In “After Shock”, Robert Reich discusses how ‘middle class households’ have not achieved an increase in ‘real’ (inflation adjusted) earnings over at least the past there decades. He then suggests that the problem is more serious than appears, because
(1) In 1966 20% of mothers worked but that grew to 55% by the late 1990s;
(2) By the first decade of the current century, the average family put in a full twelve weeks extra work than it did in 1979 and, although he does not cite specific figures, the typical individual put in many more hours than in the past, 350 more hours annually than the typical European workers;
(3) Because of the natural desire to do better for the next generation and the unavailability of earnings to achieve this traditional American reality, the household savings rate plummeted from 6% in 1994 to only 2.6% in 2008.
Some conservatives like to “tut tut” the population for taking on too much credit card and housing debt, and certainly in some cases this may be justified. But in the face of rising housing values and the history of providing a better life style for family and especially children, it is understandable that a large portion of hard working parents expected and sought to provide a higher living standard.
Did any adult today grow up with the understanding that they would be worse off economically than their parents and that their children would be worse off than them? Do our youngsters believe they will be better off than our generations? Is a bleak future the American way?
Even worse, Reich does not believe that the forthcoming recovery will restore prosperity unless and until we redress the fundamental problems that have grown unchecked over the past few decades.
More on Reich’s views and a recapitulation of the causes of precipitous decline of our nation later.
