New Study Shows We Really Are Worse Off Then Our Parents

[Makalakumu]

[URL="http://www.economicmobility.org/newsroom/"]http://www.economicmobility.org/newsroom/[/URL]

According to the report, men who were in their thirties in 1974 had median incomes of about $40,000, while men of the same age in 2004 had median incomes of about $35,000 (adjusted for inflation). Thus, as a group, income for this generation of men is, on average, 12 percent lower than those of their fathers’ generation. While factors other than cash income also contribute to economic mobility, these data challenge the two-century-old presumption that each successive generation will be better off than the one that came before. The findings rely on new analysis of U.S. Census Bureau data.

They aren't taking into account so many things. First of all, it takes TWO incomes to get by these days, so this 12% really isn't inflation adjusted or even adjusted for everyday life. Secondly, they aren't taking into account the things that have grown faster then inflation....health care, higher education, energy prices, etc.

IMHO - the picture would be a lot bleaker if this was taken into account. Anyway, this alone is alarming. What does this say about the viability of the American Dream?

Your thoughts?

 

[CoryKS]

I don't know who 'we' is, but I am much better off than my parents.

 

[Carol]

I don't know who 'we' is, but I am much better off than my parents.

Same here.

 

[Flying Crane]

well, the runaway housing market here in the San Francisco area is a big factor. When it costs close to a million dollars to buy a broken down shack (no exaggeration), even if my inflation adjusted income were much higher than my father when he was my age, we would still be completely unable to do it. As it is, we barely even dream of it now.

 

[Makalakumu]

We as in "average joe." Also, I wonder if you looked a little deeper, you might be putting a rosy color on things. Think about the money you pay for education, health care, energy prices, all of the things that have risen faster then inflation.

It's staggering when you think about it.

This is a program that was on NPR this morning. Check out some of the resources at the bottom of the page for more info on this.

You can listen to the call-in show here.

 

[CoryKS]

We as in "average joe." Also, I wonder if you looked a little deeper, you might be putting a rosy color on things. Think about the money you pay for education, health care, energy prices, all of the things that have risen faster then inflation.

It's staggering when you think about it.

This is a program that was on NPR this morning. Check out some of the resources at the bottom of the page for more info on this.

You can listen to the call-in show here.

There is no "average joe". We're talking about real people. Individual actions determine individual results. Now if you want to lump everyone together and take the average, maybe the headline should be "some people are worse off than their parents". But I'm not ready to wail and rend my clothes because someone else's kid is bringing down the numbers.

 

[Kacey]

I don't know who 'we' is, but I am much better off than my parents.

Me too.

well, the runaway housing market here in the San Francisco area is a big factor. When it costs close to a million dollars to buy a broken down shack (no exaggeration), even if my inflation adjusted income were much higher than my father when he was my age, we would still be completely unable to do it. As it is, we barely even dream of it now.

That sucks - and some of it has to do with the location; I have a single income, and I own a house, and while Denver is a high cost market, it's nothing like what you're describing.

 

[Flying Crane]

In my own case, I realize that a bit of perspective is necessary, and the assessment does not carry across the board.

For example, in the little daily things, I know we are much better off than my parents were at my age. We think nothing of going out to eat at a decent restaurant, at least a couple times a week, while my parents always ate at home. It is much easier for us to buy things like a CD or DVD on a whim, while my parents would not have bought a cassette tape or VHS tape, and didn't even have a VCR until much later than most. We can spend the money to go to a movie much more easily than my parents did, even tho movies cost much more. We also travel and pursue expensive interests like scuba diving much more freely than my parents did at my age.

It is the very big things that, at least in my area, are out of our reach. The housing market is just simply out of our reach, no matter what. But my parents bought their first home when they were in their late 20s, while I am 36 and have no hope of buying a home in my city, or even anywhere near my city.

A couple other factors work into this picture, however. My parents had 5 kids, and we have none, and I expect that goes a long way in us having money to spend on the little things on a daily basis.

On the other hand, we are a fully two-income family, I work for a big financial company, and my wife is an attorney. My mother did work and bring in some income, but never at the same level as my wife does. You could say that my parents were mostly a single-income household for much of the time.

I think these factors fill in the picture more fully. Given our larger income at this age and no children, I would definitely expect to be able to spend more easily on the daily little things. But I would also expect to be able to realistically buy a house and pursue that aspect of the "American Dream". That arena in particular is just so screwey and messed up.

 

[Sukerkin]

It is in fact an economic truism that we (as in the 'adult' generations of 'now') are not in fact better off than our parents.

From my own experience, my salary is only about the same as what my (semi-skilled) father used to earn, despite the fact that I'm in a highly skilled profession doing what only perhaps a few dozen people in the country can do.

In order to make ends meet, both my partner and I have to work whereas my father comfortably supported a family of five on his wages alone.

The closing argument is that my father bought his house when he got married ... he paid cash for it. My mortgage is such that I shall just about finish paying it off before I retire (and it eats more than 50% of my monthly income).

EDIT: Ah, I see FC has made much the same points as me but I was a little later to the posting-party :lol:.

 

[Ceicei]

Plus who invented interest?? Interest, IMHO, does not benefit the "people"; it benefits the corporations. Interest does more harm than good. Look at how much a person would have spent when their homes/vehicles/large purchases are finally "paid off". :barf:

This could easily be made into a separate thread discussing the issues of interest.

- Ceicei

 

[Flying Crane]

Plus who invented interest?? Interest, IMHO, does not benefit the "people"; it benefits the corporations. Interest does more harm than good. Look at how much a person would have spent when their homes/vehicles/large purchases are finally "paid off". :barf:

This could easily be made into a separate thread discussing the issues of interest.

- Ceicei

exactly right, which is why I kicked my own *** to get my college loans paid off as quickly as possible, and insisted that my wife do the same to get her lawschool loans paid. I was able to single-handedly pay my college loans (about $35,000) in about 4 years, and once we were married, my wife and I paid off her lawschool loans (about $65,000) in about 4-5 years as well with some help from her family, and we did the same for our car when I received a small inheritance when a family member passed away.

Get rid of debt, don't pay the interest. If you pay the interest for the full term on a long term loan, you will usually pay at least 50% more in the end, and it could be almost double the original loan.

 

[FearlessFreep]

Same here.

Here too.

 

[Nobody]

The part of we that is me is not making it, not even anywhere close to what my dad made when he was my age!

Ah! An those school loans an credit cards are probably never going to get payed with the way things are a going. Look out debtors prison here i come! Yes this just plain bother me, wow is me! I just can not find any job above low pay as 7 usd an hour just ain't going to get it ever.

I don't get it honestly how to even start at a job/career or find one, i think i just don't know how to sale my abilities to a company.

Yea! i am not happy about it at all. Right now at the age i am i should have some type of a life- a house, a wife you know the rest but owe well some people just fail to get it!

I don't really know how to get an maintain employment, that pays enough to live.

I will probably keeep trying.

 

[Carol]

Like me, my mother was also college-educated but didn't have anywhere near the professional respect and career opportunities that I have as a professional woman currently.

Personally I am doing better than both my parents combined. Now if I only hadn't lost the condo to divorce...grrr...

 

[Kacey]

The other thing to consider, of course, is that individuals can buck the trend without changing the concept. Just because some of us are doing better than our parents does not change the general trend.

For example, part of why I am doing better than my parents is because I have had the same job for 11 years - my father only kept one job longer than 3 or 4, and while, granted, that stretch lasted 8 years, when he lost a job, we tended to move, usually to another state. Added to which, I am much better at budgeting than he or my mother ever have been.

 

[tellner]

There really isn't any doubt. By all measures (this study is only one of many) real median income peaked in the early 70s. Household income has fallen somewhat and that's, as he points out, with two wage-earners. The debt-to-income ratio is higher than ever. The percentage of income spent on interest payments is out of sight. The percentage of the population covered by health insurance and the percentage with pensions provided by work is lower than it has been in at any time in the last half century. The percentage of those living below the poverty line is up.

At the same time wealth and income inequality are the highest they have ever been. We resemble a Third World country more than we do any of the developed nations.

These are all absolutely indisputable.

 

[Nobody]

I have no! :whip:verkill:

health insurance and with pensions provided

What exactly are these.:yinyang:

 

[CoryKS]

The other thing to consider, of course, is that individuals can buck the trend without changing the concept. Just because some of us are doing better than our parents does not change the general trend.

For example, part of why I am doing better than my parents is because I have had the same job for 11 years - my father only kept one job longer than 3 or 4, and while, granted, that stretch lasted 8 years, when he lost a job, we tended to move, usually to another state. Added to which, I am much better at budgeting than he or my mother ever have been.

Yep. And that's really the point - that some people make better choices than others. That's why I take exception to articles like this that suggest that 'we' are worse off. Because it suggests that the problem is endemic to the system rather than a result of people's financial choices.

To the posters who say they are worse off than their parents: were your parents spending money on internet access and martial arts lessons? Cable tv? CDs & DVDs? Cell phones? We must be the only 'Third World country' where the po' folk dress in Sean Paul.

 

[shesulsa]

My father obtained a six-figure income and Company Officer status (Vice President) with an incomplete high school education. It was after he left that position and took up real estate as a side hobby that he had to obtain his GED because it was required in California for a real estate license. Point me to someone who could do that today that didn't invent some incredibly useful gadget or software package.

With an incomplete college education, it has been nigh impossible for me to obtain decent employment - and certainly not in any kind of supervisory capacity - with two years of college.

Interest rates, increased taxes, energy scams, Reaganomics, creative loaning and legalized loan sharking along with the increased cost of education .... Man!

I think we're a bit better off than our parents were but mainly because my husband was smart about some real estate decisions he made as a young man, the five jobs he had at 17 years of age, the luck of the draw that the company he works for is still a union job and hasn't been bought out in the 25 years of his employ there, and the fact that we refuse to buy every single little gadget and cable we don't even watch.

 

[Blotan Hunka]

I dont know how some people can go on living when all I ever seem to hear from them is how much life sucks, how the planet is being destroyed, how Bush is turning the US into the third reich, 9/11 was a government plot, we are worse off then our parents economically, peak oil is going to have us in a Mad Max situation shortly, etc, etc, etc.

I cant determine if its fear, a dark obsession with the negative, warped Liberalism or what. There has always been and will always be things wrong with the world, and while they shouldnt be ignored, focusing all your thoughts on them is not the way I want to approach (or live) my life.