Sunday, May 08, 2011

American middle class in decline

Saw this article and video recently on Yahoo Finance.

Here are some figures copied from that article.

-- Middle-income jobs are disappearing from the economy. The share of middle-income jobs in the United States has fallen from 52% in 1980 to 42% in 2010.

-- Middle-income jobs have been replaced by low-income jobs, which now make up 41% of total employment.

-- 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor's degree.

-- Over the past year, nominal wages grew only 1.7% while all consumer prices, including food and energy, increased by 2.7%.

-- Wages and salaries have fallen from 60% of personal income in 1980 to 51% in 2010. Government transfers have risen from 11.7% of personal income in 1980 to 18.4% in 2010, a post-war high.

My comments for adapting to the new reality.

There are a lot of factors leading to this. One thing is the evening out of living standards around the world. USA is no longer the undisputed top as much as in the past. Some say the world is a bit fairer now. The quote, "be careful what you ask for as you might get it," applies. I remember complains about the US using something like over 40% of world resources for only 6% of world population in the past. Yes, be careful what you ask for. Maybe the trend toward international fairness is good.

Also there is pressure to reduce consumption due to environmental concerns.

Complicating the issue further is the growing gap between the wealthy and the rest of US population. This makes it harder to embrace some of these changes as possible good things.

I think we will need to learn to live, and even thrive, in a world of lower consumption. Lower carbon footprint and whatever.

Technology can create new and greener wealth, if we let it, so the sacrifice may not be as pronounced as some fear. At the same time, technology may not come to the rescue as fast as we need it. I do think technology holds a lot of promise; however.

We need to learn how to thrive and even live better in a lower footprint world. A more just society with fairer distribution of wealth is one thing, but also changing our own personal lives for, what can be defined as the better.

Bicycling is one example. Lower footprint also can mean better health. Shorter workweek with more time for hobbies, family and so forth can be seen as another positive change if society can be structured so people can afford to live that way.

A lot of these things can be seen as trade offs. Some of these changes can be seen as progress. We'll have to learn how to structure society so it can work.

There can be social progress as well as just the technological progress we are seeing.

In the future, we may have a somewhat slower, lower consumption, but also more high tech world. The shrinking footprint of electronic products is an example. I am amazed by the tiny chip of flash memory, I just bought with 16 gig!

Even if one just lives in a room, where heating bills can be low because there isn't much space to heat, there's plenty of room for a music collection. In the olden days, space was taken with shelves of vinyl records.

For years, since college, I have lived a low footprint lifestyle. This is more common, here in Bellingham, where some vestiges of old hippydom remain. Also, Bellingham may be ahead of the curve in having a glut of highly educated folks for the local workforce. Folks with advanced degrees often work in "low end" jobs. This has been the case for years, here in Bellingham and also in some other parts of the country; especially in college towns. The rest of USA may be headed our way.

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