Squeezed?

[prognastat]

I would say there are a lot of factors at play some of which people have some control over and some they don't.

People definitely would be taking these shifts less hard if they were able to manage their spending, however things have also changed to where it is more important not to make mistakes and although the situation has shifted quite rapidly our social script hasn't kept up. A good example being the script of going to college and getting any degree no matter what it's in and how much it costs despite this not being a guarantee of a job any more as more people going to college has decreased the value of all degrees and there are also more degrees that simply aren't worth the price of admission. However many still go, because culturally most still follow the script that getting a degree is how you position yourself for a good financial future.

And yes, some products such as computers, cellphones and TVs have gotten much cheaper. However income hasn't grown at the same rate as housing, education and healthcare(though some might argue this is due to an increase in the available procedures) in many location.

There's also the problem that there is a certain growing percentage of people who simply aren't able to outpace automation. Not every factory worker or truck driver is going to be able to be retrained to be a software engineer.

[Campitor]

And yes, some products such as computers, cellphones and TVs have gotten much cheaper. However income hasn't grown at the same rate as housing, education and healthcare(though some might argue this is due to an increase in the available procedures) in many location.

There's also the problem that there is a certain growing percentage of people who simply aren't able to outpace automation. Not every factory worker or truck driver is going to be able to be retrained to be a software engineer.

When you look at housing, education, and healthcare, the services they are expected to provide has grown; and the growing population (legal and illegal) puts pressure on the limited human capital in education, housing, and healthcare. Artificial scarcity in education (moats created by seniority), housing (throttling the number of trade licenses by inflating training requirements), and healthcare (expensive cost of education, number of hours required to work as an intern, high insurance costs) guarantees high prices.

And those factory workers and truck drivers could be our tradesman of the future - robots won't be doing those jobs anytime soon.

[jennypenny]

The number of women entering the workforce went up by almost 50% during the 40 years of wage decline jacob mentioned. That probably helped to offset the decline (and contribute to it), and also lead to families paying for services that used to be done by the SAH partner (and getting used to paying for them). Employment rates have declined for women as well as men over the last 10 years, which might explain why some families are losing significant ground 'suddenly'.

I'm not blaming the victim here. I'm only pointing out that developments like women entering the work force came with a higher price tag than originally thought; they helped to mask real wage decline the same way that lower interest rates mask the gravity of the debt problem and shiny iThings mask the lack of real innovation over the same 40 years.

Is it better to prop up the middle class or force everyone back into pre-1980 living standards and customs? I'm not sure.

[IlliniDave]

http://www.pewresearch.org/fact-tank/20 ... r-decades/

I can't speak to the veracity of the numbers from the link, but assuming they are correct, real wages have basically been flat for my entire life. What that would imply is that a single-income family could afford approximately the same absolute lifestyle now as they could 50 years ago. That would have been maybe a modest house (800-1200 sq ft), one car, one TV, a telephone, and an annual 1-wk by-car vacation--in other words, the middle class I grew up in. On $44,000 today that seems reasonable ($22.65/hr). "Stagnant wages" isn't necessarily bad when the basis for comparison is being in the top 10 wealthiest societies. So it still seems to me that the "middle class" lifestyle has inflated beyond objective middle class means and maps better to an upper class lifestyle going back to the 1960s and prior. In a sense it's not the middle class getting squeezed so much as it is the middle income earners smashing themselves against the wall at the end of their money. It would be nice if real wages for the lower and middle income groups would grow, but it will take a supply/demand imbalance for that to happen, which right now is a political field of land mines. The demand side is strong, but who knows if it will last long enough to make a difference.

[7Wannabe5]

So it still seems to me that the "middle class" lifestyle has inflated beyond objective middle class means and maps better to an upper class lifestyle going back to the 1960s and prior.

Yes and no. My father grew up in an upper-middle-class household in the U.S. in the 1930s/40s and one of the things people keep turning around is the notion that "getting ahead financially through education" is an upper-middle-class value. It's not. It's a lower-middle or middle-middle-class value. The upper-middle-class traditionally values education for the sake of education.

My mother came from a working class background and was the first in her family to attend college. My parents engaged in a huge raging battle circa 1977 (40 years ago), because my father believed it was better to remain in a smaller house and accumulate equity elsewhere, and my mother wanted to buy one of the early-version McMansions and fill it with new furniture. Therefore, it was very much impressed upon me as a child that obtaining a liberal education and quiet, rather than ostentatious, accumulation and maintenance of capital were behaviors in alignment with upper-class values and conspicuous consumption absolutely was not.

I am pet-sitting for my DD27 and her fiance this weekend, and I just noticed that there is a New Yorker jigsaw puzzle on their coffee table. So, am I to suppose that they are desperately attempting to signal "aspirational class" OR that maybe one of them grew up in a house full of books and musical instruments and the other spent his childhood touring museums with his parents? They just purchased a house that is less than 800 square ft., but located vaguely within the confines of a university district.

[Clarice]

one of the things people keep turning around is the notion that "getting ahead financially through education" is an upper-middle-class value. It's not. It's a lower-middle or middle-middle-class value. The upper-middle-class traditionally values education for the sake of education.

Among my close friends I count quite a few people who have graduated from MIT. Additionally, I live in an immigrant, predominantly Asian, neighborhood with the most common bumper sticker being IIT Bombay. All these people repeat, "STEM education" to their children until they turn blue in the face. If what you say is correct it means that it takes MIT (or similar place) to maintain a middle class life in now day America. That's quite a slide compared to the 50s.

[Gilberto de Piento]

One factor I have wondered about (which may have been mentioned above, I didn't read all of the posts) is the impact of people retiring later and later (for any reason). This means that there are fewer jobs to go around, fewer positions to move up to (because the upper ranks are filled until people retire), and lower wages (because the older people are at the top of the scale). I don't have any data to back this up but I see it a lot.

[7Wannabe5]

Among my close friends I count quite a few people who have graduated from MIT. Additionally, I live in an immigrant, predominantly Asian, neighborhood with the most common bumper sticker being IIT Bombay. All these people repeat, "STEM education" to their children until they turn blue in the face. If what you say is correct it means that it takes MIT (or similar place) to maintain a middle class life in now day America. That's quite a slide compared to the 50s.

Honestly, I'm not sure if what I am saying is correct. I just sense that a lot of what is being said by other people is not quite correct. My paternal grandfather and great-grandfather did have educations and/or careers roughly equivalent to attending MIT today. All the other branches of my family tree would have been coal mining in Pennsylvania, or digging potatoes in Poland, or something similar in 1900. So, my Bohemian sister with the most socialist leanings claims to be from a working class background, even though both of our parents eventually acquired graduate degrees, and they paid for at least 10 years of ballet and piano lessons for her

While your neighbors chant "STEM education", Jacob recommends "appropriate" Renaissance portfolio, and Peter Diamandis, one of the authors nominated as most anti-Jacob, writes:

Most of today's educational systems are built upon the same learning hierarchy: math and science at the top, humanities in the middle, art on the bottom. The reason for this is because these systems were developed in the nineteenth century, in the midst of the industrial revolution, when this hierarchy provided the best foundation for success. This is no longer the case. In a rapidly changing technology culture and an ever-growing information-based economy, creative ideas are the ultimate resource. Yet our current educational system does little to nourish this resource.

So, who is right?

[Campitor]

@7wb

I think both are right. There needs to be an amalgamation of art and science. One without the other is less than the whole. Hence the need for Renaissance thinking.

[7Wannabe5]

I think both are right. There needs to be an amalgamation of art and science. One without the other is less than the whole. Hence the need for Renaissance thinking.

Right. I think my point is that no matter how much money you have, you can't achieve much better quality of life than a member of the affluent, educated class in any era. So, that is why my DD27 is at best treading water relative to her own great-grandparents. In a funny way, this observation does constitute an argument in favor of taxing the very wealthy, because if somebody can't conceive of how to live the good-enough life on 10 million dollars, then 20 million is not really going to help much.

[Clarice]

@7wb5:
Imagine what kind of IQ would get you to IIT Bombay and then to Sillicon Valley? Now get this - all these people live in the houses owned by orchard workers in the 60s. What happened to the kids of those farm hands? Exactly! They got squeezed.

[7Wannabe5]

@Clarice:

Well, it can go the other way too. My grandparents were eventually squeezed out of their upper-middle-class neighborhood in Detroit by the fallout from the race riots of the 1960s. The irony being that my grandfather was one of the powerful white men highly engaged in political and legal issues having to do with the black community in earlier decades. Further irony would be that my father couldn't quite afford to buy a house in his parent's lovely urban neighborhood at that juncture, so he was saved from losing his shirt by being squeezed out to the suburbs.

What will happen to the children or grandchildren of the IIT Bombay immigrants when/if the high-tech industry goes the way of the automotive industry? This analogy only holds if they are just trained to pipe together code like auto workers on an assembly line. Creative application of intelligence is what will save them.

My friend who grew up as one of 13 children on a barely sufficient farm, went to university on a scholarship, found himself eating out of a dumpster at age 27, and then went on to make almost 100 million, made one hugely critical error if wealth transmission to great-grandchildren was his goal. His only child was born in prison to the young junkie prostitute he chose as a "partner" at the age of 40. It's hard for me to imagine how this girl is not going to be fleeced dry within her own lifetime. If he had instead chosen to marry a woman who was more peer, her likely insistence on being provided with a lifestyle better than that of the junkie prostitute for herself and her children, might have crimped his investment earning potential, but IMO, would have overall improved his odds of successful wealth transmission to future generations. For instance, even though my grandfather passed down very little wealth, and his second son was a radical rogue black sheep intellectual who never made any money, one of my younger cousins is a very successful "Asian" (mother was Filipina)whiz kid in Silicon Valley.

I am sort of obsessed with the mechanisms of transmission of literacy due to my recent work attempting to teach basic reading skills to some of the kids who are still living in the blighted neighborhoods of Detroit 3 generations after the riots. How dystopian would the future have to become in order to render the majority of the great-great-grandchildren of the members of this forum illiterate?

[Clarice]

@7wb5:
"the other way around" is fascinating; I've always said Silicon Valley will follow Detroit and always got blank stares. If you are interested in mechanism, which might make the great great grandchildren of the members of this forum illiterate I highly recommend The Art of Not Being Governed by James C. Scott. The book, among other interesting things, details the situations, in which illiteracy is beneficial.

[7Wannabe5]

The Art of Not Being Governed by James C. Scott.

Added it to my list. I read "Against the Grain" and found it quite interesting, if not entirely convincing.

[jennypenny]

A Big Think video on the struggling middle class (that annoyed me and I can't figure out why) ... https://www.youtube.com/watch?v=mQQG7y5zj10

I understand her point that people shouldn't feel stigmatized, and many have pointed out how separated social classes are these days. Still, I knew her assumptions were wrong and I couldn't figured out exactly how. What am I missing? Part of it is the assumption that because wealth has suddenly become concentrated at the top, people in the middle are completely absolved of any responsibility in their own plight. Also, rules/conditions change and you have to keep up. That said, I feel guilty for dismissing her point of view ... like I'm being too hard on middle class folks who are struggling.

Maybe it's just that I always dislike portraying everyone who isn't wealthy as a victim of the system.

[Stahlmann]

... and many have pointed out how separated social classes are these days ...

C'mon...
You're living in country where 50 milion people use food stamps and on the other hand people buy 4k USD furniture (even here on this forum)...

[7Wannabe5]

@jennypenny:

I found the video pretty lame too. I think many people are clutching at straws to explain their discomfort with change. My experience might be somewhat unique, but I don't share her perspective that social classes are becoming increasingly separated. It seems to me like there is a lot of opportunity up for grabs, but some of the old straight paths have broken or meandered. Funny thing is my friend who is in the top .1% is one of the people who I have most frequently heard state that it is very difficult for an average person to get by these days, while almost every Uber driver I have chatted with has told me that they really like the autonomy offered by the gig economy.

I am reading "Flyover Lives" by Diane Johnson (one of my favorite novelists), a genealogical memoir in which she explores and quotes letters and diaries written throughout the course of over the last 200 years by her Middle-Class Midwestern WASP ancestors. One of the conclusions that could be drawn from this memoir is that it has never been particularly easy to maintain membership in the middle-class, yet people do persist in the quest. So, for instance, in 1826 a young doctor trying to find a town in which to start a practice so that he can afford to marry writes to his schoolteacher betrothed that he had decided not to settle in Kentucky, because the people there were "of the lower class and very rough and uncouth and different from what (she) had been accustomed to." In the 1940s, the author's own parents have to struggle a bit to make ends meet, but enjoy playing bridge and golf and vote Republican like almost everybody else they know in Moline, Il.

Maybe we are just suffering from a perspective that does go back to some golden peak in 1958, but not much further.

[Clarice]

@jennypenny:
Thanks for the link. I like one part of the headline - "1% TV"; seems like an easy fix - cut the cable. Many people in the middle class are squeezed between the assumed trajectory and the reality.

There is an old funny little book Class: A Guide through the American Status System by Paul Fussell. Then, in 1982 he identified 9 classes:

Top out-of-sight
Upper
Upper Middle

Middle
High proletarian
Mid-Proletarian
Low Proletarian

Destitute
Bottom out-of Sight

At the end of the book he proposed a solution that he called, "The X way out", which I would sum up as,"Be educated, interesting, and drop out of the rat race." It's valid and in a certain way similar to ERE, yet... I still feel you can not escape it even if you would love to.

I wonder if any members of this forum would be willing to peg themselves. I'll start... middle, not squeezed in any way. I'm gonna be conned when DD goes to college, but not squeezed. I am disconnected from institutional levers of power, therefore, I am not upper. I am not lower because I have a graduate degree, medical insurance, savings and assets. What about you?

[IlliniDave]

I think it depends on what the criteria are. In terms of income, I suspect I would fall into upper middle if the comparison is limited to the rest of the US. Probably about the same when it comes to wealth accumulated. If it is measured by everyday consumption and finery I'd estimate a lower middle class lifestyle, maybe even upper proletarian. In terms of position within social power/influence hierarchies, somewhat lower even than that.

In terms of intangibles I'd go back to upper middle. That's in part related to wealth accumulation, admittedly. But I don't feel a lot of external pressure, or like I'm a victim, and in a day-to-day sense tend to feel contentment rather than sense of lacking.

[IlliniDave]

A Big Think video on the struggling middle class (that annoyed me and I can't figure out why) ... https://www.youtube.com/watch?v=mQQG7y5zj10

I understand her point that people shouldn't feel stigmatized, and many have pointed out how separated social classes are these days. Still, I knew her assumptions were wrong and I couldn't figured out exactly how. What am I missing? Part of it is the assumption that because wealth has suddenly become concentrated at the top, people in the middle are completely absolved of any responsibility in their own plight. Also, rules/conditions change and you have to keep up. That said, I feel guilty for dismissing her point of view ... like I'm being too hard on middle class folks who are struggling.

Maybe it's just that I always dislike portraying everyone who isn't wealthy as a victim of the system.

Allowing that the link was just a plug for her book and so light on content, the general problem I see with such assertions concerning the state of the middle class is that the comparison is often between an anecdotal past and anecdotal present. Maybe in her book she lays out a rigorous data-driven definition and examination of the the middle class 50 years ago, and compares it to an equally rigorous examination of the same cohort today. In the video she seems to imply the demise of the middle class started with the appearance of "The Apprentice" on TV, which doesn't give me much confidence of a lot of rigor under the hood.

It seems like the conversation in the popular realm is more about the feelings of people with income in a range more-or-less centered on the quintile bracketing the median who think they deserve more, or at least wish they had more, than they have.