Please note: All numbers are adjusted for 2016 dollars.
According to the Land’s End catalogue, a “medium guy” is someone who looks like me. I’m 5’10, 168 pounds, 32” waist, 32” inseam, 40 regular suit size, size 10 shoe. I am your average Joe. Actually, I am more than that. I am also average on the financial side of things. For the past forty or more years, with a few exceptions, my personal and household earnings fall within the average category. I mention all of this because I don’t want you to think that the following tale is about “me”. It’s about us and I am just a typical average example.
In 1973, a young man could graduate from high school with a C+ average and have his pick of three good paying full time entry level jobs. I know this because that kid was me. I decided to take the job at Xerox where I made $45,000 that year. I worked as a “J-17” which meant I supplied parts to the workers on the assembly line. The work was not hard but it was good honest work. In addition to the $45,000, I had two weeks of vacation, sick & personal days, and health insurance.
I lived at home that year, made enough money to buy a new car and save for college. In 1974, I left Xerox and went to a local community college that cost me $4,000 a semester, plus books. I worked part time at a local mall and was making $12,000 a year. As they say, life was good.
After two years at community college, I enrolled at a local private college where that cost me about $45,000 a year so I had to take out a small college loan that I paid off in less than five years after graduating. It was $204 a month for eight years and paid it off in five just to get rid of the annoyance of debt.
In 1981, I got my first real “full time job” after college and made $60,000 plus health care with no co-pays or deductibles. In September of 2015 I got laid off from my last full time job where I was making $62,000 a year plus health insurance with high deductibles and co-pays. Yeah, flat wages for 40 years is the reality of our economic model.
I tell this tale to kids today and they can’t believe it. By “kids”, I mean anyone under 40. These kids tell me that the way things are is the way they will be and we really can’t expect to change them. They tell me we need to work within the status quo and take what little changes we can get.
It saddens me to see how much they have given up.
As Bill Clinton said, “If you find a turtle on a fence post, you can rest assured that someone put it there.” Bill was right. There is a reason why a kid out of high school could make $45K with health insurance back in 1973 and not today. There is a reason why four years of college was affordable in 1973 and not today. Just like the turtle on the fence post, someone has put things this way. If you want to know who, I’d suggest following the money, or as they say in Latin, cui bono? Since 1973, a small group has prospered at phenomenal rate. They fund the super pacs, they run Wall Street, and for what I can tell, control most of one political party and a sizable portion of another. They set trade policy, labor policy, tax policy.
According to many economists, 1973 was the last year that the middle class (aka the labor class that can support itself) was growing. I can’t escape the irony that 1973 was the year I officially entered the labor class. The middle class has been shrinking ever since. It continues to shrink and yes that is a reality but I refuse to see it as destiny as sadly, so many have decided.
When I was in college, a roomate and I went to a Clinton event, up in the big ballroom at the Parker House, a few days before the NH primary, and he used the turtle on a fence-post line, and the crowd, including me, ATE IT UP.
In conclusion, that is a good line.
Conservatives will say globalization is the cause. It certainly played a part. However, tax cuts have been shifting wealth to people who don’t use it other to invest it to make more money.
It was said back in the day, but no one listened: tax cuts redistribute wealth upward. We’ve disinvested in our children’s higher education. Yeah, costs have risen, but community college is a great example.
I went to Holyoke Community College from 1982 to 1984. I found one of my bills from a semester there: $325 dollars. Minimum wage was $3.35 an hour.
My daughter started at HCC and it was $4000 a year and her minimum wage job paid $8.00 an hour. I don’t have time to refine the math, but it looks like the minimum wage was worth 2.5 times as much as compared to tuition as it is today.
Yup, same old chestnut. It’s “globalization” as the cause of anything that results in the hammering of the middle class. Funny thing is that is there is anything “globally” that will support the middle class, like the fact that all of the developed nations on this globe have a version of universal single payer, or that their tax codes don’t reward the .1% as much as ours, well, then “We’re Americans and we’re not going to have another nation’s ideal forced on us”….
“Globalization” is just the term to distract us from who is really behind that curtain.
There are a number of things that are affecting the middle class. We could handle one or two of them, but not all of them. They include:
* Globalization
* Technological improvements
* Increased immigration
* War on unions
* Mergers/acquisitions (i.e. big companies).
* Intense focus on metrics (i.e. only hire the above-average).
Yes, ultimately the common element is the super-wealthy, and the idea that this is what everyone should strive for – to become a billionaire. To do that, we have to embrace “super-capitalism”, which is a combination of several of these things.
Switzerland’s and Germany’s middle classes stayed roughly the same size. And two countries – Norway and Canada – saw their middle classes grow substantially. They all dealt with the things on your list.
I’m not arguing that the conclusion is foregone – we are just not handling it well. In fact, we’re not even trying.
Switzerland and Germany dealt with a couple of the things I listed, but, for example, Germany has very strong unions; Germany hasn’t faced the same immigration issues we have. The labor laws in Germany are different too.
From the trenches, the issue I see in this country – a fundamental one – is that employment opportunities for people without advanced skills or education are extremely limited. While it has been a liberal tenet over the past 30 years that everyone should just “go to college”, that ignores the simple fact that people come in all shapes, sizes, and situations, and that if a college degree is the new bar for minimal economic participation, we have to address the millions of people who are not going to achieve this. And we need to do it now – not in 20 years by addressing pre-K programs.
It would be interesting to find out how Switzerland, Germany handle the issue of someone who is hard to formally educate; someone who basically just made it out of high school, and isn’t good at a trade.
I suspect that a better reason for their success is that they have a far stronger safety net which supports people in poverty, and perhaps even makes work less necessary to survive.
mostly, we’ve made choices in this country that benefitted the accumulation of wealth by a tiny percentage of the population. Capital gains tax cuts nationally. Retained earnings loophole. Personal income tax cuts in the Commonwealth.
The 1980s and 1990s were a freakin’ disaster.
I worked for a company that, in 2007, had $25 Million in sales. There were three people in my department. When the recession hit, they laid off two and kept me. At that time, the owner of the business owned two homes, his primary residence and a vacation home in state. Fast forward to 2005 and sales hit $40 Million. I was still the only person in the department and the owner then had the same two homes, plus a condo in the city and a vacation home in Florida.
$45,000 in 1973 was an executive wage.
My father had like 100 people under him and made $30k
In 1978 I worked on a truck dock as a Teamster and at $10/hr I had the best paid job of all my friends.
Private school tuition in 1982 was $7000. My ex-wife (GF then) was at BC.
I’m not saying the problem isn’t real, but these numbers you use are wrong.
I used a random inflation calculator, and started with $45,000 2016 dollars. The calculator adjusted that to $8,433.37 1973 dollars — and that sounds about right to me.
The private school tuition you cite for 1982 corresponds to $17,185.62 today.
The thread-starter describes a “local private college” that he started in 1976 and that cost $45,000 (2016 dollars). I think that that costs in 1976 dollars was $10,807.63. On the expensive side, yes (I went to CMU in Pittsburgh from 1970-1974, and my parents said the cost was $6,000/year), but still in the ballpark.
I think the numbers are pretty much on track. I think the exercise of expressing those in 2016 for comparison with what we see today is a very effective way of making the point.
But I don’t think it’s effective.
I get it. Wages haven’t kept up with costs. There’s lots of reasons for that.