Life is Harder

[dex]

I think these stories are all about when you start the comparison. The late 60s and early 70s were the beginning of the end for the one family wage earner.
BUT HERE IS THE KEY - The one family wage earner lasted only a short period about 35 years from the 1940s to about 1975.
Prior to that there was an extreamly small rich strata and a very small middle class which is not really worth talking about.

The vast number of people were working class - men, women, and children worked when and if they could.
I believe the USA moved from a majority of a agricutural society to a manufactuing society in the 1960s but I could be wrong about that date.

And the women that could stay at home did work - just think about life without the modern conveniences.

So we keep measuring ourselves against a very unique period in history.
Now we are moving towards what was the norm or mean in the past.

 

[MasterBlaster]

Now we are moving towards what was the norm or mean in the past.

You have a point there. However the norm for most of human history is pretty miserable except for those near the top.

If you compare whatever your situation is to someone living in a mud hut then you've really got it pretty good. Count your blessings !

 

[peorth]

I'd note that it's also a lot easier to relocate to a cheaper place to live today. Unlike the old days when you had to show up to the factory or company for work, today you could telecommute and work remotely for many jobs. If you can save a decent amount of $ in the US, you could retire early in another country easily. Many countries now offer "retirement VISA" programs. As Americans we still have many options to get out of the rat race, but only if we're willing and able.

Also, I think you can't just depend on your job now. You need to invest and find ways to generate additional income on the side.

 

[Rustic23]

DW and I have driven across the country 9 or 10 times at least. Two things always come to mind as the most amazing things our ancestors did.

1. Take a look at the country they crossed. Some of the 'gullies' are 50 t 100 feet deep. No roads, no water, trees so thick you can't see through them, Indians, scorpion, snakes, (chiggers across Texas). And, we get tired doing it at 70 miles per hour.
2. They did it without a psychologist or counselor for the kids.

How did they survive!

 

[gettingthere]

Here's what stood out to me in that article:

''So what's the problem? Why do so many middle class Americans with so much stuff say they feel so squeezed?"

I think a lot of money is spent on things that seem essential now, that didn't even exist a few years ago.

all the newer tech stuff -- Computers, cell phones, cable TV, IPods, microwave ovens....

"Back in my day" .... we were lucky to have one car per household, one television in the house (ours picked up 2, sometimes three stations), one phone - and that was rented from the phone company, etc.

People consider a middle class lifestyle to include more possessions now than existed in the past. Spending on all that stuff leaves less to spend on the real essentials and less to save.

We are constantly bombarded with ads and images from television and movies that make all the new stuff seem essential - like our lives are somehow incomplete without it all.

Except for my computer and high-speed Internet connection, that is. That stuff really is essential!...

 

[UncleHoney]

Ah, lets see........

1970
24-36 month auto loans
20% down 20 year mortgages
maybe a gas credit card

2007
up to 84 month auto loans
no money down 30 year mortgages
cell phones
cable tv with the $150 sports package
computers
high speed internet
more credit cards than will fill the average wallet
$1.00+ bottled water from vending machines
$4.00+ cups of coffee

 

[MasterBlaster]

Those 1970 autos were pretty much only good for 36 months or so.
Mortgage interest rates in 1979 were what 18 percent. What a deal

You can make the case for 7 year car loans now based on improved quality.
Just try to find a no money down mortgage after the sub-prime meltdown
you have a point with cell phones, cable TV, and internet. However that must be contrasted with the steep decline in telephone rates.

Drinking bottled water is perhaps a much better choice than drinking soda.

 

[Kronk]

Is this type of "stuff" bloat part of the CPI? I did a quick search, but nothing was obvious. For instance, are cell phones in the CPI?

 

[novaman]

The thing that struck me about the article was that no mention was made of the largest single item increase in the chart comparing 1970 and today....

TAXES!!..it was there in the chart but wasn't brought up in the article. hmmm....

 

[Bestwifeever]

I seem to remember from filling out early tax returns that interest earned on savings was deductible, as was interest paid on credit cards, car loans, etc., in the mid-70s, too.

 

[dex]

You have a point there. However the norm for most of human history is pretty miserable except for those near the top.

You got my point. If we don't identify the issues we can not address them. (Same with global warming in my view - it is population but that is another thread.)

It really has been a short time (when you take the long view) that there has been a large middle class. It is getting smaller and reverting to the mean.

So how is the trend reversed? I'll be dead before anyone asks the question.

 

[laurence]

Hmmm, I seem to remember from some class in college that part of what made the Renaissance "The Renaissance" was the birth of a significant middle class. Now putting aside what % of the population constitutes a significant middle class, I think it's safe to say there is a half millennia history of a middle class, and it's an integral part of a stable society. I will say I've seen ample evidence here and elsewhere that the 1950's and 60's were better for the average American due to being the "market of the world", but a significant (there's that word again) portion of Americans have enjoyed what was considered in their time "a good life". And that's really the definition of middle class, right? I mean, basic necessities are met at a pretty low level. If a good bowie knife and a leather saddle are luxuries and you have both, aren't you living the good life? Perhaps we will float down slowly, or standard of living will rise only slightly for the middle class over the coming decades to bring things back to equilibrium. No riots or ruinous societal collapse needed.

In fact, perhaps definitions are in order before we move further. Is middle class measured as anyone living above the poverty level?

 

[Milton]

The one family wage earner lasted only a short period about 35 years from the 1940s to about 1975. Prior to that ... [t]he vast number of people were working class - men, women, and children worked when and if they could.

Yes, quite correct.

Personally I think it's silly to suggest that times are tougher now than previously. In the not-too-distant 'good old days' (say, 65+ years ago), things were better for the very rich because they could pay servants next to nothing, and buy goods that were cheap because made by workers earning very little. But the great majority of people were caught in a true poverty trap: they could not afford higher education (for themselves or their children), had minimal savings or possessions, had essentially no retirement prospects, and had no choice but to work long hours in rather dismal and often dangerous conditions.

If we could tell our grandparents how "tough" things are now, they would laugh at us!

 

[Texas Proud]

One of the things that get me is how many people who are above middle class THINK they are middle class and are struggling... I know some people who make over $120K as a family and don't save anything... and they say it is tough being middle class... when I say they are upper middle class they look at me funny...

But, two kids in private school... two very nice cars.. a large house (but average for today), $500 electric bill (say what).. he golfs all the time which costs say $100 per week.. eat out all the time..

So middle class was not easy street back then and is still not easy street today.. but it is not poor...

 

[wcv56]

Easy to sum it up, go back to one bathroom in most houses
for a family of 4+ with most working labor intensive factory jobs.
Can't remember any families that did not have a mortgage
and us kids had shared bedrooms. Ward robe was 3 pair of each and a set of play clothes, one pair of sneakers for all sports. An unscheduled day off school was great because it meant a day of shoveling snow to make spending money. My first bicycle took a whole summer of mowing lawns and bailing hay on the weekends. The average 16 year old might of had a ride that week in the family car. Oh how we know how rough it is today for most.
Oh yeas the days before monochrome
Welfare was live with who ever you could and pick up donated food.

 

[W2R]

Easy to sum it up, go back to one bathroom in most houses
for a family of 4+ with most working labor intensive factory jobs.
Can't remember any families that did not have a mortgage
and us kids had shared bedrooms. Ward robe was 3 pair of each and a set of play clothes, one pair of sneakers for all sports. An unscheduled day off school was great because it meant a day of shoveling snow to make spending money. My first bicycle took a whole summer of mowing lawns and bailing hay on the weekends. The average 16 year old might of had a ride that week in the family car. Oh how we know how rough it is today for most.
Oh yeas the days before monochrome
Welfare was live with who ever you could and pick up donated food.

And don't forget, one car per family. Most middle class families did not have two! Now in 2007, my middle class neighbors across the street have four and only two drivers, as far as I can tell.

And most middle class kids wore hand-me-downs their whole life when I was a kid. Even though I was brought up in an arguably upper middle class family, I remember being excited when I could get Melissa's hand-me-downs instead of someone else's, because Melissa had the best stuff! I think a lot of today's kids wear new clothes.

 

[kcowan]

I think there are people living a middle class life but not making enough money to support it. That seems to be the root cause of the debt crisis.

 

[Orchidflower]

I have to stand with Rustic23's position on this one. Every time my aged 89 y.o. mother watches her cowboy movies in black and white on tv, I ponder just how women made it in the pioneer days, how many were left without men around at some point, how many were raped, how they tolerated childbirth with no anesthesia and no midwife many times...and WE have it hard. Pfffft.....crazy talk!

 

[kombat]

I think life is definitely harder for the current generation.

My parents were born in the early 50's. My dad was 23 when I was born, 26 when my brother was born. He got a blue-collar job at a tire factory, while my mom stayed home and raised the kids. He bought a decent 3-bedroom, 1 bathroom bungalow 10 minutes outside of town. We took regular vacations, although not extravagant. I got to go to Disneyworld twice as a child.

Even raising 2 kids on a single income from a blue-collar job, he was able to pay the mortgage off in 12 years. Does anybody reading this honestly think that's even remotely possible these days? I certainly don't.

To top it all off, he had a company pension (as did everyone else back then) to bank on, so he didn't have to save for retirement. Nevertheless, even after feeding a wife and 2 kids, and paying down a mortgage, he still had money left to invest, which he did. He retired early, at the age of 52, after working at Michelin for 30 years.

Now, contrast that with my current life. I'm 32, and I work in a well-paid white-collar job, as does my wife. We have no kids, 29 years left on our mortgage, and no pension to fall back on. The biggest problems, in my opinion, are housing and pensions.

Our housing is way, way more expensive than our parents had to deal with. And it's not because we live in a McMansion - it's simply not possible to find a house within 10 minutes of town for less than we're paying, unless you're willing to live in a high-crime area.

Pensions have gone the way of the Dodo bird. Unless you work for the government, or have a job with a union, you don't get pensions anymore. Everyone is left to fend for themselves. I believe this is setting my generation up for nothing short of total disaster. I see people my age all around me, running up credit card debt and not saving anything for retirement, and when asked about it, they just say, "well, my parents lived like this and they're happily retired now, so I'm sure it will all work out somehow for me too." No, it won't! They had pensions!

In this day and age, I do not believe it would be possible for someone working a blue-collar job to raise a family, pay off a home in 12 years, take vacations, and retire early. It's simply mathematically impossible. So I believe that yes, my generation has it much harder than my parents did.

 

[MasterBlaster]

getting back to the original post

here's more fodder to stoke the debate. MSN continues with a related article on the economic squeeze of the middle class:

Who or what is the middle class? - Gut_Check - MSNBC.com

 

[Razor]

I think life is definitely harder for the current generation.

My parents were born in the early 50's. My dad was 23 when I was born, 26 when my brother was born. He got a blue-collar job at a tire factory, while my mom stayed home and raised the kids. He bought a decent 3-bedroom, 1 bathroom bungalow 10 minutes outside of town. We took regular vacations, although not extravagant. I got to go to Disneyworld twice as a child.

Even raising 2 kids on a single income from a blue-collar job, he was able to pay the mortgage off in 12 years. Does anybody reading this honestly think that's even remotely possible these days? I certainly don't.

To top it all off, he had a company pension (as did everyone else back then) to bank on, so he didn't have to save for retirement. Nevertheless, even after feeding a wife and 2 kids, and paying down a mortgage, he still had money left to invest, which he did. He retired early, at the age of 52, after working at Michelin for 30 years.

Now, contrast that with my current life. I'm 32, and I work in a well-paid white-collar job, as does my wife. We have no kids, 29 years left on our mortgage, and no pension to fall back on. The biggest problems, in my opinion, are housing and pensions.

Our housing is way, way more expensive than our parents had to deal with. And it's not because we live in a McMansion - it's simply not possible to find a house within 10 minutes of town for less than we're paying, unless you're willing to live in a high-crime area.

Pensions have gone the way of the Dodo bird. Unless you work for the government, or have a job with a union, you don't get pensions anymore. Everyone is left to fend for themselves. I believe this is setting my generation up for nothing short of total disaster. I see people my age all around me, running up credit card debt and not saving anything for retirement, and when asked about it, they just say, "well, my parents lived like this and they're happily retired now, so I'm sure it will all work out somehow for me too." No, it won't! They had pensions!

In this day and age, I do not believe it would be possible for someone working a blue-collar job to raise a family, pay off a home in 12 years, take vacations, and retire early. It's simply mathematically impossible. So I believe that yes, my generation has it much harder than my parents did.

You have some good points. I was born when your Dad was and am planning on taking early retirement when I am 55. Pensions are disapearing. In fact the company I work for has eliminated it for new hires. They have provided a pension for the last 50 years. Those just starting will get 401K with company matching $1000 per year. The days when you got a job out of high school, work there for 30 years and retire on a pension are just about over.

 

[aenlighten]

Not only do the wealthy think they are middle class

but the working poor also believe they are, and the mode of the income distribution has always been among the working poor. The increase of working women has increased household incomes somewhat but also decreased the income of working men, so better or not is a relative measure.

The post war era was a time of great prosperity, the baby boom is proof of that. If things were really getting easier, we would be having more children and those children would be costing us less and still afford whatever else we deemed necessary. That the birthrate is below replacement and is only keep up through immigration indicates to me, whatever the fiscal reality, people do not believe themselves to be better off. This is an area where perception is reality.

 

[aenlighten]

One of the large differences

between than and now is couples can afford to divorce, which was almost unheard of back then. Divorcing and living alone cost a lot more, but how much better off does it make us? The costs of not divorcing were nonmonetary for the most part while the costs of divorcing are monetary, and while it is deemed worth the cost, it doesn't improve our material existence.

 

[W2R]

between than and now is couples can afford to divorce, which was almost unheard of back then. Divorcing and living alone cost a lot more, but how much better off does it make us? The costs of not divorcing were nonmonetary for the most part while the costs of divorcing are monetary, and while it is deemed worth the cost, it doesn't improve our material existence.

Divorce improved my material existence, in that more money goes towards the things I want. Sure, the income is less, but most of that was being thrown away on things I did not and do not value.

Although for me divorce meant losing everything and starting over, after just a couple of years it paid off for me financially even though his earnings were more than mine. It's not what you make - - it's what you do with it.

 

[samclem]

So I believe that yes, my generation has it much harder than my parents did.

It's probably true that today's 30-50 year olds have a tougher time than similar age groups did in the 50s-70s. The 50s-70s were a blip, focussed largely in the US and it existed only for that brief window. As we've discussed elsewhere, it was largely a result of perturbations caused by WW II.

Now, a more important question: Have we dipped down below the starting baseline of that "blip?" Do families today have it harder than families of the pre-war US? I think it is clear that things are much better economically and in many other ways than they were at that time. The multi-generational trend toward greater prosperity is clear. Still, if worker productivity gains in the rest of the world continue and if US worker productivity continues to fall while US taxation/debt burdens grow, we are setting the stage for real (not just relative to other nations or our parents) declines in US living standards.