post, the definition of middle class is really inexact. I used the $250k, because that is the upper income limit usually reported by the US census bureau. In the last data they published from 2009, only 1.8% of households had an income of $250k or more. Also, more than 50% of HH had a HH income of $50k or less. Yet, it you talked to members from both groups you would find many that see themselves as middle class.
And, I think it is pretty true, that for most families with kids at home from either group, it is harder today to provide all the stuff of life that they provided five years ago.
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Old 05-27-2011, 10:28 PM   #49
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I'm starting to think my family was working class poor rather than middle class. Could be.
Don't worry, I'm starting to have the same thoughts. I guess none of us wants to think that we came from below average backgrounds but at least half of us are below the median!
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Old 05-28-2011, 06:48 AM   #50
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I'm starting to think my family was working class poor rather than middle class. Could be.
We definitely were. Dad was an electrician working for the local power company. His "down payment" for the house, a two bedroom one bath Cape, was that he did not take the refrigerator that was supposed to come with the house and instead found a "scratch 'n dent" one that had a dent on the side that was going to be against a wall anyway. The third "bedroom" was the semi-finished off attic.

Our cars were all bought used, we did get some new clothes from Wards and local discount stores, but they were always on sale and we wore a lot of hand-me-downs. Getting a window air conditioner and a clothes dryer in the mid '60's were major lifestyle improvements. I didn't see the inside of a restaurant until high school. A $50 gasoline-powered lawn mower was a big deal over the hand-powered reel mower.

But we also never went hungry, although it wasn't always what we wanted.

Now DW and I live in a home with amenities that we didn't even dream of growing up. Central A/C? Dishwasher? Garbage disposal? Two-car garage? Nobody we knew had money for that stuff.

So yeah, there sure is some element of lifestyle creep and rising expectations.
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Old 05-28-2011, 08:01 AM   #51
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I feel the same.

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I'm starting to think my family was working class poor rather than middle class. Could be.
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Old 05-28-2011, 09:21 AM   #52
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It's not hard to imagine. It wasn't that long ago that our income was in that range and it won't be long before it goes back to that range (as soon as DW retires in fact). It does not change my perception: we were, are and will remain middle class.
If retiring early doesn't constitute luxury spending, I don't know what does. And accumulating wealth instead of spending it doesn't make someone any less rich.
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Old 05-28-2011, 09:31 AM   #53
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If retiring early doesn't constitute luxury spending, I don't know what does. And accumulating wealth instead of spending it doesn't make someone any less rich.
OK, I'm rich. Happy?
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Old 05-28-2011, 09:43 AM   #54
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I'm starting to think my family was working class poor rather than middle class. Could be.
We certainly were. Growing up in a slightly "rural" area helped though (town of 24k in a very low cost area).

Dad retired from the AF after 20 as an E6. While still in, he and mom saved up enough to put $20k down on a $40k house in 1985. This house was back home where mom was from; grandpa had cancer at the time. We were able to move there in 1989 and spend some good years with grandpa before he passed.

Dad had a good job as a mechanic for one of the local regionals (he was a crew chief in the AF then got his civilian airframe cert when he got out) but they went belly up. After that, he was unemployed for a while (depressed area of the country, still is) and then landed a good-enough paying job.

Many years we were around or below the poverty line. Mom and dad were great at LBYM though and still saved. I wish I was smart enough to learn then but I sort of went on a spendthrift rebellion once I was out on my own.

I remember working on the family wagon out in the cold with dad when the temp was around -20f (windchill, -50f)... no garage. I remember the house being around 60 in the winter (55 at night) but still coming in and finding a warm radiator to sit on after a paper route out in -70f windchill weather. Summers were almost always fine even though we didn't have AC. However, one August it was so hot that we all camped out in the living room (which took up half the first floor) with the windows open on both sides and box fans blowing in one window and out the other to give us a good breeze.

Mom always bought on sale and we kept a rotating stock of canned goods in the basement. Us kids would bring the groceries down and stock the shelves (newest in the back) and then always pull from the front based on expiration.

I do remember getting government-issue food from an assistance program. I'm not sure how long that went on for... but I know we always traded the fake Velveeta away for more peanut butter.. oh, and I still have bad memories of warm powdered milk (if you ran out and had to mix up a new batch).

Of course, all in all, it was an excellent teenhood and I never remember going without. I just wish I had paid attention more when I was living it.

Oh, and I went to school at the local university. I received a lot of state and federal assistance due to my family's finances and, as a result, I was able to graduate virtually debt-free (I did borrow $4k in student loans to buy my first car when I was 19, but other than that....)
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Old 05-28-2011, 04:00 PM   #55
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My parents were frugal. But we were middle class even though they were always talking about money. House was nice. But as a kid I thought we were poor because of the way my parents were always seeking ways to save money. It wasn't until I started listening to comments from others that I realized we weren't poor. They are now 90 and 86. They still look for cheap goods. We finally convinced them to buy real juice instead the cheap stuff full of HFC! They also buy real maple syrup now! Amazing! They have money but don't spend it. Just because you aren't visibly wealthy doesn't mean you aren't. I live in a small cabin and kind of take after my parents in some ways. I'm not a big consumer and nobody would guess my net worth. I do drink real juice. In fact most food is organic which is probably one of the most expensive ways I spend my money. My siblings however are a different story.

Oh yeah and my mother also was big on Velveeta and mixing powdered milk. Brings back memories!
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Old 05-28-2011, 07:25 PM   #56
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...
My folks splurged on college - even sending their daughters (why would a girl go to college?!). Church related and subsidized four year school.
...
Off topic, but girls/women comprised about 40% of college students from 1900 to 1970. This percentage dipped slightly after WWII, but this wasn't due to fewer women going to college. It was due to more men going to college under the GI Bill. Today, women comprise about 60% of college students. Women have been "equally" represented in college for at least 100 years. It would have been unusual if your folks sent their sons but not their daughters.

I'm of the belief that the middle class, however they are defined, is far better off today than they were 50 years ago. Many of the items we take for granted today did not exist or existed in small numbers in the recent past. Health care is more advanced. College enrollments have more than doubled. Food is less expensive due to better transportation.

When I was 6-7 (mid 60's), my father was stationed overseas. I remember a phone call between my mother and father. The call had to be set up in advance by the operator. My mother monitored the call using a watch with a second hand. It couldn't be over 7 minutes because of the expense.
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Old 05-28-2011, 09:10 PM   #57
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When I was 6-7 (mid 60's), my father was stationed overseas. I remember a phone call between my mother and father. The call had to be set up in advance by the operator. My mother monitored the call using a watch with a second hand. It couldn't be over 7 minutes because of the expense.
I still see reflections of that today. After being on the phone for a few minutes, my mother reflexively thinks about the potential expense, and often even mentions it. A gentle reminder that the calling plan is unlimited (even if it isn't) seems to help her relax about the potential extravagance of a long time on a long distance call. Old habits can be strongly ingrained.
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Old 05-28-2011, 10:39 PM   #58
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Yeah, my parents were working poor. Dad owned a small take out restaurant, Mom worked at a factory for minimum wage during the day, then worked the dinner rush at the restaurant. The kids worked at the restaurant on weekends. No car, no vacations, no a/c, no color tv, until I got to college. Left town with $100 for college, a gift from dear grandma... from her $117 SSN check. I felt so guilty, but knew it would help. Repaid her within a year.

Middle class now by many definitions, but living large compared to before.
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Old 05-29-2011, 06:12 AM   #59
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Don't worry, I'm starting to have the same thoughts. I guess none of us wants to think that we came from below average backgrounds but at least half of us are below the median!
Especially when we define 'median' as starting at the 95th percentile.
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Old 05-29-2011, 08:02 AM   #60
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We definitely were. Dad was an electrician working for the local power company. His "down payment" for the house, a two bedroom one bath Cape, was that he did not take the refrigerator that was supposed to come with the house and instead found a "scratch 'n dent" one that had a dent on the side that was going to be against a wall anyway. The third "bedroom" was the semi-finished off attic.

Our cars were all bought used, we did get some new clothes from Wards and local discount stores, but they were always on sale and we wore a lot of hand-me-downs. Getting a window air conditioner and a clothes dryer in the mid '60's were major lifestyle improvements. I didn't see the inside of a restaurant until high school. A $50 gasoline-powered lawn mower was a big deal over the hand-powered reel mower.

But we also never went hungry, although it wasn't always what we wanted.

Now DW and I live in a home with amenities that we didn't even dream of growing up. Central A/C? Dishwasher? Garbage disposal? Two-car garage? Nobody we knew had money for that stuff.

So yeah, there sure is some element of lifestyle creep and rising expectations.
At least you got to take your snapshots in color.
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