Americans today are 60% richer than their parents(pewtrusts.org)
pewtrusts.org
Americans today are 60% richer than their parents
http://www.pewtrusts.org/our_work_report_detail.aspx?id=58965
2 comments
If you want to quibble over the definition of "rich", be my guest.
To maintain a middle class lifestyle, one must today make a proportionally far larger expenditure for housing, education and transportation.
Only if you take a definition of middle class which has inflated faster than economic growth. I.e., if you are 60% richer (in terms of income) than your parents, but you define "middle class" to be 80% richer, indeed it is more difficult to be middle class. This does not change the fact that most people have higher income than their parents.
Also, you are misrepresenting Warren's data (admittedly, she presents it in a very confusing way). The primary necessity which reduces discretionary income is taxes, not housing, child care or automotive expenses.
In Warren's hypothetical, income increased 75%, mortgage expenses by 70% (for a 66% bigger house [1]), two cars in 2010 cost 55% more than 1 car in 1970, and health insurance increased 60%. The biggest increase in expenses was tax, which increased 140%. In dollar terms, the tax increase was larger than the cost increases in housing, automotive and health insurance expenses combined.
http://www.volokh.com/posts/1185883980.shtml
http://volokh.com/archives/archive_2008_04_27-2008_05_03.sht...
By the way, did you notice that Warren claims household wealth increased? I.e., the family has 66% more house and 100% more cars? (Not to mention better health care, an XBox, etc.)
[1] http://www.realtor.org/RMODaily.nsf/pages/News2007032701?Ope...
To maintain a middle class lifestyle, one must today make a proportionally far larger expenditure for housing, education and transportation.
Only if you take a definition of middle class which has inflated faster than economic growth. I.e., if you are 60% richer (in terms of income) than your parents, but you define "middle class" to be 80% richer, indeed it is more difficult to be middle class. This does not change the fact that most people have higher income than their parents.
Also, you are misrepresenting Warren's data (admittedly, she presents it in a very confusing way). The primary necessity which reduces discretionary income is taxes, not housing, child care or automotive expenses.
In Warren's hypothetical, income increased 75%, mortgage expenses by 70% (for a 66% bigger house [1]), two cars in 2010 cost 55% more than 1 car in 1970, and health insurance increased 60%. The biggest increase in expenses was tax, which increased 140%. In dollar terms, the tax increase was larger than the cost increases in housing, automotive and health insurance expenses combined.
http://www.volokh.com/posts/1185883980.shtml
http://volokh.com/archives/archive_2008_04_27-2008_05_03.sht...
By the way, did you notice that Warren claims household wealth increased? I.e., the family has 66% more house and 100% more cars? (Not to mention better health care, an XBox, etc.)
[1] http://www.realtor.org/RMODaily.nsf/pages/News2007032701?Ope...
I'm very interested in some good data on the points you discussed. I'm googling Elizabeth Warren but I'm not seeing the research on which she bases her conclusions. Any help here?
I admit that I have more than a little skepticism about the collapse of the middle class in America ... but nothing that some good data can't cure!
I admit that I have more than a little skepticism about the collapse of the middle class in America ... but nothing that some good data can't cure!
I'm not sure where the headline came from, but the income figures in the report are adjusted for family size (and inflation). Since families are getting smaller, this causes an increase in their income measure. The actual median increase was 65% (page 8, line 2).
I took the headline from table 1, and only gave 1 significant figure.
I went with this headline because I found the comparison of people to their parents far more interesting than the results on marriage, and figured others would as well.
I went with this headline because I found the comparison of people to their parents far more interesting than the results on marriage, and figured others would as well.
The study looks at income, not wealth ("riches").
To maintain a middle class lifestyle, one must today make a proportionally far larger expenditure for housing, education and transportation.
In constant dollars, cost per square foot of housing has increased dramatically (even with the recent declines).
It is now necessary to pay for daycare (due to two-income households) and for college (high school used to be sufficient).
Most households now have two cars rather than one (due to two-income households).
Further, because two income households make commitments based on two incomes, they are not prepared for the loss of income from either spouse, whereas formerly, there was reserve income potential in the stay-at-home child rearing spouse.
The above is mostly summarised from a presentation by Elizabeth Warren here: http://www.youtube.com/watch?v=akVL7QY0S8A