The standard of living is going down for the average American

In summary: Health care costs have been rising faster than general inflation for the last few decades, and they are projected to continue to rise faster than general inflation for the foreseeable future.In summary, according to the article, average American's standard of living has been improving, but this is mostly due to the fact that housing prices have been on the rise. Cost of health care, education, and other costs are projected to continue to rise faster than general inflation, and this is why many people in the US are feeling financially squeezed.
  • #1
Jamin2112
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average American. The economic pie just isn't growing at a fast enough rate to keep up with the population growth. It's interesting how, when it comes to the big costs in life -- housing, health care, education -- everyone is paying more and getting less, yet no one seems to realize this. As long as the average Millennial has the latest iPhone (bought for on credit) and vehicle (leased), he thinks he's better off than his parents.
 
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  • #2
I'll deny it, got any actual statistics to back up your claim?
 
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  • #3
http://www.washingtonpost.com/busin...6f644e-75f2-11e2-aa12-e6cf1d31106b_story.html

Jamin's statement is true mostly for the middle class, according to the article; mostly the second part, since Bush 1's presidency. So, since Milenials are those born after 1982, it is true at least according to this article.

In an informal level, moving up with more than $40000 in loans is not easy.
 
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  • #4
One of the issues to consider though is the rest of the world. For a long time, first world countries (not just the US) have enjoyed an extremely comfortable standard of living because a lot of the goods they purchase come from countries with much lower standards of living. According to the Millennium Project about a billion people in the world earn less than $1 per day and 2.7 billion earn less than $2 per day as of 2006.

As the standard of living for developing countries increases, the prices of imports will increase and thus it would seem those who have been enjoying the benefits of "cheap labour" are necessarily going to pay more for less (or at least the same), therefore the standard of living will go down.

Another factor to consider perhaps is a shift in priorities. I think the younger first world generation is less focussed on material wealth (whether that's a direct result of the fact above or not is up for debate). Apparently there has been a recent shift in job remuneration negotiations from salary to higher weighting on vacation time, and flexible work hours, particularly in younger people (I can't cite a source though).
 
  • #7
...Today, nearly four years after the Great Recession, 12 million Americans are actively looking for work but can’t find a job; 11 million others are stuck working part time when they would like to be full time, or they would like to work but are too discouraged to job-hunt. Meanwhile, workers’ median wages were lower at the end of 2012, after adjustments for inflation, than they were at the end of 2003. Real household income was lower in 2011 than it was in 1989...
 
  • #8
Jamin2112 said:
... housing, health care, education -- everyone is paying more and getting less, yet no one seems to realize this...
So, one side of one of those claims: housing. Here is median and average house size fo the US and by region, since 1973.
https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf

In 1973, the median house size in the US was 1,525 sq ft and in 2010, it was 2,169 sq ft., an increase of 42%. That represents a pretty substantial standard of living improvement by your criteria. I'll let you or someone else look up how cost has varied in that time.

Perceptions - often, feeling-based - do not always equal reality.
 
  • #9
Jamin2112 said:
average American. The economic pie just isn't growing at a fast enough rate to keep up with the population growth. It's interesting how, when it comes to the big costs in life -- housing, health care, education -- everyone is paying more and getting less, yet no one seems to realize this. As long as the average Millennial has the latest iPhone (bought for on credit) and vehicle (leased), he thinks he's better off than his parents.

In the last five years or so, a lot of people in the US have noticed that costs have risen at unsustainable rates for things like health care and education.

Housing prices rose steadily until about 2008-9, but this was primarily due to a bubble created by easy lending policies promoted by big banks and several federal agencies.

In the aftermath of this bubble's collapse, several large banks were driven to the edge of default until their assets were seized by the FDIC, and famous brokerage houses on Wall Street were driven to the edge of ruin, or pushed over the cliff, like Lehman Brothers.

In reaction to the financial carnage which resulted from excessively easy credit policies, home lending standards were tightened considerably, and prospective buyers had to withstand tougher credit checks and provide a substantial down payment (on the order of at least 10% of the purchase price in cash) in order to receive consideration for being made a mortgage loan.

The cost of health care and education in the US have both been rising in excess of the amount of inflation for decades. The perceived crisis in health care costs is what ostensibly drove the creation and passage of the Affordable Care Act in 2010.

The cost of higher education has risen to such levels now that many students are not able to afford a college education without the use of student loans. The total amount of student loan debt outstanding in the US is over $1.2 trillion, which is more than all the outstanding credit card debt. Almost 70% of college graduates leave school owing on some kind of student loan.

http://projectonstudentdebt.org/

http://www.forbes.com/sites/special...s-crippling-students-parents-and-the-economy/

Obviously, unless a graduate with outstanding loans is able to secure a good-paying job and retire this debt quickly, his or her ability to afford the big ticket purchases in life, like new homes and new cars, will be significantly degraded. People without a job and a large amount of debt are probably not likely to start families, either, which has incalculable consequences stretching into the future. People in debt are also unlikely to be entrepreneurial and are unable financially to start a business.

The recession which started in 2008 also saw a surge in energy and food prices. Energy prices have moderated a bit recently, but food prices remain relatively high and are likely to remain so, given the extended drought in California and recent severe winters. It also doesn't help that food crops like corn are being turned into ethanol for fuel.
 
  • #10
WWGD said:
...Today, nearly four years after the Great Recession, 12 million Americans are actively looking for work but can’t find a job; 11 million others are stuck working part time when they would like to be full time, or they would like to work but are too discouraged to job-hunt. Meanwhile, workers’ median wages were lower at the end of 2012, after adjustments for inflation, than they were at the end of 2003. Real household income was lower in 2011 than it was in 1989...
That's a quote from the article you linked. What are you trying to say with it? Are you disagreeing with the OP, because that appears to me to contradict a key claim the OP made...?
 
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  • #11
russ_watters said:
That's a quote from the article you linked. What are you trying to say with it? Are you disagreeing with the OP, because that appears to me to contradict a key claim the OP made...?

No I am disagreeing with your claim that the article I linked to doesn't say anything about the standard of living. Should have quoted your post, my bad.
 
  • #12
WWGD said:
No I am disagreeing with your claim that the article I linked to doesn't say anything about the standard of living. Should have quoted your post, my bad.
I figured you were responding to me, but that's not what I was asking. I'll be more direct, since you gave a partial answer: What does the quote you posted have to do with standard of living? I don't see any mention of standard of living in it.
 
  • #13
russ_watters said:
So, one side of one of those claims: housing. Here is median and average house size fo the US and by region, since 1973.
https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf

In 1973, the median house size in the US was 1,525 sq ft and in 2010, it was 2,169 sq ft., an increase of 42%. That represents a pretty substantial standard of living improvement by your criteria. I'll let you or someone else look up how cost has varied in that time.

Perceptions - often, feeling-based - do not always equal reality.

Don't mean to nitpick, but it would be nice to see more recent data to see the full effects of the housing bubble.
russ_watters said:
I figured you were responding to me, but that's not what I was asking. I'll be more direct, since you gave a partial answer: What does the quote you posted have to do with standard of living? I don't see any mention of standard of living in it.

Sorry, I got to go sleep now, will try to give you a better answer soon. Still, in order to understand data it is good to have the full distribution and not just mean and median; I know unfortunately the census does not include it in its reports, it is a pity.
 
  • #14
WWGD said:
Don't mean to nitpick, but it would be nice to see more recent data to see the full effects of the housing bubble.
Median house size rose again in 2010, so it would appear that the fallout from the housing bubble hit bottom in 2009, at least for that stat. Still, not to nitpick back, but you quoted data from 2011...
Still, in order to understand data it is good to have the full distribution and not just mean and median; I know unfortunately the census does not include it in its reports, it is a pity.
Mean and median what? Income? The census bureau does indeed provide the data by quinitle, not just mean/median.
 
  • #15
The charts found in the attached blog post are troubling:

http://taxprof.typepad.com/taxprof_blog/2015/02/ny-fed-.html

According to a report issued by the NY Federal Reserve Bank, total student loan debt outstanding as of the end of 2014 equaled $1.12 trillion, which is greater than credit card debt, auto loans, and home equity lines of credit (HELOC).

About 2/3 of the student loan debt is held by those under 39 years of age, and the default rate on these types of loans is growing.
 
  • #16
I see a fundamental difficulty trying to relate changes in "real household income" as defined by various bodies to changes in 'standard of living'. If a smartphone didn't exist in 1989 (at any cost), and a median household has at least one smartphone now (not sure if this true, but seems plausible; change median to appropriate quartile if not true), how do you compare standard of living? What is the 'weight' of a smartphone? You could make a ridiculous claim that it is infinite because it could not be had at any price in 1989.
 
  • #17
PAllen said:
I see a fundamental difficulty trying to relate changes in "real household income" as defined by various bodies to changes in 'standard of living'. If a smartphone didn't exist in 1989 (at any cost), and a median household has at least one smartphone now (not sure if this true, but seems plausible; change median to appropriate quartile if not true), how do you compare standard of living? What is the 'weight' of a smartphone? You could make a ridiculous claim that it is infinite because it could not be had at any price in 1989.
That is certainly problematic for quantifying how much better or worse the standard of living is, but fortunately the OP only made the qualitative claim that it is worse. So while quantifying, where possible, is good, it isn't essential. The mere existence of smartphone is an improvement. For others, like cars, can there really be any argument that cars are subjectively better today than in the '70s/'80s?
 
  • #18
SteamKing said:
The charts found in the attached blog post are troubling:

http://taxprof.typepad.com/taxprof_blog/2015/02/ny-fed-.html

According to a report issued by the NY Federal Reserve Bank, total student loan debt outstanding as of the end of 2014 equaled $1.12 trillion, which is greater than credit card debt, auto loans, and home equity lines of credit (HELOC).

About 2/3 of the student loan debt is held by those under 39 years of age, and the default rate on these types of loans is growing.

Shouldn't be a surprising response to the housing crisis that mortgages have tighter restrictions on them now.

I also wonder to what extent this relates to a transitions from home-owning to rent. Rent isn't reported by credit/loan boroughs, but it can be just as expensive (and worse, endless, there's nothing being paid off, just upkeep).
 
  • #19
russ_watters said:
Median house size rose again in 2010, so it would appear that the fallout from the housing bubble hit bottom in 2009, at least for that stat. Still, not to nitpick back, but you quoted data from 2011...

Mean and median what? Income? The census bureau does indeed provide the data by quinitle, not just mean/median.

It is difficult to make definitive claims without the full data, which I will look into. And then there is the issue of defining quality of life; I assumed that real income (adjusted for inflation, even better if adjusted for PPP) would be one component, a necessary component. Then there is debt too: is your quality of life if you have a bigger house or more, better stuff at the expense of substantially large debt?
But then a problem with these threads is that of coming to an agreed-upon definition of quality of life and of what constitutes an improvement.
 
  • #20
WWGD said:
It is difficult to make definitive claims without the full data, which I will look into. And then there is the issue of defining quality of life; I assumed that real income (adjusted for inflation, even better if adjusted for PPP) would be one component, a necessary component. Then there is debt too: is your quality of life if you have a bigger house or more, better stuff at the expense of substantially large debt?
But then a problem with these threads is that of coming to an agreed-upon definition of quality of life and of what constitutes an improvement.
So...does this mean you are retracting/declining to substantiate your agreement with the OP's initial claim, at least for now?

Certainly it is complicated, but I think the vast majority of indicators indicate the OP's claim(s) to be false.

And again, you set a trap for yourself by your seeming intent to focus on income. There is certainly some corellation, but income isn't standard of living. And the income situation is both better than people tend to think and currently on the upswing after a particularly bad recession.

That said, I share SteamKing's student loan and heal care cost concerns.
 
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  • #21
russ_watters said:
So...does this mean you are retracting/declining to substantiate your agreement with the OP's initial claim?

Certainly it is complicated, but I think the vast majority of indicators indicate the OP's claim(s) to be false.

No I am not retracting them, but you have not offered any evidence yourself. I just think that without clearer definitions it is harder to have a productive discussion.
 
  • #22
WWGD said:
No I am not retracting them, but you have not offered any evidence yourself.
I most certainly have, you just didn't respond: cars and houses (other than to nitpick the date: you didn't comment on the stat itself). Still, the original claim came from the OP, without substantiation. You agreed and provided a link, which you are currently declining to explain.
I just think that without clearer definitions it is harder to have a productive discussion.
Fair enough. Since you agreed with the OP, you can provide both the criteria and the evidence you were thinking of when you said it.
 
  • #23
russ_watters said:
I most certainly have, you just didn't respond: cars and houses (other than to nitpick the date: you didn't comment on the stat itself). Still, the original claim came from the OP, without substantiation. You agreed and provided a link, which you are currently declining to explain.

Fair enough. Since you agreed with the OP, you can provide both the criteria and the evidence you were thinking of when you said it.

Read my post #10, where I state that an increase in real income is a necessary (though not sufficient) condition for an improvement in living conditions, and, according to the article this condition does not hold up . And how about you explaining how it is that having a bigger house either correlates or alone constitutes an improvement in living conditions.
 
  • #24
russ_watters said:
That is certainly problematic for quantifying how much better or worse the standard of living is, but fortunately the OP only made the qualitative claim that it is worse. So while quantifying, where possible, is good, it isn't essential. The mere existence of smartphone is an improvement. For others, like cars, can there really be any argument that cars are subjectively better today than in the '70s/'80s?

But the benefits of better cars may be arguably outweighted by the increasing difficulties --because of the drop in real income -- of buying those cars without going into substantial debt.
 
  • #25
WWGD said:
Read my post #10, where I state that an increase in real income is a necessary (though not sufficient) condition for an improvement in living conditions, and, according to the article this condition does not hold up.
You mean post #7? First, you gave two data points, but no details about what connection exists between them. So, were you claiming that incomes have been declining for 30 years? Your quote below seems to imply that...

Second, after criticising me for an obsolete stat, you provided your own. Median income did, in fact, rise in 2012 and 20013:
http://money.cnn.com/2014/08/20/news/economy/median-income/
There should be little doubt that, it rose in 2014 as well, but that data isn't out yet.

Third, income isn't standard of living. The conventional wisdom is that with an inflation adjustment a steady income provides at worst a stable standard of living. The reality, however, is that inflation adjustments are more aggressive than standard of living alone, so a stable income should provide an increasing standard of living. Regardless, since income isn't standard of living, and you're the one who wants to use it as a proxy, you'll have to prove that additional claim of a neutral or negative corellation.
And how about you explaining how it is that having a bigger house either correlates or alone constitutes an improvement in living conditions.
Bigger is better, is it not? The OP listed several different "things" people own that one can judge standard of living by, but didn't provide any details about any of them. I picked one and showed that the OP was pretty substantially wrong about it. But sure, I can expand, since apparently neither you nor the OP are interested in proving your claims:

The OP said "..everyone is paying more and getting less..." and listed housing, health care, education, technology (iPhone), education and cars. Taking them one at a time, it is fairly self-evident that one or both halves (paying more/getting less) of almost every one is wrong -- in most cases, spectacularly, self-evidently wrong.

Housing:
"Getting less"? No: Getting 40% more (data already provided). And that's just the size, it doesn't even include features, which is self-evidently better than decades ago (more houses with central air, appliances, building codes are tighter for better windows and insulation, etc.). I'm not sure if that market has stabilized yet, but prices are also back down to about where they were in the'80s and '90s, before the bubble took hold (note, there has been a slight upward trend over the decades):
http://www.theatlantic.com/business/archive/2014/04/how-did-canadas-middle-class-get-so-rich/361053/

Health Care:
Clearly, we are paying more. Getting less? No: lifespans are up, disease rates/severities are down, we can repair things we didn't used to be able to (my knee, pitchers' elbows), anti-vaxers notwithstanding.

Education:
I assume this meant college. Again, clearly, paying more. Getting less? I've heard it argued that pre-college education is getting worse, but not college. I'm willing to call this one a push, though I would argue education alone isn't a standard of living item, but rather an enabler. Slightly different claim.

Consumer Technology:
We have it -- we didn't used to. Yes, it is impossible to quantify how much better it has made life (however, cell phones are an evolution of the telephone, so that should should be easy to track), but it seems pretty self-evident to me that these are improvements.

Cars:
Really? Do I have to? You'd be hard pressed to find anything about cars that hasn't improved over the past few decades. Safety, fuel economy, features (technology), emissions, reliability, comfort, driveability. And if anything, they've gotten cheaper over time: http://www.investopedia.com/financial-edge/0512/how-inflation-has-affected-the-price-of-cars.aspx

Housing and cars are by far most peoples' largest expenses. Healthcare may be next, depending on age. Together, these represent - to me - the bulk of what one would measure "standard of living" by and they have been, unquestionably, on the rise over the decades.
But the benefits of better cars may be arguably outweighted by the increasing difficulties --because of the drop in real income -- of buying those cars without going into substantial debt.
You can't just make stats up, you have to look them up. You are both claiming a drop in real income with thin, at best, justification* and a rise in car prices, which you are pulling fully out of the air and are wrong about (article provided above).

But even if you were correct about the price rising, it's still a better standard of living to have a better car.

*Really, it's worse than that. The dates are cherry-picked: measuring peak to peak is consistent, peak to trough is cherry-picked to create a false impression of a bad trend. One could easily cherry-pick a start date a year or two or three on either side and get a completely different result. And even if we completely ignore every other data point, that would indicate essentially flat incomes, not declining incomes: You didn't look up the actual stat yet, but 2011 income was only about 1.1% lower than 1989. But again, that's not just out of date, but also ignores all the rises and falls prior and in between. The reality is that incomes are cyclical but tend to rise over time. The Great Recession had a bigger dip than typical, but at the 2007 peak, they were 7.6% above the 1989 peak.
 
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  • #26
I see, so you are able to make "self-evident" statements without any support, but me, I am pulling my facts out of nowhere. And, flat incomes with increasing prices equals going backwards. Or do you state that prices (at least car prices) have remained constant? EDIT: And if prices are going down in general, you have deflation, which is far from being an improvement.

And how about addressing the mountain of debt you are likely to end with after graduation?
 
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  • #27
WWGD said:
I see, so you are able to make "self-evident" statements without any support...
Most of mine did include statistical support. But really, you want to argue the features of cars? You want me to post average life expectancy - it isn't common knowledge to you that it is still rising? C'mon. You're not being reasonable.
...but me, I am pulling my facts out of nowhere.
Yes: If you actually looked-up the facts you are guessing about, you'd see that your guesses are wrong.
[sigh]
Here's the income data. Please look at it for yourself:
http://www.davemanuel.com/median-household-income.php

My point, however, with saying that was to highlight just how bizarre the OP's title claim is when you just put a little thought into it.
And, flat incomes with increasing prices equals going backwards.
You haven't proven either of those claims, nor is that the same as the initial claim.
Or do you state that prices (at least car prices) have remained constant?
Constant or decreasing. From the article I linked:
For that $10,990 you get a car that a driver from a generation ago would marvel at for being loaded with so many extras...

Back to that groundbreakingly cheap Model T from the pre-First World War era, the one that sold for $850. In 2012, using the Consumer Price Index (CPI)to adjust for dollar value, that equals about $22,000. With increased efficiency, the synthesis of cheaper and more durable materials, and economies of scale, the real price of economy cars ought to decline with time. That Vietnam-era Volkswagen Bug sold for the equivalent of $10,500 in 2012 dollars. Give or take a monthly payment or so, and that's about equal to what you'd pay for a brand-new Versa. Except that real income has increased slightly since the Beetle's heyday, and markedly since the Model T's. Henry Ford used to boast that the average working man could own Ford's car for less than a year's salary.
 
  • #28
Listen, I have to admit I should not have had enough time to really give a good answer. I fell behind in my work and I have been neglecting both my work and this debae. I will have to catch up on my work first and then will come back. Still, an increase of living for me (and I think for most in NYC ) is having cities where you do not need a car. I haven't owned one for 10 years and I love the freedom this gives me. So better cars don't do it for me. Maybe affordable flat screen TVs, but better cars, boats, etc. do nothing for me. I will do a full analysis on housing data when I have a chance.

EDIT: Still, you do not believe having substantial school debt , around $43,000 seriously cancels other benefits? How do you pull yourself out of a $43,000 hole? AFAIK there is no refi for school loans.
 
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  • #29
WWGD said:
I will do a full analysis on housing data when I have a chance.
Fair enough.
EDIT: Still, you do not believe having substantial school debt , around $43,000 seriously cancels other benefits? How do you pull yourself out of a $43,000 hole? AFAIK there is no refi for school loans.
I agree that student loan debt is a problem, but it doesn't seem to be showing-up yet in actual standard of living measures, such as being able to afford less house because of too much student loan debt. It very well might int he future though. However, yes, you can refi a student loan: https://studentloanhero.com/featured/5-banks-to-refinance-your-student-loans/
 
  • #30
Jamin2112 said:
average American. The economic pie just isn't growing at a fast enough rate to keep up with the population growth. It's interesting how, when it comes to the big costs in life -- housing, health care, education -- everyone is paying more and getting less, yet no one seems to realize this. As long as the average Millennial has the latest iPhone (bought for on credit) and vehicle (leased), he thinks he's better off than his parents.

I've got a feeling that more or less already discussed:
https://www.physicsforums.com/threads/inequality-maybe-not-so-bad.781050/

Except maybe, that after publishing quite a few data the problem was there was a growth for those who were above median (not evil 1%, but also morally neutral top 10% ;)) and stagnation of the median.

Are we just going to recycle all links from previous topic? Or maybe better also reuse posts? :D
 
  • #31
Czcibor said:
Are we just going to recycle all links from previous topic? Or maybe better also reuse posts? :D
I was considering it, yes. For example, the income data I posted/analyzed:
Inequality - Maybe not so bad?
 
  • #32
WWGD said:
I see, so you are able to make "self-evident" statements without any support, but me, I am pulling my facts out of nowhere. And, flat incomes with increasing prices equals going backwards. Or do you state that prices (at least car prices) have remained constant? EDIT: And if prices are going down in general, you have deflation, which is far from being an improvement.

And how about addressing the mountain of debt you are likely to end with after graduation?

I don't know, but maybe when Russ brings hard data, you should also counter him with hard data? Plus at least for me there is impression that you start to move goalposts. For example he brought data on medium house size / income.
Instead of addressing that you effectively changed your position: "How do you pull yourself out of a $43,000 hole? AFAIK there is no refi for school loans." Maybe I should counter you in your style by claiming, that in those Good Old Days (tm) unquestionably there was less student debt because less people... had tertiary education? ;)

I highly advice you to try to find some economic data to back your point. It would look much more serious.
 
  • #33
Czcibor said:
I don't know, but maybe when Russ brings hard data, you should also counter him with hard data? Plus at least for me there is impression that you start to move goalposts. For example he brought data on medium house size / income.
Instead of addressing that you effectively changed your position: "How do you pull yourself out of a $43,000 hole? AFAIK there is no refi for school loans." Maybe I should counter you in your style by claiming, that in those Good Old Days (tm) unquestionably there was less student debt because less people... had tertiary education? ;)

I highly advice you to try to find some economic data to back your point. It would look much more serious.

I stated that more is not necessarily better and this is a multivariable issue. Discussions about all-or-nothing are pointless; saying everything is worse, or everything better leads nowhere. This is a many-variable statement; even if one can argue that homes/cars are of a better quality for the average person, there are many other components that affect one's living standard. How does it help to have better products available if you cannot afford it or if buying it gets you even deeper into an already substantial debt
http://investorplace.com/2013/09/report-average-american-in-debt-hundreds-of-thousands/#.VOyN8UI3PIU ?

And it is not necessary to have such high loans, it is the result of increasingly high prices for schooling and that it is harder to get loans with reasonable conditions. I never mentioned nor implied I thought the old days were better. And debt is higher _ on a per-capita basis_ , so it has nothing to see with more people having tertiary education.

http://www.usnews.com/news/articles/2014/11/13/average-student-loan-debt-hits-30-000

http://money.cnn.com/2013/12/04/pf/college/student-loan-debt/

You may argue: why not go to a state school, or a cheaper school? Well, whether you get a substantially better education by paying more, having a degree from one of the elite --and more expensive --school opens a lot of doors that a cheaper school does not. And then you also need at least a masters to be considered for most good-paying jobs.

http://www.huffingtonpost.com/steven-strauss/the-connection-between-ed_b_1066401.htmlMy general point is that there is a qualitative component that is difficult to argue for with hard data alone. That is one thing what makes these discussions difficult and technical. An idea for a qualitative component: are there serious laws in effect to help prevent bubbles like those we just had? Has public transportation improved? More roads are not enough when, as in the suburbs, you can barely cross a road, nor walk to a store half-mile away without risking your life. So it is a very complicated discussion to have without setting clear parameters. Pointing out hard data only takes you so far without clear parameters

If you want hard data, here it is; this is no surprise to anyone that real incomes now are at he same level they were in 1989: http://en.wikipedia.org/wiki/Household_income_in_the_United_States
Income went up and then went down, but the OP drew this comparison. EDIT So, in the US, on general terms, life is not better nowadays, having essentially the same buying power now than in 1989. In a capitalist economy, if your real income is not increasing, your life is not doing better. If you argue that prices are going down, then you have deflation and that is a whole different situation.

EDIT: Sorry, I don't know why I keep bringing up 1989, it is a weird thing.

Still, an area where things have gone backwards is that one used to be able to live a reasonably good life and have a good income, without a college degree. Not anymore.
 
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  • #34
WWGD said:
I stated that more is not necessarily better and this is a multivariable issue. Discussions about all-or-nothing are pointless; saying everything is worse, or everything better leads nowhere. This is a many-variable statement; even if one can argue that homes/cars are of a better quality for the average person, there are many other components that affect one's living standard. How does it help to have better products available if you cannot afford it or if buying it gets you even deeper into an already substantial debt
http://investorplace.com/2013/09/report-average-american-in-debt-hundreds-of-thousands/#.VOyN8UI3PIU ?
You already quoted data that median income slightly grows up (with serious ups and downs). So the problem is that people borrow more to consume even more? I mean if they just wanted to keep their spending unchanged they would actually have savings, but they chose otherwise.

Would you like to force your compatriots to save more? (Not a rhetoric question, just curious. Maybe a gov enforced individual rainy day account is something to think about)

I'm not American (Polish) and my spending habits are terribly un-American. I have no debt, no car (go to work by bus) and some savings, even though median American earns many times more than I do. I have never purchased anything using loan and I answer this post using an ancient laptop with linux.

And it is not necessary to have such high loans, it is the result of increasingly high prices for schooling and that it is harder to get loans with reasonable conditions. I never mentioned nor implied I thought the old days were better. And debt is higher _ on a per-capita basis_ , so it has nothing to see with more people having tertiary education.

http://www.usnews.com/news/articles/2014/11/13/average-student-loan-debt-hits-30-000

http://money.cnn.com/2013/12/04/pf/college/student-loan-debt/

You may argue: why not go to a state school, or a cheaper school? Well, whether you get a substantially better education by paying more, having a degree from one of the elite --and more expensive --school opens a lot of doors that a cheaper school does not. And then you also need at least a masters to be considered for most good-paying jobs.

http://www.huffingtonpost.com/steven-strauss/the-connection-between-ed_b_1066401.html
So everyone wants (increased demand) to go to the best school (by definition limited supply) and their cost goes up? And additional money from loans just boost the price? Shocking, isn't it?
My general point is that there is a qualitative component that is difficult to argue for with hard data alone. That is one thing what makes these discussions difficult and technical. An idea for a qualitative component: are there serious laws in effect to help prevent bubbles like those we just had? Has public transportation improved? More roads are not enough when, as in the suburbs, you can barely cross a road, nor walk to a store half-mile away without risking your life. So it is a very complicated discussion to have without setting clear parameters. Pointing out hard data only takes you so far without clear parameters
Depends what you ask for. For preventing real estate bubbles typical economist answers involve:
-curbing tap with cheap loans (like no more loan with LTV above 80%);
-land value tax.

In the same way mass transport usually needs gov subsidies that have to be paid in taxes.

(my point is that you may also dislike the other idea)

If you want hard data, here it is; this is no surprise to anyone that real incomes now are at he same level they were in 1989: http://en.wikipedia.org/wiki/Household_income_in_the_United_States
Income went up and then went down, but the OP drew this comparison. EDIT So, in the US, on general terms, life is not better nowadays, having essentially the same buying power now than in 1989. In a capitalist economy, if your real income is not increasing, your life is not doing better. If you argue that prices are going down, then you have deflation and that is a whole different situation.
Why do you cherry pick peak year of 1989 and not try to make a trend line? Not mentioning that you compare this year with somewhere around bottom of crisis (2012)?

As typically used metric for improvement there is often used HDI. According to it there was some improvement in standard of living in the USA:
http://hdr.undp.org/sites/default/files/Country-Profiles/USA.pdf

(This metric actually shows progress in years 1990-2012.)
 
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  • #35
Jamin made a series of three pairs of claims, and I think Russ made the point that this is contrary to the evidence for two of them. Let me attack the third:

College prices have gone up faster than inflation. So has financial aid. If you have a system where the tuition is $15K per student, and change it to one where the richest half pay $20K and the poorest half pay $20K with a $10 scholarship - so their net payment is $10K, has tuition really gone up 33%?

It is true that post-financial aid, college costs have grown faster than inflation. However, student/faculty ratios have fallen. So one pays more and one gets more.

It is also true that students do not work as hard (measured by self-reported time spent studying) as in the past. One could argue that this means they get less, and I don't think I would disagree with this. Why did this come about? Because students demanded it, and colleges compete for students.
 
<h2>What is the standard of living?</h2><p>The standard of living refers to the level of wealth, comfort, material goods, and necessities available to a certain group of people or society.</p><h2>How is the standard of living measured?</h2><p>The standard of living is typically measured by factors such as income, access to education and healthcare, housing quality, and overall quality of life.</p><h2>Why is the standard of living going down for the average American?</h2><p>There are a variety of factors that can contribute to a decrease in the standard of living for the average American, such as stagnant wages, rising cost of living, and economic downturns.</p><h2>What are the consequences of a decrease in the standard of living?</h2><p>A decrease in the standard of living can lead to financial struggles, decreased access to resources and opportunities, and overall lower quality of life for individuals and families.</p><h2>What can be done to improve the standard of living for the average American?</h2><p>Policies and initiatives that aim to increase wages, provide affordable housing and healthcare, and promote economic stability can help improve the standard of living for the average American. Additionally, addressing systemic issues such as income inequality and lack of access to education can also contribute to improving the standard of living.</p>

What is the standard of living?

The standard of living refers to the level of wealth, comfort, material goods, and necessities available to a certain group of people or society.

How is the standard of living measured?

The standard of living is typically measured by factors such as income, access to education and healthcare, housing quality, and overall quality of life.

Why is the standard of living going down for the average American?

There are a variety of factors that can contribute to a decrease in the standard of living for the average American, such as stagnant wages, rising cost of living, and economic downturns.

What are the consequences of a decrease in the standard of living?

A decrease in the standard of living can lead to financial struggles, decreased access to resources and opportunities, and overall lower quality of life for individuals and families.

What can be done to improve the standard of living for the average American?

Policies and initiatives that aim to increase wages, provide affordable housing and healthcare, and promote economic stability can help improve the standard of living for the average American. Additionally, addressing systemic issues such as income inequality and lack of access to education can also contribute to improving the standard of living.

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