Here’s an email that I think is worth publishing in full:
Hi John,
I am a long time Balloon Juice reader since before the days of “THE DFH’S WERE RIGHT!” conversion. I occasionally post as “Cintibud” but since I don’t post often I’m afraid it might just get lost in the noise if I posted this. However this is something that I think is very important that younger folks like you just might not realize – just how things have changed for the middle class in the last 30 or so years. I think there are a ton of folks close to my age who have a similar story but it just isn’t being examined.
I was born in 1955. My Father was never that well paid. He was a college professor at a Catholic university in the days that lay employees were expected to work for close to the same wages as the religious order that ran the University – that is, squat. However, consider:
My Mother didn’t have to work outside the house. She stayed home and raised 5 kids.
We lived in a nice house in a nice suburb – Kettering Ohio – which could have been the setting for the Brady Bunch
All 5 kids went to Catholic (private) grade and High School
All 5 kids went to College (although my Father was a prof, we only got a 50% discount at that private University, which made the tuition equal to Ohio State or any other in-state school)
None of us had to take out a student loan to pay for college.
My parents NEVER refinanced their house.
We took a family vacation every Summer.
If you heard of a family doing all that today on one income, how much would you guess the solo wage earner was making? Quite a bit more than my Father’s income, adjusted to today!
What changed? Did the US lose the cold war? Does Russia, China, Japan, Europe tell us what we can or cannot do? Has our GDP been steadily shrinking in that time? Productivity declining?
I’ll leave the above questions “as an exercise for the reader” to quote Mr. Wizard from many years ago, but you get the point.
IMO, this “decline of the middle class” is never discussed enough in personal terms, just as some hypothetical that doesn’t connect to folks under 50. People need to ask their parents or grandparents how they lived “back in the day”.
Thanks, just wanted to get that rant off my chest.
Cintibud
What changed? How were our parents able to do it, but those our age and younger are just treading water?
Joel
Housing changed.
gex
What changed is that there was legislation called the Civil Rights Act which meant that blacks now had access to becoming middle class. LBJ as much as predicted this. Atwater fessed up to how he made it happen. Melman and Steele have confirmed it via apologies. The entire anti-middle class political movement has been powered by racism.
nisl
What changed? Well, there was a revolution. A Reagan revolution.
We decided as a country that surely, if we gave the rich vast sums of money, that they would share it with the peasant class. That didn’t work any better this time then it did all the other times it’s been tried.
gex
To wit: there is a reason that fiscal and foreign policy conservatives have to court the racists, misogynists, and homophobes. It is because they can’t win elections on their policies alone.
sublime33
Housing costs were much more affordable and more realistically in line with annual income. Someone who was in the 50th percentile in pay could purchase a home in probably the 35th percentile. When I bought my first condo 25 years ago, what struck even back then was that even though my pay was probably at least in the 80th percentile (I was a corporate controller so I could gauge these things), I could only afford to purchase a first home in the 20th percentile. Unless you had established home equity or significant investment income, you could not move up the homeowner scale. This situation is even more magnified now.
Amanda in the South Bay
People just need to go where the high paying jobs are-pretty soon the only jobs paying a decent middle class wage of ye golden age will be IT, healthcare, and some motely combo of MBAs/JDs. I’m sure there are plenty of 20/30 somethings here in Silicon Valley who live that kind of lifestyle-sans house, of course, being too expensive for that here.
A Commenter at Balloon Juice (formerlyThe Grand Panjandrum)
1. One family car.
2. Smaller homes.
3. Few electronics (e.g. one TV per household, MAYBE two)
4. All but the largest of purchases (autos, homes) were paid in cash
These are but a few of my favorites for that list. But housing is the biggie. I highly recommend you watch this talk given by Elizabeth Warren.
El Tiburon
Tragically, over time, we have all become acclimated and accepting of this new paradigm for what it means to be middle-class in America.
Remember back to when that single, working mother said she had to work two (or three) jobs just to make it? George W. Bush responded, with a giggle, “That’s just fantastic…uniquely American.”
It is alarming how most Americans have simply become sheep and accepting of their circumstances.
Yet, it is war on unions and teachers and Joe Six-Pack.
Dave
The top marginal rate went from 70% to 35%. Corporate rates became riddled with loopholes so businesses don’t pay anything. The government lost revenue and Republicans turned the lower 98% of us against each other to fight for the crumbs as the top 2% filled their pockets.
benjoya
more effective class warfare.
gex
That housing stuff happened well after the changes to the middle class started happening. That’s merely a symptom of what changed, not the thing that changed.
Ash
The cocaine did it.
matryoshka
I’m about the same age as the writer of this letter–just got my AARP card yesterday! WOOT! What Cintibud says is true. Anecdotal evidence or not, my mom & stepdad had 3 kids and bought a house and a car and bountiful Christmases, and we kids had no idea that we were actually “poor.” The cost of living has ballooned, housing costs more, and people seem to need more stuff either to function or to feel like they’re getting anything at all from their wage slavery: big TVs, cell phones, computers, etc. Incomes have stayed flat or declined. I think the world has become a meaner place, too. I can’t imagine opening the door to beggars and trying to feed them something the way my grandmother did in the Depression. We have, as a culture, become almost disdainful of actively caring for each other. Thanks, Republicans!
Joey Maloney
I wonder how much of this change – apart from all the deliberate government policies to foster greater income inequality – is due to the Boomer demographic moving through the system like a pig in a python?
Every age cohort they move into, there’s a large and fairly rapid change of lots more people chasing after a commodity – college places, housing, and now advanced medical treatments – whose supply wasn’t boosted with the same speed.
Seanly
Wages have not kept pace with inflation.
Workers (blue & white collar) made these great gains in productivity, but saw nothing for it.
We’ve been hosed for the last 40 years.
Chris Gerrib
Two thoughts:
1) As mentioned above, we bought a lot less “stuff” for our houses, and smaller houses.
2) As discussed in great detail here, much of the last 30 years’ growth in GDP did not go to higher wages for the middle class.
Alwhite
My dad worked in a factory for 50 years (15 – 65) and managed most of the same stuff with 6 kids (no private schools).
I read a thing recently about a woman whos dad worked as an iron miner in Northern Minnesota. She was born in 1962 and her unionized dad made the equivalent of $60k (adjusted for inflation to today). He sent her to college so she could have a better life. She and her college educated husband work for large corporations that have gone through cut backs, reduced hours and pay cuts. Together they make about $60k. That exemplifies what is wrong with America and why we may never recover from our current death spiral. Its not taxes, its not the government, its the Masters of the Universe grabbing a bigger piece fro themselves and screwing this country and its people.
c u n d gulag
It’s really not that difficult to understand. This is overly simplistic, but here goes:
The economy was booming, and the Federal Government had its tenticles in everything from local education, local and state roads, to the price of cable TV in your town.
High tax rates of over 90% on the hightest earners allowed money to be distributed more fairly across a wide swath of the population. Infrastuctrure jobs were plentifual, what with all of the roads, bridges, and airports being built.
Then, came the Reagan Devolution. And that was only slightly slowed down by Clinton, who was shifted away from the left to the right because of the economic mess left after a dozen yearsof Reagan/Bush.
Since 1981:
Deregulation.
Eliminataion of the “Fairness Doctrine.”
A shift in most favored tax status to the wealthy, and away from the middle and lower classes.
Going from a manufacturing to a market and consumer-based economy.
Acceptance of greed as a motivator.
Shift of power to corporations.
Media consolidation.
Well, the list is long.
Technology has been a great boon, but it has also cost millions, if not 10’s of millions of jobs.
I was born in 1958, tomorrow my birthday as a matter of fact, and I don’t recongnize this as anywhere close to the country that I grew up in.
And it’ll only get worse if we don’t do something to stop it. But with an ignorant public, a complian media, and constant right wing talking points on almost every radio and TV channel, I don’t hold out much hope.
cintibud
Thanks John!
I don’t have a lot of time (supposed to be working now) to post comments but I am interested in seeing what folks think. However I can’t stop thinking of this whenever I see the stats posted on how much income has flowed to the upper 1%. To many folks that may just be a number and to those who don’t support liberal goals it may be explained as “just made up”, but when you look in real terms it’s clear that while this country has gotten more wealthy over time, the benefits just aren’t shared.
Bud
Yevgraf (fka Michael)
I was thinking something along these lines just this past week, only I was considering the reasons why I’m trying to juggle more decisions in my day despite the automation.
gene108
Things cost less.
I don’t have time to look it up, but we’ve made things more sophisticated – cars, T.V.’s, houses, etc. – that adjusted for inflation, all those extras drive up the price for one of those items, versus what it was in 1955.
Average wages haven’t kept up with inflation, which has hurt disposable income and we’re buying a 3,000 sq. ft. house versus a 1,500 sq. ft., which pushes that diminishing disposable income into paying for housing, rather than taking a vacation every summer on one income.
It’s sort of a double whammy.
mac
The real estate market totally changed.
Bigger, far more expensive housing, takes a bigger cut of income.
Also, adding women to the work force had an overal negative impact on individual salaries.
John
The easy availability of credit is a major factor. Banks suckered people into buying things on credit and created a never ending loop so that people were always in debt, and where a lot of at least one person’s income in the family went just for interest. Yes you can blame the victim, but back then (I am just a little older than the writer) the ability to buy a lot without having to pay at the time, was something a lot of people couldn’t resist.
wvng
@A Commenter at Balloon Juice (formerlyThe Grand Panjandrum): Exactly right. We lived a hell of a lot more modestly, and the things we needed to buy were priced at a level that was affordable with a single wage earner.
As for the letter, I had almost exactly the same conversation with a young fella who works for me last week. At the core, it now takes two incomes for most families to make enough money to even begin to have a middle class life style, and that lifestyle is funded through debt.
Bud
I have often wondered what changed. My parents raised ten children on my dad’s salary as a suburban city official and while we had few luxuries, we were never hungry and always had clean clothes.
If someone could explain this in clear terms, it could revolutionize American politics.
Martin
College is one of the things that changed. It used to be you could get a decent job without a college degree. If you worked hard and could apply your talents, you could rise up pretty high. My stepfather’s father never went to college – started in the mail room at 16 and retired as a senior VP of a major airline. You can’t really do that now. You can maybe go the Steve Jobs route and build your own empire, but good luck rising in the ranks at HP without a degree.
Basically, that degree has turned into the lynchpin for being middle class or not. If you at 17 weren’t motivated enough to go, take on the loans, work a job to pay your way, etc. and graduated, then you’re not middle class material. There’s pretty much no going back and correcting that either.
Now, I’m strongly in favor of education, but that college degree is turning into a big problem. Students and parents don’t see education as education, but as a necessary step to avoid poverty. And when you view education that way, it’s not enough to just study and do well in high school. You need the two sports, 4 volunteer experiences, awards, and on and on. And that’s leading to all manner of bad (and expensive) decisions. I don’t blame parents and kids for playing the game, because, well, that’s the game. The unemployment rate for college educated people right now is 4%.
Is that college degree needed for many of these jobs? Well, no. But you can demand it and get it anyway, and that’s seriously skewing the labor market.
gnomedad
Another factor: post-WWII, lots of pent-up demand here and the rest of the industrial world was trashed.
Linnaeus
In the case of my family, there are multiple factors, but one stands out in particular:
We had a union.
Because of that, two successive generations were able to afford houses, support their families, and send me off to college (I’m the first in my family to have a college degree). The pensions my family earned helped them maintain a semblance of a decent life after retirement, particularly when your body’s broken down and you lose your hearing (my grandfather required a hearing aid from the time he retired to his death because of 30 years of working in a forge plant). Those same pensions keep my grandmother above the poverty line and my father in his house after his 401k tanked.
That – among other reasons – is why I support unions. Yes, they’re flawed. Yes, they screw up sometimes. But in the end, they’re the only vehicle we have for people to have some power in the workplace, where we spend at least a third of our daily lives (and nowadays probably more).
trollhattan
I’ll get my snark out of the way first: my folks didn’t have pink Himilayan salt, nor a year-round supply of endive (bet you thought I was going to say arugula).
Housing costs, medical costs, transporation costs, education costs–as a percentage of income–I’m betting were much more reasonable.
My experience was similar to your correspondent’s–middle class, father with steady blue collar job that paid similarly to white collar professionals in the neighborhood. Although my mom did work part-time to help make ends meet.
Most medical expenses were paid out of pocket and we all had regular, very good medical care (and two of us ingrates had braces). College educations for the kids and I was the only one to graduate with any loans–a balance that would probably cover three semesters of books today.
Easy credit made expensive (overpriced) houses and expensive cars possible for nearly all. Wages stagnated. Medical insurance–a relatively new invention–helped jack up medical costs an order of magnitude and a university education has repriced similarly. There are those who argue these things are “nice-tos” but not necessary for a decent life today. Those are people I’d like to smack around, a bit.
Shinobi
Man, I can’t even imagine that. I mean I grew up in the 80’s and 90’s and we had all of that (with 2 kids, both in private catholic prep school, an college), but my family was comparatively well off.
Now I’m an adult and I’m just trying to support myself and my unemployed boyfriend on a slightly above median salary. We haven’t been on a vacation together since before we moved in together 5 years ago. There is always some expense and it seems like we can never get ahead. I can’t imagine being able to do this with kids.
It isn’t just the housing prices, it is the everything prices. Food prices are so high, I didn’t even realize how much I was paying at the grocery store until I started buying my essentials at Aldi. The food is lower quality, but at least the milk isn’t $4 a gallon.
Studly Pantload
Krugman examines this (the change in the status quo of the middle class) in detail in his “Conscience of a Liberal.”
In a way, it’s kind of funny how elements of both the Left and the Right look to the post-war period as a sort of Golden Age for America. The Right, because these were the days of unchallenged white privelege – the Left, because it was the Zenith of middle-class prosperity.
Not trying to imply there’s some sort of sinister connection. Just pointing at the paradox.
WyldPirate
I’m about the same age as your emailer and grew up in much the same circumstance.
My Dad had a high school education, was a journeymen millwright then a maintenance supervisor for Ford Motor company for 44 years. Mom never worked. Lived in a neighborhood much of the time with Ford employees. there moms didn’t work. visit to the doc cost nothing, dentist and vision coverage next to nothing.
My dad mostly maxed out SSN withholding every year due to overtime. Most of those jobs are gone now as well as the union benes that motivated suppliers to have to pay their people a living wage and provide benes.
there wasn’t as much shit to waste money on back in the 60s and 70s. Not as much to do, no fucking fast food restaurants on every corner to piss money.
As a personal story, I worked at the Ford Plant as a summer employee two years between college. Was making a wage the equivalent of 60K with benefits three days out of high school. As an adult with a MS and A PhD and as an officer in the army for three years on active duty in the 35 years since I worked at ford those two summers, I have yet to make the equivalent in salary and the benefits were never in the same league by a long shot
Jon O.
Obviously, it’s that we’ve lost the drive to succeed, because of Government.
BGinCHI
The only answer that makes sense is that America is like Lost. We all died in a nuclear holocaust and are being kept alive, with lots of anxiety and challenges, on the “island.”
Soon (in the last season) we’ll all regain our memories and the rich will hug us and give us our money back.
Plus polar bears.
JPL
IMO Most salaries haven’t kept up with inflation. Housing, health care and the cost of education have climbed dramatically. It would be interesting to see how much Cintibud’s dad would be earning today if you factored in inflation.
stuckinred
@matryoshka: Can you imagine being lured to California to work in the fields only to find 10 people for every job. Can you imagine Henry Ford calling out the Detroit cops to beat your fucking head in for trying to organize? Can you imagine being a WWI vet and being trampled by US Army Cavalry for trying to get your bonus? Let’s not get carried away because your grandma and mine gave food to “gentleman of the road”.
WereBear
There are those who point out people want/are expected to buy more things these days; stuff my parents wouldn’t dream of like Internet access & a computer; cable and a big tv; cell phone packages instead of a egg timer by the phone for when we called Grandma.
Be that as it may; it is also impossible to go back to The Simple Life. Not that people can’t live without internet, cable, or a cell phone. But that even if you did; you still can’t make it on most single incomes.
Even if you are single.
They have used the Rise of the Gadgets to obscure the fact they squeeze wages and jack up prices. Jimmy Carter said “Let’s conserve for the future” and energy prices are huge compared to what my parents paid when they got married. And it’s not because I’m charging a cell phone, either.
Linnaeus
I may have posed this before, but this shortened version of David Harvey’s lecture on the crises of capitalism is worth watching.
MikeTheZ
What changed is that while the paychecks got bigger, purchasing power did not. Pay barely kept up with inflation, while housing, college and health care costs left inflation in its dust.
Ann B. Nonymous
Both home and education costs have risen dramatically since 1950 after adjusting for inflation. Here’s the Census data by decade and state for home values: Historical Census of Housing Tables
Was the average American house in 1940 really only worth one-fourth the value of a house in 2000? There were definitely national improvements in electricity and plumbing. Square feet?
suzanne
Housing is a big part of it.
I remember discussing this with my mother, because she, her father, and I all have bachelor’s degrees. We figured out this:
a) my grandparents’ house cost about twice my grandfather’s annual salary at the time when they bought it.
b) my parents’ house cost about three times my mother’s annual salary at the time when they bought it
c) my house cost about four times my annual salary at the time when my ex-husband and I bought it.
Of course, we all studied different things to get our degrees, and these houses were in different areas of the country, and were different sizes. (Though I will note that my house was the smallest and least-advantageously located of the three.) But when putting even a semi-decent roof over your head is so expensive, it makes a big difference.
Lavocat
Shit, what HASN’T changed? However, I’m with Paul Krugman on this one: the single biggest factor influencing these changes, which has been occurring since at least the mid-1970s, is none other than The Great Divergence.
There is a direct correlation between LOWERING the tax rates on the wealthiest among us – including (especially) corporations – and destroying the middle class.
Think about it: that wealth has to go somewhere. And it is: it’s leaving the middle class for the plutocracy. Welcome to the New Gilded Age.
stuckinred
@WyldPirate: FIDO, dawg!
cintibud
@A Commenter at Balloon Juice (formerlyThe Grand Panjandrum):
1) True
2) All my siblings and I live in smaller houses (no one has 5 kids though)
3) True
4) True (Parents from the Depression era)
One comment thought about the extra goodies we have now and didn’t have then. Look at the things my parents had then that they didn’t have growing up – like indoor plumbing. I don’t think my dad’s parents even had electricity before he moved out. A reliable car, etc.
Citizen_X
What happened? In the midst of a society-wide movement towards greater equality for all, capitalists realized that they could exploit American racism and resentment to destroy the middle class. The end.
Jim, Foolish Literalist
Jeebus H Christmas, where to begin? Globalization of manufacturing and trade, mechanization, air conditioning, population shifts…. but the one cultural shift that is my own personal hobby horse: Reagan was able to convince the working- and middle-classes that (largely for the reasons gex talks about above) that government was not their tool, to control and direct as they saw fit, but an external enemy, so that people like my uncles (cops and union members) would join forces with Jack Welch and the Koch brothers, and their kids would mostly follow them. See also, too, Nixonland.
I’m not actually optimistic that Wisconsin is the beginning of the pendulum swinging back, but I think it’s a possibility.
geg6
nods sagely at gex…
Yes, John. It is different. I am from a different socio-economic background than your emailer, but our situations weren’t all that different.
I was born in 1958, the fifth of six children. My father was a steelworker, who also worked a part-time job as a grave digger. For real. I remember several strikes by the USW when I was a child, strikes bad enough that the union would drop off cartons of food at our house and the man who owned the neighborhood grocery store would just hand my mother extra bags full of food after she had paid for what she could afford. However, after the difficulties of my early childhood, we lived like the Cleavers.
My mother went on to get her college degree in the mid-60s (using a small inheritance from her parents, a very, very small one). So it wasn’t until the 1970s that my mom worked outside the home. We did it all on my dad’s two jobs. Here’s how we lived:
* A nice home in a new development in suburban Pittsburgh.
* All six children went or had the chance to go to college, though we were limited to public colleges due to price.
* We took a vacation every year I can remember (probably from age 3 or 4 on), sometimes to a cabin a Lake Erie or more often to visit our relatives in Williamsburg, VA.
* We belonged to a private swim club.
* Five of the six of us went to private elementary school (parochial Catholic) and the only reason I didn’t was because I refused to go (a budding atheist at an early age).
* We had three cars: one for mom, one for dad to take to the mill, and one for Sunday best.
* My parents paid cash for my mother’s college and for the eventual addition of a second floor and garage to their home.
* Only my younger sister and I took out student loans and that was only because tuition had increased so much that the $3000 per child they had saved for college was not enough by the time we hit college age. But even then, we took minimal loans that we were able to pay off within a few years of graduation.
The income gap is too much for me to ignore. When I was a child, our next door neighbor (and my god father) was an engineer for IBM. They had a little bit more money than we did, but not enough to show. They socialized with my parents, the people down the street in customer service in the airline industry, the dentist and his nurse wife at the top of the hill, and the accountant’s family on the corner. No one cared if they wore a suit to go to work, a uniform, or an asbestos jumpsuit (as my dad wore in the seamless tube). We were all in the (almost) same economic boat, all with happy families, nice homes, and safe schools and neighborhoods.
I know this sounds like a cliche, but it really was that way. I know when I felt the change. It was the Reagan era when all that good neighbor/all in the same boat mentality seemed to leak out of my childhood neighborhood like a leaky balloon. Can’t say exactly what cause that, but I know that’s when it all changed.
JPL
Taxation should be looked at also. Sales Taxes which most states rely are regressive.
sublime33
Another difference is that virtually every type of business has been nationally franchised so that that there is no room for the independant operator. In my small town growing up in the 60’s, there was a drug store, hardware store, appliance store, general department store, grocery store, clothing store, stationary/office supply store, auto parts store, town newspaper, and a restaurant, all privately owned. Now these products are still available but run by Fortune 500 companies. And the store owners made a lot more money in relative terms than the Walgreen’s or Home Depot store manager does now.
Danton
Reagan wanted a Third World country in America to compete with Third World countries. And he got it.
B
@El Tiburon: Hey do you have a link to a video or transcript of that?
Sloegin
Women went to work. Generally a great thing, but…
Employers stopped paying 1 wage earner salaries.
Big ticket items like homes and cars were upscaled or repriced to meet a 2 wage earner market.
What was once a quite comfortable income with 2 wage earners is now ‘getting by’, and having one of those earners out of work is a financial crisis.
Ash Can
Wages simply haven’t kept up with expenses. Housing has been mentioned, and health care is another expense that’s burgeoned pretty much out of the blue compared with what previous generations saw. And there’s the explanation I’ve seen — which makes a lot of sense to me — that lowering the top tax rates served as a disincentive for business owners/managers to re-invest a larger chunk of their profits into their own businesses, growing those businesses and increasing the pay of the lower-level workers.
The know-nothing Rand cultists set this nation back by many decades by convincing policy makers to trust business leaders to do the right thing. “Rationalism” proves over and over again its failure to actually work in the real world. But it sounds good, and looks good on paper, so people fall for it. We have a long way to go to get past this nonsense and work its poison out of our political and social system. I’d love it if the current resurgence of labor unions turns out to be one of the first steps in this process.
gex
I really object to the “stuff” arguments. You guys sound like Republicans, complaining that people spend their money on TVs instead of health care. Overall, consumer products are a factor, but not a large one. It is wage stagnation along with the fact that others ARE getting richer and driving prices up via demand or hedge fund investments backed by the government.
AnotherBruce
@Seanly: Bingo! I read somewhere that if wages had kept up with productivity, the average wage in the United States would be $200,000 a year. That would be a wage that would support the entire scenario described above, and even health care for an entire family would be manageable if supported under a employer’s plan. Instead the greed class took all the benefits of increased productivity and pocketed them for themselves. This is the main effect of the long war on unions. Workers don’t get to share in productivity gains anymore.
WyldPirate
@mac:
This has had a big impact in more ways than most here will want to admit.
par4
We ran out of oil. Then chose Nixon,then Reagan over Carter,then Bush,Clinton,Bush?(appointed first time) and now Hopey/Changey. We went from the manufacturing leader of the world to credit default swaps. Worst generation of douche bags EVER!
Alwhite
Had I chose to go to the University of Minnesota when I graduated a year of tuition/fees/housing would have set me back $1500, a little less than $9k adjusted for inflation. To send my kid there this year would be about $23k. And that is cheap in the world of higher education.
They are removing the ladder up for more and more people.
marge
I was born in 1950. My mother did not work outside the home. I gave her the time and ability to be active in the PTA, synagoge and girl scouts. My Dad owned a luncheonette in Brooklyn, NY. We had 2 cars. I can remember the day my Mom got her own car. I was 4 years old and it was a very big deal. My brothers and I went to college without any loans. NY State schools cost $400 per semester.
I can remember in the early 70’s when my ex and I could have 3 kids and live on $10,000 a year. Maybe not as well as my parents, but we were young and on the way up. Ronald Reagan brought us the era of 2 working parents. In the 80’s I divorced but my single income was almost $50,000 and that was enough to raise the kids and save for college. By the time the kids were ready for college they each had about $20,000. The oldest almost got through on that. The second needed a loan in his 4 year. And the third, well forget about it.
zzyzx
IMO it’s the moving target. Take colleges for example. People got student loans and scholarships to afford tuition but instead of using that to make school more affordable for more people, they just raised their rates to make the same out of pocket fees, only now people would be graduating with debt. Mortgages became 30 years to make it so people could afford houses but then the prices went up to accommodate that. Families began working two jobs to make ends meet better and then prices adjusted so that was expected.
Linnaeus
@Jim, Foolish Literalist:
Nor am I, but at the same time I’m reminded that it’s not always obvious at the time that something happens that it’s a pendulum-changing moment. Walker could actually get what he wants here, but that doesn’t rule out that we’re seeing an inflection point after which things really do start to change. No one in 1964 would have predicted a right-wing as strong as we see today in the wake of Johnson’s landslide electoral win, and yet here we are.
Lavocat
Another point: in 2010 my own family earned approximately FIVE times what my birth family earned in 1980. In those 30 years, this disparity in earning ability has only been able to slightly raise our standard of living as compared to that of my family in 1980.
I can only imagine how bad people have it whose incomes merely “kept pace” with what their parents earned.
Another thing to keep in mind: NEITHER of my parents had college educations. Only my mother had a high school diploma. On the other hand, both myself and my wife have post-graduate degrees.
Life as we knew it, together with The American Dream, is gone and, very likely, gone for good.
Chrisd
Wages stopped keeping pace with inflation since the 1970s, period. For a time, sending everyone to work made up for the loss, then easy credit gave the illusion of prosperity. Now we’re at the end of the road.
As for all the electronic gadgets and lattes, those are sops to mask the fact that nobody is middle class anymore. Can anyone seriously argue that a flat screen is somehow equivalent to decent employer-paid health insurance, a cheap mortgage, and a pension?
matryoshka
@stuckinred: I’m sorry, stuck, but I’m not sure I get your point. Can you clarify?
Svensker
Wages stagnated.
Housing costs soared.
Medical costs soared.
College costs soared.
No, my parents didn’t have 4 TVs and the internet, like we do. But they (who had low-middle paying jobs) owned a house I couldn’t dream of being able to afford buying; they had two cars; they had a dishwasher, radio, tv, stereo, piano, and contra McMegan, a mixer, blender, etc. in the kitchen. We kids all took music lessons and went to college and going to the doctor wasn’t a thing to dread because of money, at least.
We didn’t have quite as many toys, but it feels very much to me that our standard of living has gone way down.
Re housing costs, my boyfriend of the 70s bought a condo in Seattle in 1973 for $18K. He was thrilled to sell it in 1979 for $36K. Five years later the new owner sold it for $180K. I know for a fact that boyfriend’s income did not tentuple during that period.
gorillagogo
I think most of the people who’ve already commented have hit on the major issues, but I wanted to add one thing to the list of “we buy more stuff now” that I haven’t seen mentioned. I’m 41 years old and remember my mother making all my clothes when I was young. Actually, I don’t remember the making so much as I remember spending an eternity at the fabric store while my mom shopped for various fabrics and patterns to make me something to wear. At least it seemed like an eternity when I was five.
Regardless, at some point between roughly 1975 and 1980 we started wearing more store bought clothes. Not sure if that was due to age related whining or if society as a whole just started buying more clothes.
ProgressiveATL
Hello John Cole! Love your blog, thank you for your keen gaze.
Boehner just now, “you look at the pay of public employees today and you look at their retirement benefits they are way out of line with many other working Americans.” See, the bench mark is the folks who are struggling the hardest, and until we’re all there together, there are thugs among us!
Dave nailed an important piece of it, here’s an editorial cartoon from Matt Wuerker that puts some perspective on top tax rate: http://bit.ly/c6A9or
MotherJones on our march to plutocracy: http://bit.ly/f7DuyG
AlterNet on the richest 1%: http://bit.ly/com5QR
USC on who rules America (wealth, income and power): http://bit.ly/b9v3De
Business Insider on wealth in America: http://read.bi/fIVgOD
NewScientist on why it’s hard to share the wealth: http://bit.ly/eHrtKB
What gets to me is the alignment of business and government, evident in so many directions. Corporate citizens are the new face of Americans! Out with the old! In with the new! And quit fussing, you 99%, you’re getting corporate’s shoes muddy with your thuggish dirt.
Martin
@Ann B. Nonymous: The average home size in 1940 was 700 square feet. And that was for an average family size of 6. My grandfather had such a home. He added another 700 square feet himself, but the original home was 2 bedrooms 1 bathroom, living room, kitchen. No garage.
Dining rooms were luxuries back then. When I was growing up, family rooms were luxuries. Having your own bedroom was a big deal. A bedroom devoted to an ‘office’ meant you were rich. What passes as a typical starter home today would be massive by 1940 standards.
sublime33
“Regardless, at some point between roughly 1975 and 1980 we started wearing more store bought clothes. Not sure if that was due to age related whining or if society as a whole just started buying more clothes.”
Society not only bought more clothes, but used to change their own oil, cut their own grass, got the television reception for free, etc.
Silver
@Chrisd:
It’s not the electronics. My first “real” computer was an 8088 that cost my dad more than 2k in the early 80s. I remember a brand new 386 with EGA graphics that was more than 3k on my desk as well a few years later.
My $1800 Macbook Pro is more than 3 years old now-it cost less to buy and has lasted twice as long.
the Reverend boy
Haven’t wages pretty much stagnated over the last 30 years? That would have something major to do with it also I’m sure if that is the case.
stuckinred
@matryoshka: Sure, your comment about the humanity of your grandmother being an example of the “world being a meaner place” now seems too idealistic. The world during the depression was a nasty place and the corporate and reactionary forces in this country were way more violent than they are now. My grandmother was the same way. The hobos had signs that they would leave to indicate places where a handout could be had and she was an easy mark even though my dad loved to tell me about how they ate ketchup sandwiches because they were so poor.
piratedan
greed over ethics
It used to be that there was a sense of community, no matter where your community was, be it an urban neighborhood or a budding suburbia. Toleration was key, you may not have liked your neighbor, but they were your neighbor and as such you looked out for them and they usually reciprocated. Nowadays, how many folks even know your neighbors?
Churches are now preaching hate and fear of the other more than they are spreading the message of being tolerant of each other and recognizing that the single common thread is that we all want to have a better life for ourselves and our families. Greedy folks used to be scorned as having an unwholesome trait, now its applauded and used as its own “ethical” rationale for life.
Dennis SGMM
I was born in the late Forties but I was a Navy brat so my experience isn’t quite the same as my contemporaries. This part is though: after Dad retired from the service we moved to a little Southern California town in time for me to go through High School. My parents bought a nice three-bedroom home for $!8,000. When I finished seeing the world I moved back to the same town. My parents’ old house came onto the real estate market during the last boom – priced as close as doesn’t count to half a million bucks.
I just fired up the calculator and someone who was making $5.00 an hour back when my parents bought that house would be making $138.88 an hour if wages had risen at the same rate as real estate.
Wages have neither kept with inflation or with worker productivity.
JGabriel
I’d just like to point out that upper management in the world of finance and the economic elite is pretty much dominated right now by people who got their college educations in the Reagan era. I suspect that’s a contributing factor to our current woes.
.
Chrisd
@Silver: Exactly. Hell, putting flat screens in every room and in the shitter wouldn’t touch the increased cost of health insurance, let alone college education. These are sops, the suburban equivalent of pricey ghetto bling.
stuckinred
@piratedan: Yea, when everyone was white that worked great.
suzanne
Everyone who’s commenting on the McMansion trend in homebuilding is absolutely right. However, one thing to further keep in mind is that the average size of the lot has not increased to the same degree, and in a great many places, has actually decreased. Bigger houses on less land, because we lead more interior-oriented lifestyles, with all the consequences you would expect from that. This means that the price of land has climbed much faster than inflation, as well.
Kirk Spencer
In agreement with several points above, it’s a combination of three things.
1) average individual incomes haven’t grown much in real terms (ie adjusted for inflation) since late 1960;
2) Some fairly standard purchases have gone up a lot more than inflation, of which education and housing are significant elements;
3) We purchase more than we did then, so while cost per item for what doesn’t fit (2) hasn’t changed that much the overall expenses have gone up. Examples here: in the 1960s the average family had one car, now the average is over 2; in the 1960s there was maybe one (Black and White) television, now houses have more than one television; computers/game boxes?; and so forth.
If you “only” purchased the number and type of things my parents/your grandparents purchases (I was born in 1960), you’d probably do a lot better. You’d also have a significantly lower quality of life in most people’s eyes, and maybe your own.
Jamey: Bike Commuter of the Gods
All Cintibud’s letter proves is that the Church is better than the gubmint at providing for our needs.
txbubba
@Ann B. Nonymous:
To reinforce what everyone has been posting, compare those median prices to the historical median household income: http://www.davemanuel.com/median-household-income.php
Even with two wage earners, the household income has not kept up with rising costs.
So, the question is why have wages not risen with costs? It has nothing to do with claims of higher taxes or powerful unions.
stuckinred
@Dennis SGMM: I wonder what our first house in Whittier bought in 57 is worth now?
Carl Nyberg
College costs and students loans play a role.
Nickel-and-diming the middle class plays a role.
I am guessing that increased cost of having an automobile plays a role. Cars cost more and people are required to carry insurance.
Higher property taxes and other taxes that hit the middle class play a role.
Spending more on cable, Internet and mobile phones plays a role.
Spending more on medical costs plays a role.
And parents spend more on their children than in the past. There is aggressive marketing at children and parents and a sense of peer pressure to keep up.
stuckinred
@suzanne: Our house was built in 1909 and I wish the damn yard was smaller! Beating back the kudzu all summer is killin me!
Svensker
@gorillagogo:
Even there, speaking as a sew-er (heh), making clothing now is MORE expensive than buying, believe it or not. Home seamstresses can’t compete with offshore sweatshops.
matryoshka
@stuckinred: Got it. I wasn’t romanticizing the Depression, not by a long shot. It was just the first example that came to mind, and I was trying not to be long-winded. But don’t you think the whole post-Reagan, anti-union, Palinist vibe in our country is a little more overtly hateful toward people who have less? Don’t you think greed has been held in high esteem, while people who have less have simply been dismissed as less worthy?
JGabriel
@piratedan:
True. When did people forget that, in Wall Street, Gordon Gekko was the bad guy?
.
nisl
What changed?
From the Baloon Juice link right after this one comes the following:
When the post-War boom came to a screeching halt in the 1970s, Reagan was right there to reassure the middle and upper classes that welfare queens were taking all of their money. It doesn’t have to be true, only plausible. And there’s nothing people with money will believe more readily than the idea that the government is taking it and giving it to poor people.
While there is an element of class conflict and blame-casting in every society, since the era of St. Ronnie we have seen some curious developments in our take on this form of rhetorical warfare. “Reagan Democrats” and other working-class whites who hopped on the GOP bandwagon in the 1980s for the first time in sixty-plus years were naturally quite receptive to the idea of using the underclass as a whipping boy, as the poor represent their primary economic and social threat. I mean, a white guy working in a screen door factory had to grapple with the reality that any person on “welfare” could and might take his job if not sufficiently vilified and beaten down. Slashing the social safety net was a self-defense mechanism for working-class whites, widening the gap with their economic competitors under the guise of small government rhetoric.
But then the right got all of the possible political mileage out of the poor and the welfare queens, it needed to find a new enemy. The Unions were a logical target, being a great irritant to the plutocracy since the 1930s. Suddenly “Reagan Democrats” found themselves on the receiving end of the politics of vilification. They were more than happy to hop on the “Let’s blame the poor” bandwagon and suddenly the tables were turned. Before they knew what happened they became the malingerers, the leeches bleeding The Deserving dry. This too was successful, as middle class suburbanites gladly threw their lot in with Management to present a united front against the new enemy. You know what happened next: NAFTA, deregulation, and the end of blue collar industry in the United States.
Now the definition of who is a good, hard-working American deserving of wealth and, conversely, who is the drain thereupon is once again changing with the times. Having dispatched the poor and the working class (largely by setting them upon one another as Jay Gould boasted about so many years earlier) it has become necessary to move one more step up the ladder and vilify the middle class. Now the leeches and deadbeats are the petit bourgeoise. Civil servants. Teachers. Middle management. Basically anyone with a pension or benefits beyond a salary are destroying the country. And once again people who were integral to the previous wave of Blaming have become the Blamed. America is falling apart because your aunt worked at the County Clerk’s office for 30 years and now wants a pension. Because of your daughter bought a house and then got laid off. Because of all the people incessantly whining about how they need health insurance or doing things like getting cancer when they don’t have it. Because of people who insist that they actually need Social Security rather than just living off of their stocks and bonds in retirement.
That people can’t recognize this progression is unsurprising and surprising at the same time. On the one hand, we know that Americans are politically ignorant and selfish enough to be OK with whatever negative things happen as long as it happens to someone else. On the other, the pattern that has been unfolding over the past three decades is just so bleedingly obvious – systematically eliminating one social class at a time to further the interests of the economic elite – that I struggle to understand how anyone could fail to notice it by now. Then they came for me, and there was no one left…
http://www.ginandtacos.com/2010/12/06/turntables/
Dennis SGMM
@stuckinred:
Depending on the neighborhood, likely way more than both of us combined could afford. A lot of the nice, old hillside homes could have been made out of platinum for the prices they were asking during the boom.
Jamey: Bike Commuter of the Gods
@Dave: There you have it: The entire history of the past 30 years in one Twitter-length comment.
Carl Nyberg
@Studly Pantload:
The paradox of the Right wanting to go back to the days of White privilege and the Left wanting to return to the heydey of labor is interesting.
But in a two party system, the voter is reduced to choosing between two visions that both want to go backwards, not forwards.
It’s kinda hard to have a quality debate when we’re trapped by the media into debating two different visions, neither can be implemented.
Martin
@gex: But some of it really is ‘stuff’. When the average home size jumps from 700 sq ft to 2,000 (while the number of kids goes down), the only thing to consume the rest of that square footage is ‘stuff’.
Nutella
@Chrisd:
And bear in mind that the price of electronic gadgets has been going down for years so what would have been a crazy luxury in the past is now a small indulgence to distract people from the depressing thought of their negative net worth.
Example: Today individual health insurance for a healthy single person for one month costs more than a computer. Netbook $300, insurance $400/month.
catclub
@A Commenter at Balloon Juice (formerlyThe Grand Panjandrum): I was going to recommend that talk. Unfortunately I read a few posts first,
Erikthe Red
The wife and I make shit, but we can afford a small home and to send our daughter to small, expensive private college.
How do we afford to send her to this college? Well, our daughter’s a smart cookie, so was able to get some scholorship money and grants. She does have over $7 thousand in loans, too, that she’s on the hook for. There’s still a bit left to come up with after all that for each trimester
To come up with the rest, our daughter has had to work an $11 an hour summer job at my place of employment. As for mom and dad, mom put the balance of one trimester on her credit card and this year’s tax return is going to pay for another.
Take away any of those pieces and our girl could probably still go to college, but it would be our local community one. And who knows if we could afford to send her to another one after 2 years.
RSA
@Martin:
I think that this is suggestive of an important issue issue. It’s partly increased cost, partly increased expectations, and whatever else I haven’t thought of. Our idea about what constitutes a middle class living has changed over time, and some of its components are a lot more expensive now. Housing (the average house is double the size today as in the 1950s; even if we all were to cut our square footage in half, I suspect the prices wouldn’t match). College education (going to college wasn’t a middle class thing in the 1950s, with around 5% of the population having a four-year degree; it’s only around 30% now, which argues that it’s actually not a good marker of the middle class). Medical expenses, of course.
trollhattan
Just Zillowed the Seattle house I grew up in. My folks paid $12k; the Zestimate is $482,500. (Wonder what it was in 2006?)
stuckinred
@matryoshka: If we factor in racial hatred, no way. I’m not saying it’s not ugly but I personally believe it has been way worse.
liberal
@Carl Nyberg:
As for property taxes, wrong wrong wrong wrong wrong.
First, the fraction of state revenue financed by property taxes has trended downward over the long haul.
Second, the fraction of property tax falling on land has no effect on affordability to future owners. That’s because the value of unimproved land is the net present value of the after tax annual land rent. And for older homes, more than half the value is the land not the structure.
I’d much rather buy a house in a place with high property taxes. That way I know more land rent is going to pay for schools and roads, and less is going to pay banks and current landowners.
Bizono
It’s pretty obvious:
1. Housing costs are still MUCH higher than they for my parents in relation to real wages(they are in their late 60’s, I’m in my late 30’s).
2. Pensions are gone and employers have shifted most of that cost off to their employees.
3. University/college tuition costs have exploded.
WyldPirate
@stuckinred:
Got no other choice, my man.
May have to take up guerrilla agriculture, though.
Cara
The taxes paid by the top 1% is what changed and wages have barely risen since….
Peter A
Globalization is the main culprit. Immigration and off-shoring have helped keep wages and salaries down. Most people are expendable – if you don’t think you’re being paid enough then leave. We’ll just go find an immigrant who will take your job for half the pay and probably do it better than you do. Liberals don’t want to talk about the devastating effects immigration has had on unions and lower income Americans. As long as restaurants and domestic help stay affordable it’s all good for the upper middle class. Now, it’s true that in order for the rest of the world to catch up with the US we do need to open up our borders and opportunities to people not fortunate enough to have been born here. But the price of immigration and off-shoring is being paid entirely by the lower classes while the benefits are mostly being reaped by the affluent. True, the middle class can now buy very cheap goods at Walmart and Costco, but does the benefit of being able to afford a lot more shoddily made clothes, toys and video games really offset the loss of security?
liberal
There are many, many posts above that attribute the increase in housing costs to bigger houses.
That misses the main driver of increasing housing costs: land value. Because the supply of land is fixed, as incomes go up, the price of land is going to go up, particularly in “desirable” locations.
piratedan
@stuckinred: I don’t believe that this is an exclusively “white” phenomenon but then again, I grew up as a poor lower middle class white kid who had friends taht were black. I played at their homes and vice versa. I can remember my folks buying their first home in 1970 when I was 9. I remember growing up on macaroni and cheese and creamed chip beef for dinner (and not together, we weren’t that well off) and being reminded that I was fortunate to have dinner that was hot, tyvm. I can’t presume to speak for other folks but I wasn’t raised to be afraid of them or to think of myself as being better than them.
RossInDetroit
I’m 51 and have 5 siblings. Our family of 8 got by well on a pharmacist’s salary and mom never held a paying job. Dad, now 73, still working and still a Republican, recognizes that his kids have to work harder for less compared to him at the same age.
Molly Merlot
@Svensker:
I am also a home “sew-er” and agree with you.
The clothes I make for myself and my grand-kids could be purchased much, much more cheaply at WalMart.
The thing is, I’d rather chew tin foil than enter a WalMart, so for me, it’s worth it.
My story is similar to the original post.
Born into a family of 12 kids, mother never worked, father was a union pipe-fitter, we all went to Catholic grade schools & high schools, were on our own for college, those of us who attended college did so by working a full time job while attending college, loans for my younger sibs, etc.
We didn’t have many extras, but didn’t feel as if we were deprived.
sublime33
“First, the fraction of state revenue financed by property taxes has trended downward over the long haul.”
Not true in the state of Illinois.
trollhattan
@liberal:
Yup, see California, for example. Been in the same house since 1990 and Prop 13 has been a big part of why we’ve chosen to serially remodel rather than move to another house with those added features. It’s much more expensive to move and “re-set” one’s property taxes.
Prop 13 is the biggest reason most California cities and counties are chronically broke.
gene108
@Bud:
Women’s Lib, the government tricking the African-Americans to stay on welfare, instead of work, government interfering with how states handle their citizens, especially African-Americans, Community Reinvestment Act, legalized abortion and every other liberal victory of the past 50 years.
If you try to argue with a wing-nut, these are the reasons, which have been firmly proven to be the true cause of America’s decline. Try convincing them it’s about taxes and government services and you’ll just be wasting your time.
numbskull
@geg6:
I’m older, but yes, this is exactly what I experienced.
Lukeness
I think “The Predator State” by James K. Galbraith sums it up pretty well. Also “Free Lunch” by David Cay Johnston.
Also… peak oil.
liberal
@Peter A:
Unfortunately, this is true.
WereBear
@gorillagogo: Clothes then were cheaper if Mom made them; especially if a child was growing out of them all the time.
But now? Have you priced fabric lately? It costs more to make a piece of clothing than to buy it from Wal-Mart.
stuckinred
@piratedan: I’m thinking while you may be the rule for BJ folks you are an exception to the larger society. But then again I grew up in two of the most segregated cities in the country, Chicago and LA. I really didn’t know any black folks until Ft Campbell, KY in 1966.
liberal
It’s telling that a lot of people mention these factors:
(1) Housing
(2) College
(3) Health care
IMHO there’s something in common to these three: they all feature substantial economic rents.
Housing is obvious: land rent.
College? I don’t have any numbers to prove it, but there’s no obvious reason why college costs should have outpaced inflation as much as they have in the past couple decades, other than that provided by a model of college education as a “collectibles” market. (One marked by a fixed supply.)
Health care: lots of economic rents there…
Peter A
@48 – “Another difference is that virtually every type of business has been nationally franchised so that that there is no room for the independant operator.”
Yes, this is a very good point, and one that doesn’t seem to get discussed as much as it should. National consolidation and roll-ups have “unlocked value” as the private equity guys like to say – i.e. more value from these businesses flows to top management and equity, value that would have remained with the individual business owners and even employees 30 years ago. The result is somewhat cheaper goods and services than we would otherwise have, but in the process we have hollowed out most of America – capital flows out of the heartland and back to a privileged few in New York, Boston, LA, etc. Or even overseas.
WyldPirate
@liberal:
One of the things that has caused an increase in college costs–at least in my state at public Unis—is that the state pays a significantly less fraction of the costs than it once did. On top of that, the increasing costs have been shifted more towards the students/families.
sorry, but I don’t have readily available data to back up my claim, but I have seen it.
catpal
my parents jobs were Never outsourced to India, Phillipines, Mexico, Guatemala, etc.
Jobs in the US had to have competitive wages and benefits back then, there was No Outsourcing to low wage countries.
my parents had Health Insurance that Actually Paid the bills, not denials. And no Health Care Debt for hospital, doctor, dental visits, back then.
My IT job was sent to India FOUR (4) times in the last 6 years – from Health care, Banking, IT industries.
I see little hope in the US for a future of decent paying jobs, and a somewhat affordable lifestyle.
Gretchen
@31WyldPirate: Similar experience. I went to the University of Michigan in the 1970’s, and was able to pay my tuition with summer jobs. My parents helped with books and living expenses, so I was able to graduate without debt. We had to take out a second mortgage to help our oldest through private college, and even our kids who went to State U are finishing buried in debt. We live in a house build in the early 50’s, so you can’t say it’s bigger than people lived in back then, but I’ve always worked, and I’ll bet the original owner did it on one salary.
chopper
everybody has already chipped in, but i’ll repeat it:
1) wages haven’t paced inflation in decades
2) massive outsourcing of blue-collar jobs
3) housing and healthcare slowly became more and more unaffordable
healthcare is a biggie. when people say it’s bankrupting people left and right it’s no joke.
Kirk Spencer
@WereBear:
I have three items for which I drafted the patterns in an attempt make in an attempt to make money: a one-piece motorcycle tank and pannier bag set; a split duffle/pillion bag; a heavy jacket for motorcycle wear. They are/were going to be of lined waxed cotton. I priced material and shipping and such, and even _before_ I added my wages they were going to cost more than nominally similar things already in the market. I could probably justify my cost of labor, but not if I also wanted to pay for things like health insurance.
stuckinred
@WyldPirate: Here in Georgia there is legislation being considered that will give the legislature control over tuition. That would be really cool because then we could lose SACS accreditation and take us where these fucking morons want to be in the first place.
jonas
@liberal: Ditto on the housing, college and health care. I would also add the the modern family has a third obligation that sucks up a lot of disposable income: retirement. The end of the defined pension means that if you want to have any hope whatsoever of not having to subsist on catfood in your later years, you have to set aside anywhere from 10-20% of your paycheck each month (and hope to god the stock market doesn’t crash before you’re 65). Along with the three huge expenses just mentioned, this leaves nothing, or even less than nothing, left at the end of the month for most people, even those still earning good, “middle-class” incomes. Plus, you’ll end up cashing out your 401K anyway to pay for unexpected college, health care or housing expenses.
Don’t you just love all that “flexibility” and “choice?” Eviction, or cash out my retirement? At least the government will stay out of my Medicare! (What’s that? Medicare’s been replaced with more flexibility and choice? Yay! I now have a $500 voucher to cover the year’s medical expenses? But my medicine alone costs over a $1000? What’s that? Fuck off and die? Ok, thank you for your time.)
stuckinred
@Kirk Spencer: Get a Filson!
RossInDetroit
My dad was a hospital pharmacist. When my sister was born 45 years ago the insurance paid the cost of a single night’s hospital stay as their portion of the cost for the whole delivery. Dad wrote a check for $108 to cover the balance.
Yeah, health care has gone up.
Ken J.
A lot of the prosperity of the 1950s-1970s was due to the aftermath of World War II: outside of America, a goodly part of the industrial capacity of the world had been blown up in the years 1939-1945. It took about 25-35 years for other industrial centers to recover and start hitting their stride: the 1970s is when “Made In Japan” started to be a badge of quality — the rise of Japanese electronics and cars.
Passing the peak of USA domestic oil in the 1970s was also huge in putting an end to that era, as has already been mentioned.
Mark Shapiro
As the rich got richer since the 1970’s, several things happened:
They had more money and wanted to lend it out, so
they loosened credit standards and expanded credit continuously,
they kept making advertising more compelling (behavioral economics, focus groups),
they encouraged consumption through better PR in all media (“Lifestyles of the Rich and Famous”, celebrating celebrity, showcasing consumption everywhere),
they carpet-bombed our old, stodgy values of thrift and modesty with consumption messaging.
Finally, until the crash caused the pundits to tell us how horribly profligate, stupid, and greedy borrowers were, they told us to shop til we dropped, that consuming is great, necessary, and best of all — patriotic!
And by all means, watch Elizabeth Warren (@ 7 – commenter Panjandrum – and thanks for a great post.
RossInDetroit
@Ken J.:
That argument made sense to me but it’s been pointed out that the devastated countries didn’t do a lot of importing, so the USA’s production was largely for domestic consumption.
WW II did have some other effects: the modernization of industrial production, and the GI Bill, which produced a huge crop of engineers, technicians and scientists.
dj spellchecker
the entire cargo cult that grew up around the laffer curve…..that’s what changed.
Paul in KY
@Seanly: This. The only way a salaried person makes more money is when they get a raise. The fuckers don’t hardly give any raises anymore.
This is where unions are essential. Only by bargaining can you ever get a Capitalist to freely give someone more money for a job they are doing today at the lesser salary.
catpal
@catpal: and I don’t remember H1-B visa workers competing with my parents for their jobs.
My last IT job had at least Four (4) H1-B applicants for each ONE (1) US citizen applicant. and more jobs went to H1-B applicants that took lower wages.
just depressing job situation here – and no one seems to care.
dj spellchecker
dear b-j, can anyone tell me why my comment at 1:17 pm was put in moderation?
ornery curmudgeon
@Citizen_X: Have to repeat your comment:
“What happened? In the midst of a society-wide movement towards greater equality for all, capitalists realized that they could exploit American racism and resentment to destroy the middle class. The end.”
You named the cause, the rest is just naming symptoms.
Paul in KY
@c u n d gulag: Let me wish you an early Happy Birthday! Great post, too.
Dr. Psycho
I must be a conservative: I want to return to the country of my birth.
It was far from perfect, but it was at least moving in the right direction.
Also, we sent people to the Moon back then. That part was way cool.
Paul in KY
@BGinCHI: I want a polar bear like in ‘The Golden Compass’. One that doesn’t go on week long walrus benders, though.
Heather
As Elizabeth Warren explained in the Two Income Trap, the crappiness of most city schools lead most parents to think that they have to move to the suburbs to give their children a decent life and education. Women entering the workforce in the 60s and 70s dramatically increased incomes for married couples for a short period, but housing prices quickly rose to consume the newly available income and more. the decline of unions has led to a decline in real wages, and health care costs have skyrocketed. Part of Warren’s proposed solution is to fix the public schools that were hollowed out, defunded and left to die in many areas when integration arrived, so that parents don’t “have” to flee to sprawling suburbs or pay crazy top dollar mortgages for housing in the few urban or outskirts areas which still have “good” schools. Now, how do we fix the schools, esp in this era of shrinking budgets?
catpal
@RossInDetroit: “Dad, now 73, still working and still a Republican”
and still votes Republican now, even though Republicans NOW care less about workers and More for Corporations.
Like all the Seniors and Boomers here in PA, whose voting attitude is now “I got mine, too bad for you” and “I don’t want to pay more taxes, too bad for you”
sgrAstar
Such a great, if heartbreaking, discussion! On the subject of college costs, which have indeed exploded, we can’t forget that the states have drastically reduced their support for their own public universities and colleges. My alma mater, Berkeley, has seen the state’s support plummet by 50% just in the last 5 years. Appalling! In addition to factors already listed by you guys- wealth transfer to top end, abetted by government tax policy; class/race warfare abetted by cynical, corporatist news media; successful war against union labor- I’d like to add that universities have fallen into the clutches of Wall Street managers who are looking to ‘monetize’ as many university functions/services as possible. Naturally these new managers need to be paid salaries commensurate with their supposed value to the economy at large. ARGH! The whole process is in its turn abetted by craven, brainless state legislators who have bought into the Reagan philosophy that government- in all its manifestations- must be gutted. Go, people of Wisconsin, go! we are all rooting for you.
Mart
Born in 1958 and had the same upbringing with 5 siblings – all went to college, at home mother, middle class income father. What changed?
Super rich no longer pay 70% – 90% of income (after a large deductible).
Easy access to finance. I am a no credit kind of guy (parents suffered during the Great Depression and lectured us). I am pretty rich with two paid for college educated kids, paid for home, etc. Only difference from my folks is wife has worked all these years except for a four when the kids were babies.
Contemporaries with larger dual incomes who buy homes too large, finance everything, refinance homes to pay for cars, etc. ain’t so well off.
PurpleGirl
@liberal: Only to a point. When I was let go 2 years ago, my position was not filled and it still isn’t filled. The grant writer just has to do more without help. More big companies consolidated over time and that cut the number of jobs there were to be filled. When Boeing hires machinists, they don’t hire an illiterate laborer but they outsource or sub-contract. Now, I’ll agree that agri business and food processors may hire more immigrants, but even in the 1940s and 1950s we had a bracero program with Mexico to bring in cheap labor. Business goes for the cheapest labor these days that they can get, but that is still moderated by the needs of the job. I think you need to categorize which immigrants you want to blame. But it still comes down to the companies that hire and employ them.
gene108
@catpal:
The people I’ve known on H1-b’s aren’t looking to make lower wages. They are far more aggressive about money matters than most Americans I’ve met. They push a lot harder to get raises / higher pay from employers.
PurpleGirl
@catpal: In the 1970s, there was a post office box in Brooklyn was the drop for companies who wanted to bring in foreign labor but had to still advertise domestically first. It was talked about that you shouldn’t send resumes to that box number because you wouldn’t be called anyway. Corporations have been looking for ways to undercut workers for a long time.
chopper
@jonas:
yeah, college. problem is, while college costs have gone up and up, the necessity of having a college degree to be middle-class-at-least has gone up as well, as pointed.
this isn’t the land where you it’s easy to get a nice blue-collar job with a HS education that will afford you a decent enough lifestyle like a home, family etc. you need a college degree most of the time to get there now. and college has become more and more expensive over the years. it’s almost turning into a bubble, to use an oft-overused metaphor.
Paul in KY
@stuckinred: Go Dawgs!
geg6
@sgrAstar:
Agreed. When I started at Penn State 12 years ago, the state provided 14% of the University budget. We are down to a projected 5% this year. Rendell held off the legislative wolves as well as he could but going from 8% to 5% in one year will be a killer for tuition.
Mnemosyne
@Peter A:
Fix’d, because the problem isn’t people who come here with work permits and get paid minimum wage. The problem is companies hire people who do not have permission to work here and so can be paid less — often much less — than a legal worker would be because we keep deporting illegal workers instead of shutting down businesses that use them.
If you’re a contractor and you have a choice between having an employee that you have to pay $7.25 an hour to, or going down to the Home Depot and paying a day laborer $40 to do the same job, which one are you going to pick? More to the point, what do you do if your competitors pick Option B and are able to undercut your prices?
gene108
@mac:
I don’t think you can decouple this with the boom in divorce rates that hit America in the 1970’s and continues today.
Whatever changed the family dynamic from two people staying married for life, to two people having a less than 50/50 chance of being together for life put a lot of women in the workplace or caused women to continue in the labor force, after marriage, because of the high probability that the first marriage you had in your 20’s wasn’t going to last.
blondie
@JGabriel: I agree with you about the corporate leadership having been shaped by the Reagan years, and now bearing the brunt of responsibility for the mess we’re in.
I got my MBA in 1982 from a pretty good graduate program at one of the more prestigious public universities in the country. And I hated every minute of it. It wasn’t the actual education; what I learned was interesting, and reasonably applicable to finding a good job. It was my fellow classmates! They were greedy, smug, arrogant without any basis for it, and most of them shunned entry-level managerial jobs in manufacturing companies ’cause they weren’t sexy enough.
I have never made a donation to my grad school, and never will. I got a call last year from the alumni office after I’d expressed myself somewhat forcefully in a survey. The young woman wondered why I was so adamant about not donating. I lectured her for a good 15 minutes, almost without a breath, and laid the blame for our country’s hardships squarely on that institution and all the others around the country that turned out similarly flawed “managers” over the past 25 years. It was quite a laundry list that I ran her through.
(I did apologize to her after I’d finished.)
JenJen
I imagine this will get lost in the tidal wave of posts, but I hope Cintibud is still reading.
I grew up in West Carrollton, which is just down the road from Kettering. I recall fondly all my friends who attended both Fairmont East and West when there were still two high schools. I’m younger than Cintibud, but we had similar experiences growing up. My dad managed to keep us comfortably esconced in a middle-class lifestyle while working as a deejay at WHIO, and my mom held a part-time job at the Journal-Herald writing and editing the obits. We had the same kinds of problems most families have, but I recall my childhood growing up in a then-thriving Dayton, Ohio as somewhat idyllic.
We still had the Delco-Moraine plant back in those days; the parents of many of my classmates worked there. We had Mead, and NCR, and Frigidaire. We all shopped at independent grocer Woody’s, and many of my classmates took after-school jobs there.
It’s all gone, you know, and I think that’s what changed. The jobs went away. The good jobs, the jobs with fair wages and benefits and pensions, the jobs that kept all of us rather comfortably in the middle class. When I go back to Dayton now, to visit my parents, it’s a depressing experience. My old high school, and neighborhood, is practically unrecognizable. The plants are all shuttered, even the paper factories that kept West Carrollton going are just empty shells now.
[i]I went back to Ohio
And my city was gone[/i]
catpal
@gene108: sorry I don’t mean that generally. I can only speak to my personal experience with 2 Companies that decided on who they hired based on qualifications and a lower salary request from an H1-B worker.
I sadly admit that I am a somewhat bitter former IT worker who saw many IT jobs that we were more than qualified for, replaced by an H1-B worker or outsourced out of the US.
That did not happen in our parents generation.
That is the current reality of the Lack of Job Opportunities for many US Workers.
Paul in KY
@sgrAstar: When I started at UK in Fall 1977, the semester tuition (for in-state student) was $225. By the time I left in Spring 1981, it was $350.
Now I hear it is $5,000 a semester (for in-state student). I love the University of Kentucky, but (to me) there’s no way in Hell it should be $5,000 a semester for just to take the freaking classes (let alone the room & board, which is now cheaper than the tuition).
JenJen
Sigh. FYWP won’t let me edit my comment at #149 to fix my crappy HTML.
Let’s try that again…
I went back to Ohio
And my city was gone
Ivan Ivanovich Renko
@piratedan: You probably weren’t raised in the South. The so-called “white friends” I had when I grew up there are pretty much all teabagging assholes now.
Mnemosyne
@gene108:
When you start an H1-B worker at $30K a year in a job that used to be filled by an American citizen at $70K a year, your HB-1 worker can push for a lot of raises and still be much cheaper for the company.
Companies advertise jobs at far below the market rate and then cry that they have to use H1-B workers because Americans are too lazy and greedy to work 60 hours a week for $30K.
Ruckus
A lot of jobs changed or went away. In the field that I worked in from the 60’s to the end of the 90’s, mold making, we went from everyone having to be a craftsman, to the machines doing a huge amount of the work. And as well a lot of the work was sent offshore. When all the work was done manually it took most people 8-10 years to be properly trained. Now it is mostly machine operators who train for months at the most.
What happened? Not enough training happening for the craft work. People were told they had to go to college to get ahead. Perfectly fine craft people not able to develop or use their talents. And so technology was developed to replace the lack of workers. And so not as many needed, nor did the majority need anywhere the same level of training. So business didn’t want to pay them for that lack of training. Wages didn’t keep up with inflation. Then housing became the wholly grail measure of middle class net worth. More people wanted to move into the nice areas, CA for example.
There is no one thing that caused it. There are many reasons that could have been addressed had there been any desire to.
I don’t want to go back to the last century. It sucked for a lot of reasons. I want to go forward. But I do want to see this country value people for more than how much they can make for the company they work for, or what fucking church they attend.
someguy
The bottom line is Republicans did it.
Goddamn them. If only we could elect a democrat or two into office in this country…
Mnemosyne
@mac:
You also added minorities to the labor pool — African Americans, Asian-Americans and Hispanics have far, far more opportunities open to them now than they did in the 1950s.
So if white men have a feeling that they wouldn’t be so bad off if there weren’t women and minorities in the workforce … in some ways, they’re right. That’s the handle that Republicans were able to grab to leverage themselves into power. Crabs in a bucket.
phlogiston
For a detailed explanation: Winner-Take-All Politics by Jacob Hacker & Paul Pierson… How Washington made the rich richer and turned its back on the middle class…
opie jeanne, formerly known as Jeanne Ringland
@sublime33: I think you’re right. Housing is the one big thing that changed dramatically.
We bought our first house in 1970 in Riverside, California. It cost $15,500. We sold it five years later for $25,000. In those five years we had remodeled the kitchen and done a number of improvements to the property so our profit was about $5,000.
Today it is on the market for $149,000 but in between 1970 and today it was worth more than $440,000.
Our second house, purchased in 1976, cost us $42,000 and was overpriced by $4k. Less than a year later it was worth $75k, and when we sold it in 1984 it was worth $125k. We had remodeled the kitchen on that place and made a number of improvements to that place too. That house is currently valued at about $270k but it was worth as much as $570k a couple of years ago.
The next house was bought in 1984 for $150k, sold in 1991 for $250k (we took a $50k beating on that one, because of the Rodney King riots; the market dried up for months because people were idiots and stopped even looking at houses, and we had to sell because of the fact that the jobs were 400 miles away. Remember the recession at the end of the 1980s?)
We had done a minimalist kitchen remodel, but we replaced some of the windows as part of restoration work. The house swung up to nearly $800k in value since 1991 but now it’s around $350k.
The equity we had at the end of that sale has not changed much since we sold that second house (and we have owned 4 houses since then) because we were scrambling to keep up from 1984 until the present. I never had to take a job until the late 1980s and by then our friends had wondered for years how we could afford for me to stay at home with the kids. The only reason was that our mortgages were just low enough to allow that luxury even at 9.5% interest, because of the money we made from the first two houses, which today is just peanuts. I know that if we had gotten $300k for that third house we would be in an incredibly better position today. Just $50k would have made all the difference in the world.
James E Powell
@AnotherBruce:
Next question is how was the greed class able to do that without any (apparent) objections from the middle class?
eldorado
it used to be possible in this country, for a lot of people to graduate (or not) high school and find a job/trade that paid well enough to support a family.
now it’s not.
so it’s not just the cost of college (which is significant), it is the requirement of some sort of college experience to even have a chance at a decent job.
satby
@cintibud: When people factor in how it takes 2 incomes these days for a family to stay “middle class”, most forget how much of the second income is lost to the overhead of working if you have young kids. My sons are in their 20s now (I’m 55 too) but when my ex-husband and I ran the numbers for childcare, dry cleaning for my mid-level manager wardrobe, commuting (including the side trip to the day care center), and costs of a couple of take out meals a week, my take home was about $1.85 and hour.
PurpleGirl
When I started at NYU in Sept 1969, tuition and fees were roughly $1,250 a term. A 4-year undergraduate degree was roughly $10,000 excluding text books and housing but most NYU students lived at home. As sources of financial aid developed and increased the costs of college have steadily gone up. I was able to attend NYU with my tuition paid for by my parents and my father’s union scholarship fund. In those days, the scholarship could be used only and certain schools and it paid 50% of tuition.
Ruckus
@eldorado:
You said what I was trying to say much better. The job/skill used to be the valuation, not the salary.
Stefan
It isn’t just the housing prices, it is the everything prices. Food prices are so high, I didn’t even realize how much I was paying at the grocery store until I started buying my essentials at Aldi. The food is lower quality, but at least the milk isn’t $4 a gallon.
Milk — can be pumped from a cow by hand, cow can be fed on grass, endlessly renewable resource, produced locally, costs $4 a gallon.
Gasoline — often imported, costs hundreds of millions in upfront costs tied to exploration, equipment, etc. to find, drill, refine, ship, transport, not endlessly renewable, costs about $3 a gallon.
Either we’re paying too much for milk or too little for oil….
opie jeanne, formerly known as Jeanne Ringland
@matryoshka: You must be about my age because my grandma did the same thing.
The last time I fed a hungry man personally was in the 1980s. The weather was very warm and he wanted to sit out on the porch, so we brought him a table and a chair and asked if he liked chicken salad sandwiches. He did, and he ate three, along with a glass of iced tea. Riverside had a “collection” of homeless people who seemed to fit one of two categories: alcoholics or schizophrenics. I think he was the former.
I have given money to people on the street since then, bought a newspaper for one man because he asked me for one, but I have a real prejudice against giving money to people who share a street corner and work in shifts. My failing, I suppose, but the first time I tried to buy one a meal he cursed me.
The last time we helped someone it was two guys who were so obviously illegals that they practically glowed in the dark; they were in a Target parking lot in Fullerton. They spoke almost no English and our Spanish was pretty bad but we figured out that they had been dumped there by someone, and they had not one dime for food or a bus or a hotel, and it was late and getting cold. We fed them and gave them money for one night in a local motel and showed them the motel. That was last summer, just before we moved.
Mnemosyne
@James E Powell:
Resentment politics. Claim that the greed class didn’t want to take things away from the middle class but that woman/black/Hispanic just forced them to do it due to their greedy demands.
They managed to make a whole generation of blue-collar white men identify more with the Milkens and Icahns of the world than with their fellow blue-collar workers based on the color of everyone’s skin. And it’s still working today.
Church Lady
As everyone above has pointed out, the changes are so many that no one single thing can be pinpointed. I’m only three years younger than the writer of the email but my experience was a little different.
My parents got married in 1957 and bought a three bedroom home south of Miami for 16K. My father was transferred out of state in 1968 and the house was then worth….. 16K. On the flip side, my parents bought another three bedroom house in 1972 and paid 42K for it. They sold it in 1984 for 98K. Each time they owned the home for essentially the same number of years, the difference being that the first house had no appreciation in value and the second more than doubled. What changed in our economy to make this big of a difference in the increased value of housing?
I started college in 1976 at a state university. My tuition was $225 a semester and books for all classes, combined, ran less than $100. My son is a sophomore at a state university and his tuition is around 4K per semester and I have yet to pay under $500 a semester for textbooks. What changed to make the cost of education, and textbooks, so much more expensive?
The sad thing for me is that my college degree, which cost less than 3K, total, for four years, will probably prove to be more valuable, in terms of income earning ability, in the long run than the one my son will earn (hopefully!) at a cost in excess of 30K.
The Populist
We went from being a meritocracy where a guy with the “better mousetrap” could instantly start a business and compete in a market to an oligarchy where the powers that make entry into any established industry almost impossible.
Loyalty to one employer was the key thing back in the day. You could reliably see a raise and retire with the same firm. Not anymore.
Sure, creature comforts and easy credit changed things. We all thought we were doing better than our parents all due to home prices rising on speculation and the like. We all did better because of debt, not really due to any real, earned wealth.
I dunno…I was lower middle class, worked hard and have succeeded to some degree but I look around and I realize that us middle class folks are footing the bill while the wealthy don’t pay shit. THAT is the problem.
The Populist
@Mnemosyne:
We’ve really allowed straw man arguments to dominate when the reality is that the rich got richer THANKS TO US and in the process, we get poorer.
The Populist
@Stefan:
Thank the greed that moved from derivatives and stocks to speculating on the cost of milk. It’s all crazy. Prices aren’t rising due to increased demand, prices are rising because some greedy trader is bidding on the price of milk to rise.
It’s a sad joke being played on us all.
Stefan
What changed? How were our parents able to do it, but those our age and younger are just treading water?
To quote Moe Sizlak, you know what I blame this all on the decline of? Society.
phlogiston
Remember this:
How’d you like to see that as a deduction on your pay stub? If you did, the pitchforks would have come out long ago…
gene108
@Mnemosyne:
What professions are you referring to? H1-b workers are skilled workers. They require, at the minimum, a 4 year degree or demonstration of a specialized skill, such as a chef.
Companies must pay them the prevailing wage, which is determined by various surveys conducted by the DoL. If the prevailing wage for a worker is $65,000 and you had someone working for $70,000, you can’t pay the H1-b guy less than $65,000.
If the prevailing wage for a worker is $30,000 and you paid someone $70,000, you are overpaying or have the best damn person in the skill set ever.
Again, the issue with H1-b workers isn’t that they will work for less, because I don’t think that’s true or if they will, it’s not a significant difference like you are stating.
The issue is flooding the country with immigrants to compete with locals for jobs. In the boom times of the 1990’s, it didn’t matter as much. As things have gotten more competitive, this past decade, the added pressure in the labor market is being felt.
@eldorado:
Why should an American high school drop-out make a decent wage, have access to potable water, own a car, etc., while his Guatemalan counterpart lives in a hut, walks a mile to fetch water, etc.? What makes an American that much more valuable, as an employee, than the Guatemalan?
It’s tough out there, but the wealth of much of the First World has been built on keeping the rest of the world down. Globalization is reversing a couple of centuries unequal flow of capital from what are now Third World countries to First World countries.
Nutella
@catpal:
Speaking of the ‘I got mine’ attitude, two more examples:
Military retirees who move to Pennsylvania because it doesn’t tax their income and then vote down any local tax increases. Leeches.
Reagan famously was an AFL-CIO member and president of the actors union for years — when it was advantageous to him. When he took up politics and dropped acting he worked against unions since they weren’t doing anything for him any more.
R-Jud
@Stefan: Yes! The milk/gasoline price disparity has always blown my mind. Gasoline probably should be about $5 a gallon (where I live, it’s currently $7– another reason to telecommute).
slag
@A Commenter at Balloon Juice (formerlyThe Grand Panjandrum):
I call bullshit. This describes my home precisely (except no auto debt). But no way would we be raising kids on a single salary these days. It’s just not even a question.
Income inequality. We’ve simply given away all the cookies. And then we blame brown men and women of various shades for our decline. Because that’s how we roll.
The Populist
@Mnemosyne:
Regardless of that fact, the GOP has quietly changed so many good rules of the marketplace, the ones that made things fair, so their rich patrons could get obscenely rich.
We once had usury laws.
We had good rules that said BANKS should be BANKS and not mini Goldmans.
We had rules that challenged mergers of companies and forced them to lay out WHY this merger is GOOD for consumers.
We had solid consumer laws that protected people. Look at all the food issues we’ve had over the years? The GOP hate regulations so they’d intentionally appoint people who were sympathetic to manufacturers. Food illnesses have spiked, lawsuits over bad paint on toys, consumer staples, etc. Back in the day this didn’t happen as much.
I fear we’ve become a 3rd world nation unless people stop stressing over what Obama does or doesn’t do and get more progressives BACK into congress.
Mnemosyne
@gene108:
Assuming you keep them in the same job title, of course. If you change the job title to an entry level one but have them do a high level programmer’s work, you keep to the letter of the law and get to have a high level programmer for the price of an entry level one.
You really think that employers have not been gaming the system to keep wages down for at least two decades now? Particularly since the Bush II administration wasn’t very big on enforcement that might inconvenience business owners.
JenJen
@gene108: You’re spot on about H1B workers, but what about H2B? I was the F&B Director at a hotel until the global economic meltdown of 2008, and although I hired only US citizens to work in our front-of-the-house positions, it’s common practice right now in the hotel industry to bring in boatloads of workers from Eastern Europe on a “temporary” basis under H2B visas to work menial back-of-the-house positions such as housekeepers, and stewards.
They work unbelievable hours in grueling conditions for extraordinarily low wages that you’d be hard-pressed to get a US worker to accept.
I can’t prove it, but just from observing during my years in the Hotel F&B world, I’d say fraud on the part of Human Resources is abundant when it comes to these H2B visas. The workers stay longer than they are supposed to, and no prevailing wage is paid.
Ash Can
@Paul in KY: I wouldn’t be surprised if the general allergy to taxes the country has developed over the last few decades is what’s behind the tuition hike at that school and many others. Taxes get cut or aren’t raised, spending cuts have to be made, and education is one of the things that goes first, because kids can’t fight back, too many parents are clueless or don’t care, and teachers have even bigger problems to worry about. The only way schools can make up the shortfall other than selling out to monied interests is to raise tuition.
Our population’s refusal to pay for public services is turning us into an underdeveloped backwater, but it’s going to be the refusal to fund education that will truly be the death of our society.
D-Chance.
Cintibud’s house was probably under 2000 square feet. They probably only owned one car (two, at most). Their television had 3 channels, all from a TV antenna. They had no internet. Telephone was probably a party line. Movies and dining out were rare occurrences. Kids didn’t wear designer jeans or sneakers. Mom’s jewelry was modest.
IOW, Cintibud lived in another era, a non-consumer era, where people worked for what they owned, and non-essential debt was considered a moral failing and frowned upon within a community.
We moved into a hedonistic era. Yes, Jesus DOES approve of greed (Prosperity Gospel gets way too much of a pass for the last generation of decline). Get it now, and get it any way you can. Credit is free, and if you can’t pay it off, re-fi and load up again and again. Then, declare bankruptcy and repeat. How can anyone live without stainless steel appliances and a 4-car garage with detached 2 br, 2 bath guest house? Why, yes, cars are pretty much worthless after the new car smell wears off and MUST be replaced every 12-18 months. You can’t live without a smartphone and iPad and Netbook and eReader and a half-dozen other whiz-bang gadgets. Cook… who the Hell knows how to cook anymore? You don’t want to do anything to smudge up that $3000 stainless steel cooktop, do you? Why rent a $1 DVD with the family when you can spend $50+ on it by watching it in a theater three months earlier?
And, the list goes on and on.
The truth is, a frugal family living a conservative lifestyle can still operate on a one-income budget. The kids will hate you, the neighbors will laugh, and the in-laws will be appalled. But, it can be done if one can eschew the “must-have” niceties paraded by our ad-driven society and realize that there are low-cost and no-cost alternatives to almost everything in life.
Mnemosyne
@The Populist:
Yep. People who scream about how we should be prosecuting banksters don’t seem to realize that the banksters spent years making sure what used to be fraud is now perfectly legal. There’s nothing to prosecute them for.
walt
@sublime33: I also remember growing up in the suburban Phila/South Jersey/Delaware area walking to the grocery store or the cold cuts store down on the corner to go to pick up food. We would also walk downtown to shop with my mother on Saturdays at the local shops and boutiques. Then in the mid-70’s the shopping malls opened nearby and everyone and their brother was driving to the mall all of the time. I seem to recall as a young kid in the early 70’s that we didn’t drive around as much to get everything done.
colleeniem
@gorillagogo: Or, it was mom working. Tough to sew and work at the same time.
slag
@gorillagogo: It’s been my experience that making stuff yourself these days is far more expensive than buying it in a store.
Svensker
@D-Chance.:
Maybe. IF they can find a safe neighborhood that is affordable and near work. And IF they have some sort of health care.
Kuvasz
How was my divorced father able to support his mother, his two sisters, my sister and me and able to help me cover nearly 1/3 of private college tuition?
HE WAS A FUCKING UAW MEMBER WHO HELPED BUILD THIS COUNTRY!
gene108
@Mnemosyne:
Probably happens, but I don’t see the income disparity you suggest in your example as being likely. H1-b workers, especially IT workers, have above average knowledge on how to get information via the internet about whatever recourse they have or put information on the internet, if they don’t like a company.
If there skillset is in demand, they can change jobs to a better paying employer.
@JenJen:
Probably goes along with illegal immigration as a cause of problems for Americans on the low end of the income ladder.
Of course, America has a history of wanting cheap, exploitable labor. Whether it was through Jim Crow laws or keeping a large population of illegal immigrants now, businesses have been looking to find ways to keep labor cheap.
Paul in KY
@Ash Can: I think you are spot-on with this comment. Education isn’t subsidised near as much as it should be (IMO).
FlipYrWhig
I also think some of the transformation has to do with that early Cold War period, where part of the whole American ethos was to show the rest of the world that “capitalism” meant broad-based prosperity, and that “communism” wrought nothing but regimentation and deprivation. At some point the capitalists decided that they had won the PR battle, and after that there was little reason not to get back to squeezing labor and maximizing profit in all possible domains.
opie jeanne, formerly known as Jeanne Ringland
@WyldPirate: Women have taken the rap for skewing income levels and for taking jobs “just so they can have a fancier house/car/clothing”. Whatever.
Most of us took jobs because we had to, period.
opie jeanne, formerly known as Jeanne Ringland
@gorillagogo: I was born in 1950. My mom stopped making my clothes in 1967, when she no longer had time to do so because she had gone back to work to offset the upcoming expense of my college. They had savings for it but didn’t want to tap it, and it worked pretty well for them.
But, I wore ready-made clothing from that point on and I was kind of glad because other kids had made fun of my clothes since jr high because it was homemade, and not because it was badly made, either. Mom used to win sewing competitions when we were little. It was just that it was obviously not off the rack.
The other thing that changed when she took that job was our diet. She stopped cooking as much from fresh ingredients and more processed food entered the house. Grandma had baked all of our cookies and bread since I was a baby, and she lived next door all my life so that remained constant, but Mom bought frozen vegetables for the first time because she didn’t have as much time to shop during the week.
WyldPirate
@opie jeanne, formerly known as Jeanne Ringland:
I’m not saying it’s good or bad, but to deny that the increasing number of women entering the workforce hasn’t diluted wage growth is most likely denying reality.
bemused
@Alwhite:
Do you happen to have a link? I lived in Northern MN all my life & would like to read this. I
piratedan
@Ivan Ivanovich Renko: I grew up in Maryland, Virginia and North Carolina. Not every southern town is a bastion for KKK sympathies, I’ll wager that you’ll find bigotry, resentment and varying shades of ignorance everywhere, but I believe that it has to start with the parents and personal experiences. I try to do the same with my own kids, judge folks on their actions and personal experience with them, not by who they worship (if anything) or what they look like. It seems like its such a simple message that has been lost in translation somehow.
bartkid
It is not so much “stuff” as the cost of the non-physical items, the cost of health insurance, the cost of cable, the cost of cell phone plan, the cost of gym memberships, etc, not to mention financing charges.
And, I have to agree with #194, don’t blame women for entering the workforce (at this point, it is obligatory to point people to Nickel and Dimed by Barbara Ehrenreich and Your Money or Your Life Joe Dominguez and Vicki Robin).
Mnemosyne
@WyldPirate:
The increasing number of African Americans, Asian Americans, and Hispanics has also diluted wage growth, if you want to look at it that way. Which makes me think that the problem is slightly more complicated than women entering the workforce in larger numbers.
Because it’s not that there were no women in the workforce before the 1960s. There were fewer of them, and they were restricted in the kinds of jobs they would be hired for. A woman who’s a practicing lawyer today wouldn’t have been able to get much higher than being a legal secretary in the early 1960s.
My grandmother was not dirt poor, but she worked until after she had her fourth child. Women working is not new. Women being able to get the same high-paying jobs as men is what’s new.
wengler
The difference is the centralization of capital. Over the past 30 years the federal government has gone through reverse osmosis. Instead of re-allocating money from capital-rich to capital-poor areas, it has instead accelerated the process of capital centralization.
Vast swaths of the American landscape have been devastated by this process. The capital available to start small businesses has been heavily impaired by the rise of the big bank trusts who are most heavily invested in schemes and scams. The capital needed to sustain those local enterprises is also unavailable due to the lack of good paying jobs.
Many communities in the US are near mirror images of each other. The same franchised stores and eateries grace their main stretches, the same Super Wal-Marts often built at public expense ring the outer tier of towns with the big empty former Wal-Mart buildings mere walking distance away. The capital in these communities is funneled to the very top with very little in the way of reinvestment. At every tier government the destruction of job-growing capital-bringing local businesses are discouraged in favor of corporate-designed franchise-branded vacuums of capital.
Thus the rot of the US from the inside out. Reactionary rightwing populism is inevitable in situations like these. We only await our own Valdimir Zhirinovsky
PTirebiter
In 1956 my folks paid $12,000 for the house my brother and I grew up in. In our neighborhood, the only family whose mother worked had lost their father in Korea. She was able to maintain her family of four working as a supermarket cashier and whatever Social Security benefits she received. She was also a proud member of the retail clerks union. On our block I remember a construction framer, a mason, an electrician, a gardener, two mechanics and my old man, a tool & die maker. Everyone owned their homes, at least one car, and at the time, Long Beach had one of the best public school systems in the nation. Growing up, I’d incorrectly just assumed we were the white middle class, we were the white lower middle class but we got by pretty well. Doctors and dentists were seen regularly and we ate very well. The city maintained public ball fields, tennis courts, swimming pools, libraries and a golf course. And all but the golf course were free and within walking distance from my home. The beach was a 20 minute bus ride.
In 1997 that same 2 bedroom, 1 bath house sold for just over $400, 000 and I doubt it was purchased by a single mother of three working as a cashier. I don’t know if the retail clerks union even exists in Southern California anymore. Reagan became Governor in ’67 and the local libraries began to disappear…
twiffer
@satby: daycare is $1K a month, and only because he only goes 3 days (grandma takes him the other 2).
The Other Chuck
@Mart:
The qualifier about “deductibles” makes the statement correct, but it’s best to remember that tax brackets are marginal ones, i.e. you only pay that rate on that amount of income that goes over the bracket; anything under that is taxed at the lower bracket. Making this clear to everyone gives you the foundation for the next argument: when Obama cut taxes for the middle class, he was also cutting the Koch’s taxes too. But the rich want their OWN tax cut on top of that that only THEY get.
chopper
@slag:
yeah, that’s my situation too. one car, tiny place, etc etc. one income cause the wife is in grad school, one kid, and it’s still hard to stay above water. of course, i live in NYC where a bag of nuts requires a loan from the bank.
The Other Chuck
No one in their right mind can blame women for driving wages down — it’s the fact that until just last year, employers have always been able to legally get away with paying women less, which has been able to drive the wages downward for everyone. Equal pay for equal work results in better wages for everyone.
Of course things like the Lily Ledbetter Act are still only going to mean anything only as long as there’s a DOJ that isn’t either A) Republican or B) feckless.
DanielX
So much in this post that’s familiar….sounds very like my upbringing, with some exceptions. Howsomever….
Inflation, led by housing. I don’t even remember what my parents’ house cost, but a friend of mine’s parents bought a home – all brick 1.5 bath 3 bedroom Cape Cod – in a decent neighborhood for $15,000 in the mid 1950s. His mother sold it a few years back for $168,000. Didn’t have central AC, but did have a basement and was built like a fortress.
Cars – a medium-nice new car today costs twice as much as most people’s parents paid for their first house back in the day. This is why I don’t buy “new” cars any more, thankyewverymuch.
Education – My first year at IU Bloomington as an undergrad was in the 1973-74 school year. At that time you could pick up a full 15 hour course load for around $375 a semester in tuition. I know because I had a four year scholarship for $4,000 and the $500 check I got at registration paid my tuition and books. Undergrad in-state resident cost is now (2010-11) a flat $4,062 per semester for 12-17 hours, not including books or other fees. The Jesuit prep school I attended for high school cost around $200 per semester when I started as a freshman; it’s around $8,500 a year now.
Food – I can remember my mother seething over paying $0.50/lb for ground chuck, and Dannon’s yogurt at $0.15 was one of my college staples.
Fuel – I most definitely remember paying $0.35/gallon for gas, and mos def recall the shock when the Arabs turned off the oil spigot in 1975 and gas went to $1.50/gallon overnight (horrors! A buck fifty per gallon!). Was when I had to get rid of my 1967 Olds 442, which pains me to this day.
Medical costs – Don’t get me started (much). In cleaning out my late mother-in-law’s home recently, we found receipts from her late husband’s medical practice (he was a GP). Receipts for house calls in the early 60s (house calls, for the love of God) were…..$5.00, later going to $10.00. You couldn’t get a doc to roll over in bed, much less get out of it, for ten bucks today. Enough said.
2. Wages – did not come anywhere near to making up for these increases over time. Back then – then being 60s-early 70s – my standard of “rich” here in da great midwest was someone whose dad was a doctor (a GP usually), or owned a pharmacy, or ran a plant, or managed a small local bank or something like that – making from $40,000 to $60,000, generally. More than that I couldn’t conceive of, and most didn’t make that much.
I knew a lot of people whose fathers worked at auto plants – they weren’t rich, but they could afford to own homes, get new cars every two-three years, own boats, take vacations, put their kids through college, etc. (Sidebar: it was all on account of those greedhead unions – how dare they!) But there were a hell of a lot of jobs available for high school grads where you could start making decent money right away in a plant, and if you had a liberal arts college degree and were half smart you could always get a job doing something. I had a summer job working on a loading dock in 1978 and made $8.60/hour, and at that time that was pretty decent money for loading trucks. It was a union job (evil Teamsters!) and those guys believed in the union the way an Opus Dei member believes in the Pope. Good thing, too, ’cause a lot of those guys didn’t have much else going for them. Jobs like that and those manufacturing jobs don’t exist anymore, period. Anderson, IN, which was a major GM production center, had a population of 70,787 in 1970….in 2010 the estimated population was 56,129. Go figure. In any case, costs have gone way up – in the case of gas, by a factor of ten, and wages sure as shit haven’t.
3. Government policies – Starting right around 1980, under the sainted Ronald Reagan, there was a concerted push to lessen the power of unions. No point in history lessons, it’s all been covered by a lot of writers and in lots on books.
4. Attitudes – 1980s, that’s when a lot of people actually started to believe in conservative bullshit. I was working in 1986 at a company (unnamed) which provided services (unnamed) to well-off people. I had a conversation with one of my bosses one day and actually had to mentally pause to translate what he was saying about the business – something to the effect that the government took care of poor people and the wealthy needed someone to take care of them. My unspoken reaction was something to the effect that God looks after the poor (badly), but the rich have to find their own way, usually with money, and somehow they manage to do very well at looking after their interests. The company, incidentally, was financed with junk bonds underwritten by none other than Drexel Burnham Lambert (anyone remember Michael Milken? Anyone?) and provided me with my first exposure as to the viewpoint of….fuck the customers, fuck the shareholders, fuck the employees, what matters here are the egos and wallets of senior management. That attitude is all too common; in fact has become the rule rather than the exception.
What has changed, due to conscious government policy, is that the top 1%, income wise, have so much more money than they used to, and consequently so much more political power. That, and the gutting of campaign finance laws, have led to a situation in which lawmakers (senators in particular) truly do view the interests of the 1% as the interests of “the People”, because they are part of the 1% themselves and have no contacts with anyone other than the 1% or those who aspire to it – i.e.; congressional aides, lobbyists, etc etc….to wit, various parasites on the body politic. I draw no distinctions here between Republicans and Democrats…other than to observe that the difference between bad and worse is one hell of a lot bigger than the difference between good and better, which is not exactly profound.
And now, now, we get treated to all the howls about greedy union workers, shared sacrifice (particularly by those union bastards), austerity and all the other miscellaneous horseshit spewed out by politicians, pundits and others who are generally paid in the six figure range. (Megan McArdle, anyone?) The marginal tax rate for those in the top income bracket today is 35% – under that well known communist Dwight Eisenhower it was 90%. This begs the question (to me anyway) of what sacrifice is being shared across the board…but that’s another topic. To complete the circle, it has to do with inflation of cost of goods and services, downward pressure on wages, and government policies. Things will have to get a lot worse for a lot more people before they get better…
greyjoy
What’s even newer is women being 40% (and rising) of household breadwinners. Women graduating with more college degrees and advanced degrees while men drop out before graduating in increasing numbers. Men staying home with parents past the age of 25, even 30, in increasing numbers without a corresponding rise in women doing so. Single women being the second-largest group of homebuyers in this country, behind married couples. Single women outnumbering married women for the first time in history.
Whether or not wages were diluted because women entered the workforce is true, it’s largely irrelevant now. Women *have* made up a significant percentage of the workforce for a few decades now, and if that was a reason to dilute wages in the 1970s and 1980s, why was/is it a reason to dilute wages in the 1990s and 2000s when education and experience were parallel to men’s?
And will it still continue to be a reason to dilute wages when women simply end up becoming better prepared for the workforce than men? Why? Obviously productivity hasn’t fallen. The quality of work hasn’t fallen. Most jobs do not require physical strength and endurance, and a lot of those that do are still done mostly by women. (Nursing, restaurant server, teacher, daycare worker, retail worker–all involve spending a lot of time on your feet and often lifting heavy things repeatedly.) Women still might not be lumberjacks and firemen in any great quantity but in virtually every other field it is no longer unusual.
So, I suppose you could ‘blame’ women for ‘taking’ jobs back at the rise of the equal rights movement, but now, or for the last 20 years? Not so much.
tesslibrarian
@Paul in KY: I once found a canceled check at my grandmother’s house, written for a quarter of tuition at the University of Georgia. It was for my mother, so in the late 1960s (she graduated in 1969). The cost? $86.00.
Twenty years later, 1989, I’m a freshman at the same school, and per quarter, it was $759. I remember because I wasn’t considered in-state until my sophomore year, and that seemed like a magically small number during the year I established residency.
Of course, the only reason my mother went to a state school, instead of her first choice of Vanderbilt, was her parents didn’t put aside money for her to go to college the way they did with their sons (one went to Emory; one went to Vietnam); they only put enough aside to pay for her wedding. But my grandparents were older (born in 1903 and 1909), and women going to college came as a surprise to them. I don’t think they ever let go of their guilt about that.
Eric
An smartphone for a husband and wife is $200/year, plus $100/month for the data plans (probably has more). Each of the kids probably has their own phone at least for emergencies if the parents didn’t splurge and get them their own phones. The annual cost of those phones – expenses which didn’t even exist 20 years ago – is the same as an annual family summer vacation.
Meanwhile, housing and healthcare and education have gotten more expensive. Clothes and food have gotten a lot cheaper. Financing things besides houses and cars became common.
It’s just really hard to compare different eras like this. Incomes have been flat, we know this. But costs have changed – some things have gotten dramatically more expensive, other things cheaper. Priorities have changed. I see more cars and bigger houses and more gadgets and more entertainment spending, and more working adults in a house to support all that.
I suspect that one working adult could probably support a family and live like families of the 1950’s – in the same size house, going out to eat and to the movies no more often than they did then, with one phone line and no cable or internet. But it seems today no one wants to live like that anymore.
FredW
@gex:
I don’t think “stuff” is the cause, but it is a factor, mainly in redefining what is “Middle Class.”
I’m roughly the same age “Cintibud” — my Dad was a professor at a state school in the Midwest. There were three kids in our family and no private schools. We did have less stuff — one TV until I saved money from my paper route to by a $100 Philco so I could watch what I wanted, not what by brothers/parents wanted. And the family TV was black and white.
We took vacations but always by car, usually staying with friends and relatives once there. The first time the family flew together was when I was in 9th grade and my Dad had a visiting gig at NYU. We sold the family car and flew to NYC (and back a year later).
Eating at a restaurant — or even bringing takeout — was a big deal, maybe once a month if that. Mom cooked and we ate at home.
When we had a second car, it was a used VW bug. “New” car every 6 or 7 years (and sometimes that was used)
Our house was small by today’s standards. But my two brothers were born while Dad was in graduate school and we all lived in a tiny Married Student Housing apartment. The house was huge by comparison.
One phone line, no mobiles, no cable TV, no internet — each of those is a small thing but they add up.
Housing is probably the biggest thing, but we’ve also revised our standards upwards – “What! only one bathroom!” — each kid with his/her own room.
Omnes Omnibus
@Eric: In 1950, a family could probably have lived on the wages of a worker from 1900 if they were willing to give up electricity, television, telephone, and an automobile.
gene108
@opie jeanne, formerly known as Jeanne Ringland:
What if people did what their mothers or grandmothers did and not enter the work force, after getting married?
I don’t know many women, who want to stop their careers, even after having kids because it’s an important part of who they are.
I just think somewhere along the line, you can’t separate women working or entering the workforce in larger numbers from the rise of divorce rates and less stable families.
Would the older people’s memories of the 1950’s and 1960’s have been the same, if every other couple in your neighborhood had been divorced, at least once?
The biggest social shift across America, in the last 40 years, is the high rate of divorce in this country.
It has to be factored into any discussion about women and their entry into the workplace.
sublime33
“No one in their right mind can blame women for driving wages down—it’s the fact that until just last year, employers have always been able to legally get away with paying women less, which has been able to drive the wages downward for everyone.”
I think it is a supply and demand issue, with educated women greatly increasing the supply of professional talent, displacing lesser talented men to a lower strata. This started when college educated women stopped getting steered exclusively into teaching and nursing. When women started entering banking, finance, law and accounting in large numbers in the 70’s, it didn’t depress wages in these fields. What it did do was push lesser qualified male candidates who could have gotten hired into, say public accounting in 1969 into a lesser accounting role with a private company in 1984 – for less pay than the preferred job. These men in turn pushed down the high school diploma holders into a lesser role at less pay, and this all proceeded down wind.
Silver Owl
I asked my grandmothers about their lives back then. Maternal grandmother was taken out of school to help with house work and taking care of her younger siblings. Her only way out of that was marriage.
Paternal grandmother married before graduating from high school because that really was her only option.
For both women they wanted more options to choose from.
opie jeanne, formerly known as Jeanne Ringland
@Jamey: Bike Commuter of the Gods: Link to that comment? Because I sure can’t find it.
opie jeanne, formerly known as Jeanne Ringland
@stuckinred: Go to Zillow for a rough idea of what it might be worth. You can probably see what it sold for the last couple of times.
Bill
I read with interest all of the above comments and have a few of my own I’d like to add. I to was born in 1955, my dad moved us to California in 1963, and he was part of the great aerospace engineer migration that took place in the 60’s. Dad was the first in his family to go to college. Mom never worked outside the house. My wife and I are both engineers and both work to be able to afford a modest, 1700 sq feet, tract house, that is I might add smaller than my parents.
What changed?
Somebody convinced the American public that capital gains should only be taxed at 15% and that for some reason investment income was more important than salary income.
Big money bought both houses of congress, and big money stopped paying taxes.
Business got “to big to fail” – what happened to anti-trust laws?
Big business has managed to privatize profit and socialize loss.
White-collar crimes, with a few exceptions mostly when you rip off other wealthy people, are no longer punished.
The social contract between employers and employees disappeared, believe it or not businesses used to worry about the effect layoffs and relocations would have on the communities they were located in.
As a country we stopped making things, I guess the plan was we would all get rich loaning each other money or barely survive by bussing tables.
The other side of any political discussion became “ the enemy that wants to destroy America” not just someone who had a different idea of how things should be done or the money spent.
Science, history and experience are no longer as important as belief.
Education is no longer supported by the state, I went to a four year public University and it only cost me $86 a semester my first year and rose to $112 a semester my last year.
Greed became a virtue and not a vice.
cintibud
@JenJen: Hi Jen Jen, just got out of a meeting and saw your post. I went to Alter – if they still teach today what they taught us then (i.e. how to think for ourselves) Pope Benedict himself would come over and burn the place down.
I got a bit of a lump in my throat after reading your comment and then seeing “my city was gone” quote. I love Dayton and it’s been driven to its knees.
opie jeanne, formerly known as Jeanne Ringland
@liberal: In California they changed the property tax rules with that thing called Proposition 13. It was sold to the voters as a way to keep Granny in her house so that she wouldn’t be taxed out of her home, which was becoming a problem in the 1970s.
What they didn’t tell us was that the same method of determining property taxes would be applied to all businesses too. Think about that, in a state like California. Every huge corporation is still paying property taxes at the 1978 rate, slightly adjusted for local revenue. Disneyland is the company that comes to mind for me when I think of that, because we lived in Anaheim but I am not singling them out. This is true of every large corporation in the state, and that’s a lot of revenue that California has lost.
Monala
I’ll get my snark out of the way first: my folks didn’t have pink Himilayan salt, nor a year-round supply of endive (bet you thought I was going to say arugula).
Housing costs, medical costs, transporation costs, education costs—as a percentage of income—I’m betting were much more reasonable.
I’m glad you pointed this out. The comments above about people’s spending on consumer goods today being part of the problem don’t make much sense.
My family and I have two computers, a laptop purchased during a Black Friday sale for $300, and a used desktop purchased for $90. We each have a basic cellphone, and spend about $100 a month for service; we have no landline. We have an ordinary TV, purchased for about $300. We don’t have cable, and use Netflix and the library for our entertainment. All this, and a few smaller electronics, such as a digital camera, probably cost less than $1,000.
Yes, we’re low-end on the spending, but even higher-end spenders are probably spending a few thousand on such thing (I know there are outliers; I’m talking averages). None of those things are breaking most household’s banks. And food costs as a percentage of household income has gone done signficantly since the ’60s.
It’s the costs of housing, transportation, education and health care that have skyrocketed.
Kathy
What happened? Elizabeth Warren explains it quite clearly. Warren YouTube
Nancy
I think right around the same time that the health of the economy was measured by the stock market and not the unemployment numbers.
les
@D-Chance.:
The frugality gig is, I’m sure, uplifting and righteous. The whole point is that prior generations had prosperity, not frugality–families had the life we’re talking about, without their kids being ashamed and the neighbors laughing. And the reality is that the wealth in this country is increasing nearly as fast as it was in the 50’s. Yeah, houses are bigger–but production is more efficient. With decent equipment and standardized materials, I can do by myself what it took a crew to do in the 50’s, in less time with more predictable outcomes.
The problem is the vast majority of the folks have a vastly diminished share of the pie, looking at both income and assets. GDP per capita is way up, but the capitas don’t have their share of it. Costs, however, are still shared by anybody who wants something. A good post at Lawyers Guns and Money.
Rainy Day
Elizabeth Warren explained EXACTLY what happened a few years ago (and she’s got the charts and data to prove it):
http://www.youtube.com/watch?v=akVL7QY0S8A&feature=related
Chris W
I had never thought of this before.
Right now, my wife and I are able to provide for my daughter pretty much the same lifestyle my parents gave us.
Except:
My mother never worked a single day, and my wife works 60 hours some weeks.
I was one of two children, but I don’t think we can afford to have a second child now.
My brother and I went to private school, my daughter will likely always go to public school.
I also never thought of my father as rich, or well paid for his work, but he had so much more spending power than I ever will from just one income.
Corner Stone
Slightly germane to the topic, I love it on House Hunters when the couple says something like, “Oh, this could be my office.”
It happens on damn near every episode. And I always think to myself, why the fuck do you need 300sqft for a “home office” ?
It’s gotten to the point where I now believe the show’s production crew writes that line into every show so the couple will have to say it.
Anon84
@A Commenter at Balloon Juice (formerlyThe Grand Panjandrum):
Glad to see so many comments reference Elizabeth Warren.
Reality Based Facts & Figures.
http://www.youtube.com/watch?v=akVL7QY0S8A
opie jeanne, formerly known as Jeanne Ringland
@gene108: There is no way to respond to this because it never happened, but there were a lot of divorces even back then in the 1950s, and before the 1920s a lot of abandonments because divorce was such an ugly word, and so expensive.
I have heard that women were restless and so was I because face it, housework is boring. And maybe more men felt better about leaving a bad marriage because their wives had jobs or they thought they could get them, although I noticed that the jobs seemed to follow the divorces in the 1960s and 70s and not the other way around.
I’ll be 61 next week. Very few of my friends got divorced, maybe two couples out of all the people we know, and one of them waited until the kids were out of college; but back then in the 60s and 70s we were already being told that half of all marriages ended in divorce.
My middle child is 31 and her generation seems to have a high early divorce rate; they don’t stick around for more than a couple of years. She got married about six years ago after five years with the guy, and he recently told her he wants a divorce.
There is no way to answer the question because it didn’t happen.
But then, my two grandmothers were born before 1900 and one went all the way through the 8th grade and the other through 5th grade. One grew up with indoor plumbing and electricity and the other did not. Their experiences were as different as night and day.
opie jeanne, formerly known as Jeanne Ringland
@Corner Stone: Or the line, “I can’t cook in this kitchen because the appliances aren’t stainless steel.”
They need to be shown that photo of Julia Child’s kitchen in France when she was attending the Cordon Bleu cooking school.
Ija
One thing I don’t like about “things were so much better in the old days” thread is it eventually devolves into “things were so much better in the good old days when women can afford to stay home and look after the children like they are meant to”. Maybe things were better in the old days, but they were probably only better for WHITE MEN. Other people probably have it better in the good old present day.
Hob
@gene108: In theory, that’s all true. However, the constant demands by employers to raise the H-1B limits in fields where there’s actually a surplus of US workers make it clear that something else is going on. It’s not plausible (at least in the tech jobs I have experience with) that they just can’t find qualified workers here. So what else makes H-1B so attractive to companies?
1. They’re probably not paying the prevailing wage like they’re supposed to. I’m not sure why you find that so hard to imagine, given the general state of labor law enforcement in the US in the last 20 years. Some more specifics on how this might work are in this article (from 2005, but I’d be surprised if things have improved since then).
2. It’s not just about the starting wage. It’s also that a worker on a temporary visa that’s tied to that particular job is under the employer’s thumb in a way a citizen or a green-card worker wouldn’t be. Quitting, or rocking the boat in any way – like pushing for a raise after the employer decides to vastly increase the level of work required – puts them at risk of deportation (and also losing any green card application that they might be pursuing) unless they can immediately find another similar job. So it’s a way to ensure a more docile workforce, should you be at all interested in screwing them over.
Hob
@Eric:
People here keep talking about “the same size house.” Where are are we supposed to find these small, affordable houses? My parents moved 12 years ago to a smallish town, and they were barely able to find anything remotely comparable to the very modest places they lived 40 years ago, and the prices were still insane.
Out of everyone I know under the age of 40, the dream is to maybe get a shoebox with a patch of yard way the hell out of town, or else buy a small apartment just for the sake of security. Or be lucky enough to have a telecommuting job, so you can move to a super-depressed area where things are cheap because there’s no work there.
jake the snake
@James E Powell:
The middle class was brainwashed into believing they would benefit also, as long as “those people” were kept in their place.
Corner Stone
@opie jeanne, formerly known as Jeanne Ringland: Those people blow my mind.
They all seem to make like $50K each and are looking for a $350K+ house wherever they live. All of them want to be near the park, close to public transport, have big backyards, walk in closets, extra space for an “office”, a kitchen with an island, and some kind of elevated view of downtown.
I love the show but once in a while it makes me wonder if it isn’t being faked by the producers.
Jim Chadwick
For the most part, I think you can look at the responses here and the answer might be “All of the above.” My Dad bought our house in the early 50s with help from the GI Bill. (He was a WWII veteran.) I think he paid it off inside of 5 years, if I’m not mistaken. It was a TINY house and I think people today would be horrified by the cramped conditions and the lack of privacy my family endured. My Dad was very frugal (or cheap, depending on how you look at it.) I think there are some excellent points made about why income has shifted, but I also do think that families got by on less. The amount of electronic “necessities” people claim today would have my parents spinning in their graves. And let’s not forget cars, the biggest money suck next to homes. We went for years without a family car, as my dad was able to take a train to work and we bought most of our food from a neighborhood grocery store. I don’t hold these things up as a way things should be. I think my own upbringing was far too Spartan to be healthy. On the other hand, after my Dad passed away and my Mom’s health declined, Dad’s frugality was much appreciated, as her care never became a financial burden for my brothers or me. But people definitely did get by on less. And I think that’s also partly because the parents of the 50s were the Great Depression kids of the 30s who learned to do with very little and remained fearful that what they did have could be taken from them again.
Scott P.
I can’t agree with this. I don’t think multiple smartphones per household is anything near a middle class norm. For the upper middle or upper classes, maybe.
Barb (formerly Gex)
@Martin: Way late, but the housing expansion was largely due to the savings glut which was a result of the shift in income inequality in the first place. People started building houses bigger because they wanted their houses to be investments and have more value and the loose credit was there to allow it. Then the loose credit and easy money got Wall Street to inflate the problem, probably for nearly a decade.
cintibud
Thanks to everyone who replied. I have spent hours deep in thought about this after the great feedback. I especially liked the link to Elizabeth Warren’s lecture. I highly recommend it.
I also noted that this email was discussed by James Joyner on his Outside the Beltway blog from a more “conservative angle” I gave him some feedback there. Those interested may want to check out http://www.outsidethebeltway.com/what-happened-to-the-middle-class/?#comment-1378314
CB
Paul in KY
@tesslibrarian: Wow! 86.00 for tuition. That was when the American dream of affordable education was alive & well. As for going to UGA, everyone makes mistakes ;-)
Paul in KY
@Hob: I work with several H1B workers. All from India. They are uniformly in their late 20s and almost all are very sharp (there’s one or two who aren’t all that).
I think a couple of them (not all) might work for less than market rate due to them coming from wealthy families & being subsidized in some way by their families. Those wealthy ones will return to India at some point. The others are trying to become U.S. citizens.
Carl Nyberg
@liberal:
Maybe in some states property taxes are trending downward.
In Illinois they have increased.
redoubt
My two cents: corporations basically not paying taxes anymore–especially municipal and local taxes–coupled with the concentration of media into only a very few very rich hands, makes it possible to “buy” the airwaves/eyeballs to output one point of view. (Example: what happened to WCFL-AM in my hometown.)
Rupert Murdoch is essentially operating a hobby in the US–none of his properties make any money–but since he and other very rich corporations aren’t really paying taxes, they can spend what they want to change the narrative.
mclaren
The first thing that changed is that from 1946 to circa 1965, America accounted for 50% of the GDP of the planet. The manufacturing and all the factories and most of the skilled workers in Europe and Asia had been blown up and killed off and turned into rubble fields as far as the eye could see.
If you lived anywhere on earth and you wanted to buy a tractor or a radio or a TV set or a welding torch or a car that actually worked throughout the 1950s and much of the 1960s, you had to buy it from America.
When that stopped, when Asia and Europe rebuilt their factories and America’s share of global GDP dropped to where it is now, circa 28%, America’s standard of living dropped by 50%. It’s a simple correlation: when America accounted for around 55% of all the goods and services made and sold in the world the standard of living of the typical middle-class American was about twice what it is today, when America accounts for 28% of all the goods and services made and sold on earth.
I ran some numbers in another post that confirm that simple equation. The minimum wage in 1962 was $1.15 and the cheapest car you could buy in America in 1962 was a VW Beetle at $1295. The ratio of annual salary to cheapest car in 1962 in America was 47%, so you had to work for 47% of a year to buy the cheapest available car.
In 2011 the cheapest car costs around $16,000 while the minimum wage is now $7.25. So in 2011 an American has to work 92% of a year to buy the cheapest available car.
The same applies to houses, rent, almost all durable goods from washing machines to refrigerators. In real terms essentially everything has become at least twice as expensive for middle class Americans since the 1950s/1960s. The only goods for which this equation does not hold are intangible goods like movies and music (download ’em) or electronics (computers, ipods, etc. which can be bought used dirt cheap because next year’s model is so much faster/better).
Graeme
I had this conversation with my dad, but he’s a republican. He started & ended the conversation with: taxes went up.
John Hocking
Republicans have used hate, fear, and lies to trick the middle class, and even many working poor, into voting against their own self-interest.
Taxes on wealth (capital gains, dividends, and the largest inheritances) have all but been eliminated. Only income from work is taxed.
They have used deception, fear, and hate to attack the two fundamental pillars of the most important ideal of American, which is that every citizen should have of a fair chance to succeed. The two tools to make this possible have been decimated. 1. The progressive income tax is far, far less progressive than in the 50s. 2. Excellent public schools level the playing field and are the ticket to a chance for everyone to succeed.
Under Republicans, both are mostly gone.
Who benefits most from a strong military which keeps other countries from marching in and taking what they have? Who benefits most from world class infrastructure, such as the Interstate highway system, the largest construction project in human history?
Obviously it is the wealthy. However, instead of paying their fair share for these things, the cost has been systematically shifted to the middle class.
The Republicans would like to have the middle class and the poor pay all the taxes. A flat consumption tax would accomplish this. Under a flat (“unfair”) tax, someone who earned $60,000 from work would use virtually all their income to buy necessary consumables. The tax rate would be at least $40%, thus they would pay $24,000 in tax. (Those who advocate a flat consumption tax pull figures out of thin air as low as 20% – the neutral CBO estimates 40-45%. Then you’d have state and local sales taxes added to this. The amount could easily be 50% – but we’ll go with 40% so there can be no argument that this is more than projections.)
Someone who was enormously wealthy and made $100 million might consume as much as one million dollars worth of taxable goods and services, although it could easily be far less. They would pay $400,000 in tax.
The middle class worker would pay 40% of his or her income in taxes. The wealthy Republican would pay 4/10th of 1% of their investment or dividend or inheritance income, one, one-hundredth (1/100th) as much.
Under current tax law, the one making $100,000,000.00 pays zero ($0.00) Social Security tax. The $60,000 earner pays 6 1/2%, 13% if self-employed. One of many simple fixes to Social Security, which in about 2040 will begin paying out more than is coming in, would be to tax dividend and capital gains income, and to take the cap off the amount that is taxed – presently, the first $106,000.
Social Security benefits could be raised 50% for *everyone* who is now receiving it, or who will ever receive it. But we can’t do that. The tax paying Republican who makes one-hundred million annually in this example would rather see seniors eat dog food than pay more than zero.
The Republicans have fought Social Security since 1936, when Franklin Roosevelt introduced it, and they are fighting it now. George W. Bush used scare tactics in an effort to privatize it, which would be a way to funnel the money to Wall Street Bankers who could then end it while paying themseves $100,000,000.00 bonus’ that, if they spent a million dollars of, they’d pay 1/400th of it in taxes.