The American Dream Is Slowing Down
 

I hope I never see the day when even the children are put to work in order to meet a certain standard of living!

The American dream has always held that each generation will enjoy a higher standard of living than the previous one, and that is still true, as measured by household income.

But the generational gains are slowing, and the increased participation of women in the work force is the only thing keeping the dream alive, according to an analysis of Census data released Friday.

A generation ago, American men in their thirties had median annual incomes of about $40,000 compared with men of the same age who now make about $35,000 a year, adjusted for inflation. That’s a 12.5 percent drop between 1974 and 2004, according to the report from the Pew Charitable Trusts’ Economic Mobility Project.

http://www.msnbc.msn.com/id/18868904/

yes,

i think between capitalism and socialism I choose capitalism. at least that way you have choice...might not be the choice you want or like, but at least it is your choice and not big brothers.

not a fan of Locke, more of a Hobbes or Morganthau fan, oh and i def like that
D'Toceville (not sure of spelling)

wait... darn it went too deep again...sorry guys

I freely admit that my generation is spoiled and lazy relative to the two generations that preceded it. Has nothing to do with economy or politics. Our forefathers did such a good job making the first 25 years of our lives a cakewalk, that most are unprepared for the demands and hard work to be done in the real world...and then guys live with mom and dad until 29, and flounder in the workforce through their 30's.

I think globalization has a big hand in this. My father, a welder by trade, has been relatively lucky because he's government certified to work with galanized and stainless steel which isn't easy work. Lots of his friends have seen their jobs outsourced to third-world countries where the work is done for a fraction of the cost. You have two choices, work for less or move on.

The economy in the St. Louis area has taken a huge hit in recent years. The Boeing buyout of McDonnell-Douglas meant that tons of machinist and office jobs were lost because of redundant programs between the two companies, and the Big three automakers all had plants here. Only one does now and it's cut from two shifts daily to one. The impact is noticable. I wonder how the automakers will make money when nobody can afford their cars because the good paying jobs have been shipped overseas.

Additionally, people aren't making much more, but their expenses are much higher. Healthcare, fuel, home utilities, food, et al. have all seen dramatic increases in costs. In many cases, this is by our own design. 99% of the people driving huge SUVs don't need them. A more fuel efficient car would serve the same purpose. Consumerism is the new American way too. It's nice to have nice things, but in the old days when your TV broke, you took it to a repairman and had it fixed for a nominal price. Now you throw it out and go to Wal-Mart to buy another one.

I completely disagree with that. People of the X generation moved home because they had to not because they wanted to. In the late 70s and early 80s a person graduation from college could almost walk into a job that paid 18k-25k. Flash forward 10-15 yrs. The employment market became tighter but was still pay the same 18k-25k salary while most other cost of living items had gone up significantly. That 6k car in 1980 became a 28k car in 1995. Same 18k-25k pay but much less purchasing power not to mention getting a job straight outta school was mostly a pipe dream except for a lucky few

I wished I could have live at home and saved a few bucks when I entered into the work force. It would have helped tremendously financially but for me in the aviation biz, it just wasn’t possible.

Now we have the same people that had it good back in the late 70s and early 80s that are now well entrenched into upper management, They give themselves huge bonuses while cutting workers pay and outsourcing to offshore companies to slash costs even further.

Gen X is the first generation that will have a standard of living lower than the generation that precedes it.

Another thing to consider is the huge amount of money that is being passed on to the next generation in the form of an inheritance. Speaking from personal experience, I hope the people coming into possession of such wealth will nurture, care and grow this gift.

Vagabond's comment reminds me of a good book that everyone should read.
Parlay Your IRA into a Family Fortune by Ed Slott. The overall goal is to keep your inheritance working for you and not the goverment.

This is the biggest bunch of hooey I have ever heard or read. Just about every CPI indicates that our money goes farther today than it did a generation ago. Cars last longer; tires last longer; medicine costs more, but that's because there were fewer drugs back then (just ask yourself, would you rather have cancer in 1950 or 2005); TVs cost less; clothing costs less. Are jobs going overseas? Yeah, but new jobs are being created. And not just at Walmart. Most of the jobs that are moving overseas are mindless jobs that require little education. People find new jobs- heck, some even form their own companies. Economies change. 100 years ago we were still an agricultural society. Now, very few people are involved in agriculture. But that's a good thing- it means we are more productive.
Same with the making of cars, airplanes, boats, you name it. Most of these things require FEWER people to make one unit that 50 years ago. This is good- it means more of us can afford these items. As I wrote, times change. Should we go back to the horse era so buggy makers, blacksmiths and the like can have their jobs back?
The only problem today is that we have more "needs". When I was growing up we had 7 channels of TV (we had a bunch in NY); no cell phones; fewer vaccines (although we still had to get the small pox shot); we actually rode our bikes and walked to school if you lived too close for the bus- I could count on two hands the number of kids who drove their own cars; it was rare to fly a commercial flight; fax machines were against the law; should I go on? You can go back a generation if you want. I'll stay here.

Blackhawk, interesting comment about our "needs" of today.
I was talking with a buddy of mine and we hit on this too.

60 years ago we didn't have... Internet, cable TV, cell phones, satellite radio, iPods, GPS for our vehicles, xbox live, etc.
What i'm getting at is we have additional expenses today as a result of technology. But yea, i definitely agree with you about more jobs being created today and the higher QOL.

Walmart
 

And lets not forget about a dozen tube socks for only $1.99 !!! Things are definitely better now. Especially if you work outside of aviation.

Skyhigh

and the 12pound hardees thickburger

the technology culture
 

People are also more distracted by material things than they used to be. The proliferation of technological aids and toys has contributed to a level mindlessness that was not characteristic of previous generations. Although the standard of living is higher now the standard of personal and spiritual development is gradually lessening. There is a principle one can't get around, which is that personal struggle produces character. The difficulties of getting through the day without pleasurable distractions from technological devices used to force people to do more with less in order to get through the day.

I meet kids now that strike me as utterly empty-headed. If they even want an education, it is for making money more efficiently. I am not often very impressed by the character of kids in the internet age.

I came up in the 70's and 80's. My family did not have cable tv, internet, a car for me, or a phone for me. I had no tv of my own for most of my childhood, and when I did it was a small black and white that was fun to watch for maybe 30 minutes a week. My point is not that we were a happy family, because we weren't, but that we had a deeper sense of character than later generations seem to display.

All in all I think technlogy is a good thing and it has made life better, but people are way too enamored of pop culture and they are paying more of a price for it than they realize. They think life is about all this stuff that basically has been put forth to make money from them. We did self-enriching activities like music and sports when I was a kid, we did not sit around rapping on cellphones. It's a different culture and I wonder about it.

Every generation says this about the later generations. My only fear is that the feeling of entitlements will win out and we will become more like Europe. Looking at all of Europe, one can maybe count on one hand new companies that have been formed and have had a global impact. The barriers to starting a company there are enormous. Looking at the US, there are Apple Computer, Microsoft, Walmart... the list is long and new ones are being formed daily. Some succeed, some don't. My grandfather's company was a great and well known success and still employs thousands. My dad's company failed and he spent his later years underemployed- washing buildings, selling things (legal things), what ever it took to support 7 kids and pay the mortgage without drawing unemployment. My mom had to go back to work as a public school teacher to help. Yet they still put us all through college and they were so frugal that when my mom died there was an estate worth over $2,000,000.

Even in aviation things are mixed. Salaries are often less as free market now drives the wages, but at least we don't have the government deciding which airlines succeed and which fail. There are also more aviation jobs out there. Also, people can actually afford to fly now.

Again, a bunch of hooey. The car purchased in the 1970s cost more when adjusted for inflation, cost more to operate, and did not last as long. The engines RARELY lasted 100,000 miles, now it's a given. The tires lasted about 10,000-20,000, now they often last over 50,000. Your chances of surviving a crash in a car are MUCH better today than back then. EVERY car I have purchased since 1991 has lasted over 150,000 miles, and would have lasted longer but I traded them in. Of the four cars I have owned since then, 2 JEEPS and an Acura, the only two things I replaced were a water pump and an alternator. Yeah, my 64 Dodge Dart was easy and fun to work on, but given the choice of reliable transportation I'll stick with my car of today.
And while you're complaining about jobs moving overseas, please tell me where your cloths were made. If you fly, do you buy the cheapest shirts and publications bag, or American made ones? (Personally, when it comes to my publications bag, flying shirts and work shoes, I go with quality. Underwear, t-shirts and socks, I go cheap). The workers who have their jobs moved overseas don't just stop working- they find new jobs. Usually they are better jobs than the mindless and hard manufacturing jobs they had.
People lived at home then because they could and their parents let them. Most people I knew chose NOT to live at home, but it meant paying someone rent and getting a job. Jobs were available, just not the jobs people really wanted.
The alternative is the government getting involved in the job market and the economy. You DON'T want that. I remember visiting Spain on R&R several times in the mid 1990's. Unemployment was over 25% thanks to government interference in the markets. That's worse than in the US during the depression. No thanks.

old people are not stupid
 

Of course every generation says my generation was better in some way because the known is easier to understand and appreciate than the newer, unknown culture is. But that does not mean they are wrong, although they may be overlook a few things. Old people are not as stupid as they seem (just kidding). The present generation has better opportunities for education, wealth, health, happiness, comfort, and security. However the present media-saturated culture tends to produce a type of person who very is pop-culture oriented and does not think originally or individually. Pop culture generally swings to the commercial and the mediocre; this is what makes it pop culture. People who are saturated with it- as more are now than ever before- know less about better ways of living.

There is a parallel thing, that technology brings a higher level of comfort and standard of living. As silly as it may sound, I have to say that this is a formula for satiation and complacency. If people who are not stirred to ask deeper questions as with say, a world war or a vietnam veteran, do not now to ask about deeper meaning and deeper enrichment of the self than they otherwise would. I am not for going backwards in lifestyle, I embrace innovations and recently got a palm pilot which I have no idea how to turn on, but I think there is a loss as technology insulates us more and more from the natural world.

I agree. Much of what the "greatest generation" contributed had much to do with the work they had to do... making it through a depression; nothing like fighting in a war to help you figure out what is important.
Things are easier today than they have ever been (unless you are in Iraqistan); yet we complain about how hard things are.

Well my philosophy is, deal constructively with trouble and grow from challenges it presents, but don't seek it out as it will find you.

This is an article about baby boomers delaying retirement. Another perspective on this issue.

http://www.msnbc.msn.com/id/19173780/

I have a few theories on this. On the idea that this generation is lazier- Capitalism has made things easier for us through advances in lifestyles. That is what capitalism does, it creates things to make life easier for us and sells those things, so naturally we have all gotten used to things being easier. So we're not really lazier, just a little more spoiled. Also, I think that the booming housing market since the 80's is indirectly contributing to the downfall of the family. In other countries, people aren't building new communities at the rate that we are here. In most of Europe, people stay with the parents, or families live in houses for generations and don't have to worry about a mortgage payment as much as we do here. So because every new family has a mortgage payment to worry about, most families have 2 working parents, which in turn makes it harder to raise a child properly. And I also think that capitalism has a natural lifespan, and we might be reaching near the end of it. It all starts out even stevens, and then as everybody says, you need money to make money in capitalism. The huge gap in the high class and the middle class isn't bush's fault, it isn't clinton's fault, it's nobody's fault. it's just the natural cycle of 2.25 centuries of free market and asset building working. the more money you have, the more money you can make by not having to take out loans to start new businesses, paying cash for everything and not having interest payments to worry about, and just controlling an ever growing portion of the nation's wealth. I'm not saying that nobody has a chance anymore, because anybody can make it. I just think it's a little tougher now for the little guys. I'm no economist, but that is what I believe.

Show me your refrences about how far the real dollar is worth today vs 20 yrs ago

Real income per household member rose to $22,966 in 2003 from $16,420 in 1983 (in 2003 dollars)--a 40% gain.

http://www.cato.org/events/powerpoin...441_graph7.pdf

Here is the link to the Cato institute rebutle to the Pew article:

http://www.cato.org/pub_display.php?pub_id=8274

Here is a good quote about this from the article:

"The Pew-Brookings paper claims we face "rapidly growing income inequality" because "the Congressional Budget Office (CBO) finds that between 1979 and 2004, the real after-tax income of the poorest one-fifth of Americans rose by 9 percent, that of the richest one-fifth by 69 percent, and that of the top 1 percent by 176 percent."

What happened for several years after 1979 was dominated by horrific inflationary recessions from 1980 to 1982. From 1988 to 2004, by contrast, the CBO says the poorest one-fifth saw their share of after-tax income rise from 2.7 percent to 3.4 percent, while that of the top fifth fell from 59.3 percent to 57 percent and the share of the top 1 percent was unchanged, at 13.4 percent.

On the day of Mrs. Clinton's speech, Brookings Institution senior fellow Ron Haskins wrote about "The Rise of the Bottom Fifth" in The Washington Post. He noted that from 1991 to 2005, the real earnings among the bottom fifth of families with children increased "by 80 percent, compared with around 50 percent for the highest-income group and around 20 percent for each of the other three groups."

Trust me, I grew up in the 60's and 70's. I came from a poor family of 7 kids. We're far better off today than we were then. If there is a problem, it is the inability of people today to save. Too many "necessities".

The above points out how careful you must be for taking at face value what you here in the media, especially NPR. For example, in addition to hearing "The rich are getting richer and the poor are getting poorer", we often hear that there are 48,000,000 uninsured Americans, and we take this as the truth as we hear it on NPR,CBS, NBS, ABC and FOX ALL the time. So I went back and hunted down the question that was asked to get this number.
The question asked by the Current Population Survey (CPS), was not: "Are you currently without insurance."
The question asked WAS: "In the past 12 months ending two months ago, have you ever been without health insurance."
First, it was found that many answered this question incorrectly (people answered negative when they had health insurance through someone else).
Second, since we are talking about a long time from (12 months), many people who anwer this question correctly currently have insurance. It was found that this number is over stated by at least a factor of 2. So when you hear numbers thrown around on the TV and radio, don't just believe them. Find out where they came from.

http://data.bls.gov/cgi-bin/cpicalc.pl

$16,420 in 1983 has the same buying power as $30,344 in 2003.

Looks like real income per household member in 2003 is only 76% of what it was 20 years earlier.

The real income figures are already adjusted for inflation--that's what the "real" part means. You have inflated the figure a second time.

I've been thinking about this too. Haven't read the book, but have been working on a plan that would allow my estate to give each of my grandkids/great grandkids say $10,000 at birth to be invested. I haven't done the math as $10,000 50 years from now obviously is not what it is today, but take XX amount of dollars given to each child at birth, invested in the market for 60 years, and my estate has ensured that future generations of my family will at least be provided for their retirement. It would have to be structured in such a way as to allow the estate to grow enough between generations to provide that payout to each successive generation, adjusted for inflation, and continue on indefinitely.

Yeah, and that obviously doesn't include people who have access to insurance but for whatever reason choose not to accept it, or those who are self insured.

Please be sure to ask your lawyer about the Rule Against Perpetuity and if it applies in your case.

Rule Against Perpetuity? Somebody actually came up with a rule against that? WTF? Social Security is going to be defunct, I have an idea that will keep my family forever off the dole, and its illegal? Wow, I guess I need to throw out this bowl of wheaties, they taste like #$%!.

I'm off to google the Rule Against Perpetuity...

I was just giving you a bit of friendly advice. There is no need to be antagonistic and use four letter words. And I didn't make up that rule; it's been around for a very, very long time, and there's a reason for its existence. I am not saying your situation with your estate falls into its purview. I am merely suggesting you ask your lawyer because many do not understand the rule and draft incorrectly, which causes problems in the future.

We get that too...
 

No, there is not, but airline passengers frequently have the same reaction to news they do not want to hear. ;)

Well that certainly wasn't directed at you, just "the man" in general. I did look it up, and it is a common law rule that actually dates back to the 1600's. It is basically put in place to prevent people from retaining control of wealth or property for too long of a period. But from what I read regarding how it is actually used, it seems that people who were not identified in the will or trust use it to gain control of the estate from the people whom the original estate owner intended, with the technicality being that the people whom the original estate owner intended the property to go to were not yet born yet at the time of estate owner's death.

I had a similar thought. If anything hurts our personal financial situations today, it is the availability of easy credit. Combine that with the instant gratification tendencies of today's Americans and you get massive credit card debt. Repayments on this debt take up a large part of many people's disposable income.

And much of this debt results from things that we want, but don't need. Dinners out, movies, computers, ipods, fashionable clothes. This is the stuff that we risk our retirement incomes and homes for.

If the WWII generation is the greatest generation, then their kids, the baby boomers, are their opposite. This generation led to the loss of Vietnam and the rise of socialism and entitlements in this country.

From JFK's time, we now are at, "Ask nothing of me for my country, but ask me what my country can do for me."

Dinner out - I enjoy this too much to give up completely. I have cut back to once a week for dinner and once a week for lunch...

Movies - once a month. The rest of the time I enjoy my netflix..

No Ipod...No new computer...All my shopping is done at Marshalls...

I hope in the long run this frugality pays off...

_LAFF

sorry dudes, the 12pound hardees thickburger keeps on coming to mind...