So the U.S. standard of living is getting crushed, and the trend shows no sign of abating. That, at least, is the case according to this article:
TheStreet.com: US Standard of Living Down 50%+ Since 1970
As I wasn’t even around in 1970, I certainly can’t make any sort of personal-experience comparisons to the average standard of living (SOL) then and now.
(Though I can pretty much state, unequivocally, that rock ‘n’ roll music was far better then. In that regard, I’m pretty confident that we’ve seen a decline in quality FAR greater than 57 percent. But I digress.)
The article’s an opinion piece, and clearly marked as such, but right here’s where the elephant steps on your toe:
Using the year 2000 as the numerical base from which to “zero” all of the numbers, real wages peaked in 1970 at around $20/hour. Today the average worker makes $8.50/hour — more than 57% less than in 1970. And since the average wage directly determines the standard of living of our society, we can see that the average standard of living in the U.S. has plummeted by over 57% over a span of 40 years.
Hmmm. Reminds me a lot of what I read in The Two-Income Trap back in 2003, except that this guy uses words like “rape” and “parasites” to describe the treatment of “average” families today by Big Business and the government. (Not that I necessarily disagree in all cases. ‘Cause I don’t.)
But here’s the part that totally lost me, where our esteemed author is discussing structural unemployment:
Technology always eliminates jobs faster than it creates new opportunities. This means that our economies are permanently reducing jobs (and creating structural unemployment) every day, every week, every month, every year. For more than 200 years, our governments have dealt with this permanent structural unemployment problem by shortening the work week every few decades…until now. The refusal of our governments to shorten the work week (while we have the worst structural unemployment in history) is a deliberate attempt to maintain massive unemployment — which is the strongest downward driver of average wages.
Uhhh … say what? I mean, I know the PC revolution was pretty hard on typewriter makers and all, but … say what? And how does shortening the work week help increase average wages? (For most folks I know, if you’re not working, you’re not getting paid — politicians and welfare fraudsters excluded, of course.)
Oh well. It’s late, and I’m probably just missing something.
Like how much better the beer probably was in 1970. There’s your pinnacle in standard-of-living, right there.
Mike wrote:
After reading this article I realized I wanted to know what my personal standard of living is. It sounds like the sort of thing a person should be aware of correct?
I imagined this: a web page where you answer many detailed questions about your economic life. How many sq ft. you lived in, vehicles, appliances, servants, educational opportunities, etc. So that it took a great snapshot of your standard of living. Then compare it to others in US to get a percentile, then to all “western” nations, then to the world at large, and then to a few historic times in US 1970, 1950, 1800, etc.
It would probably be eye opening for many. I can easily find out where my income compares on a percentile basis with other Americans. But I always wonder if I am living like the bottom 25% because of the sacrifices I am making for my family’s future (and my retirement). How many other families of four are living in 1200 sq. ft. with no cable, not eating out, driving 10+ yr. old cars, etc.
AZ Joe wrote:
I was around in 1970. I feel the comparison is largely apples and oranges. Back then you made less – minimum wage was $1.25, now it is $7.50(?). In 1970 you paid $4000 or more for a personal computer – which was much more money in real income than now – and got much less machine. You paid $.89 for hamburger instead of $2.99 etc. Cars cost $2-4000 but were less efficient – we had to have cheap gas (about $.30 per gallon!) because gas mileage was awful. Also, cars were much less safe – in the 70’s 50,000+ people were killed per year in auto accidents. Today with 3 or 4 times more miles driven, less than 40,000 people are killed per year. Today many of our necessities, like cell phones and ebooks either didn’t exist or were available to a few very affluent early users. Houses were smaller with bigger families. The wonderful new thing was VHS & Beta tape recorders and 8 track tapes. CD’s DVD’s MP3 players? Forget about it. The military has a term for it: “Mission Creep.” Standard of living is a moving target.
I think we are doing OK, despite our current problems. I haven’t heard of people building fallout shelters in their basements to protect against nuclear attack for years. Is everything perfect? Absolutely not. Should there be improvement? Certainly. But let’s not whine about the “good old days.” The best part of the good old days is a bad memory.