Are Americans really making more money?

[Rubia Warren]

It has been said that we have a very rich country- we make a lot of money! But who in our country is making that money? It obviously is not the little guys making the most (duh), but is everyone in general in the US making more money nowadays since we now have more global trade and a service economy, or are the corporations and big business the ones who are significantly making more money, making the US appear to be more rich all the way around?
I'm not really putting forth an idea, but it is a question that I have.

[Ryokan]

It has been said that we have a very rich country- we make a lot of money! But who in our country is making that money? It obviously is not the little guys making the most (duh), but is everyone in general in the US making more money nowadays since we now have more global trade and a service economy, or are the corporations and big business the ones who are significantly making more money, making the US appear to be more rich all the way around?
I'm not really putting forth an idea, but it is a question that I have.
Well, its like this, Rubia. The people around the poverty line have gotten much richer over the past ten years. The middle class has some, and the rich even more so. So the very poor haven't seen to much enrichment, the lower middle class just average, the upper middle class more so, and the rich even more still. There are a couple possible reasons for this. One is, some of the enrichment has been in housing price increase, which help homeowners, who aren't the very poor. Secondly, immigration, while helping keep inflation down, also causes wage decreases for the poor and lower middle class. Another reason is tax cuts have helped the wealthy, because the poor, for the most part, pay little or no taxes. Productivity is up right now too, but that is mostly associated with middle and upper class office workers who can use technology, while the poor don't really use tech. And we are switching over to a system where college education is a necessity for middle class existence, but we don't pay for the poor or lower middle class to go, so they are sorta left in the cold.

[Sacrificial Ram]

Well, its like this, Rubia. The people around the poverty line have gotten much richer over the past ten years. The middle class has some, and the rich even more so. So the very poor haven't seen to much enrichment, the lower middle class just average, the upper middle class more so, and the rich even more still. There are a couple possible reasons for this. One is, some of the enrichment has been in housing price increase, which help homeowners, who aren't the very poor. Secondly, immigration, while helping keep inflation down, also causes wage decreases for the poor and lower middle class. Another reason is tax cuts have helped the wealthy, because the poor, for the most part, pay little or no taxes. Productivity is up right now too, but that is mostly associated with middle and upper class office workers who can use technology, while the poor don't really use tech. And we are switching over to a system where college education is a necessity for middle class existence, but we don't pay for the poor or lower middle class to go, so they are sorta left in the cold.
In other words, the gap between the haves and have nots have increased. This process has accelerated in the last few years.

[Captain Ochre]

In other words, the gap between the haves and have nots have increased. This process has accelerated in the last few years.

Right, except it's a misnomer to call the American poor "have-nots". The American poor simply have less than the other "haves".

[Pilgrim]

It has been said that we have a very rich country- we make a lot of money! But who in our country is making that money? It obviously is not the little guys making the most (duh), but is everyone in general in the US making more money nowadays since we now have more global trade and a service economy, or are the corporations and big business the ones who are significantly making more money, making the US appear to be more rich all the way around?
I'm not really putting forth an idea, but it is a question that I have.
In general, it is a fact that starting with the Xer's we are the first generation of Americans that will not do better than our parents. Now, does that mean we are making less or that we just won't make more? I'm not sure though I know that most of my friends are not making more than their parents and in fact are struggling to get by. Although most of my friends expect to have more by a younger age than did our parents.

[Pilgrim]

Right, except it's a misnomer to call the American poor "have-nots". The American poor simply have less than the other "haves".
Or as President Bush said, the have and the have mores, his base.

Seriously though, I don't know if I can agree with you simply because of what I have seen with my own eyes here.

Their is increasing homelessness and here in Detroit the poor can truely be said to "have not"

[Captain Ochre]

Or as President Bush said, the have and the have mores, his base.

Seriously though, I don't know if I can agree with you simply because of what I have seen with my own eyes here.

Their is increasing homelessness and here in Detroit the poor can truely be said to "have not"

I sure that there are some poor who literally "have not" but in the US they have the opportunity to have. They are not, by and large, trapped in their condition. If somebody wants work, they can find work (check the classifieds. I guarantee that there are some jobs available). Shelter is usually available for homeless persons--most especially those homeless persons who are active in seeking to alleviate that condition in constructive ways.
The "poor" in the US, generally speaking, have food, shelter, television, and a music collection. Oh, and cigarrettes. :smile:

[Pilgrim]

Yeah I see a lot of what you are saying and have known some folks for whom this was really true. There are a lot of lazy people out in the world. But I don't think it's as clear cut as that sometimes. Yes, anyone can get a job and I see a lot of people who do work at whatever job they can scrounge out of simple pride. But minimum wage will not support an average family. Heck, minimum wage jobs won't even pay the rent in most places. And minimum wage is all you can get if you don't have advanced education or special training. And minimum wage pays less than unemployment.

When I lived in Boston and walked in the city and pan handlers would ask for help I use to hand them them the want ads or tell them I just saw a help wanted sign in whatever store I had just seen. But expereince working in the soup kitchens and shelters of both Boston and Detroit has shown me that it's not always so clear cut. Yes, anyone can work, but even working they may not be able to pay their own way.

I still don't hand out cash to pan handlers but I'm more likely to offer a warm meal now than the classifieds.

[Ryokan]

Yeah I see a lot of what you are saying and have known some folks for whom this was really true. There are a lot of lazy people out in the world. But I don't think it's as clear cut as that sometimes. Yes, anyone can get a job and I see a lot of people who do work at whatever job they can scrounge out of simple pride. But minimum wage will not support an average family. Heck, minimum wage jobs won't even pay the rent in most places. And minimum wage is all you can get if you don't have advanced education or special training. And minimum wage pays less than unemployment. In Cincinnati, at least, you can make at least $8.00, with a high school diploma. That's $1,200. That's enough for 1 person. Its the children issue that makes things screwy.


When I lived in Boston and walked in the city and pan handlers would ask for help I use to hand them them the want ads or tell them I just saw a help wanted sign in whatever store I had just seen. But expereince working in the soup kitchens and shelters of both Boston and Detroit has shown me that it's not always so clear cut. Yes, anyone can work, but even working they may not be able to pay their own way.

I still don't hand out cash to pan handlers but I'm more likely to offer a warm meal now than the classifieds. In my experience, pan handlers have issues that keep them from working, or they would. No body chooses to be homeless.

[Ryokan]

In general, it is a fact that starting with the Xer's we are the first generation of Americans that will not do better than our parents. Now, does that mean we are making less or that we just won't make more? I'm not sure though I know that most of my friends are not making more than their parents and in fact are struggling to get by. Although most of my friends expect to have more by a younger age than did our parents.
I think Gen Xers will have less money compared to richer Americans, but more than there parents. Everyone had less money in the 60's and 70's, its just the middle class has some more money and the rich a whole lot more.

[Captain Ochre]

Yeah I see a lot of what you are saying and have known some folks for whom this was really true. There are a lot of lazy people out in the world. But I don't think it's as clear cut as that sometimes.

I'm not aware that I'm trying to achieve a clear-cut distinction.
:smile:


Yes, anyone can get a job and I see a lot of people who do work at whatever job they can scrounge out of simple pride. But minimum wage will not support an average family. Heck, minimum wage jobs won't even pay the rent in most places.

Minimum wage would probably support an average family, were it not for the fact that the average poor family trashes rental property so severely. I can use myself as an example, here. I've paid ridiculously low rent compared to the going rate simply because I take extremely good care of rental property. Minimum wage isn't a cap for the industrious worker, either.


And minimum wage is all you can get if you don't have advanced education or special training.

What type of special training does one need in order to (for example) wait tables?


And minimum wage pays less than unemployment.

That is a bona fide tragedy.


When I lived in Boston and walked in the city and pan handlers would ask for help I use to hand them them the want ads or tell them I just saw a help wanted sign in whatever store I had just seen. But expereince working in the soup kitchens and shelters of both Boston and Detroit has shown me that it's not always so clear cut. Yes, anyone can work, but even working they may not be able to pay their own way.

Some folks will have more trouble than others. Where an issue is identified, it needs to be dealt with. Hard to accumulate money suffient to acquire a dwelling? Many shelters will assist by allowing folks to build up some funds before setting them on their own two feet.


I still don't hand out cash to pan handlers but I'm more likely to offer a warm meal now than the classifieds.

Use the classifieds as a placemat while they're eating the warm meal.
:smile:

[Ryokan]

I'm not aware that I'm trying to achieve a clear-cut distinction.
:smile:



Minimum wage would probably support an average family, were it not for the fact that the average poor family trashes rental property so severely. I can use myself as an example, here. I've paid ridiculously low rent compared to the going rate simply because I take extremely good care of rental property. Minimum wage isn't a cap for the industrious worker, either. That is very biased, and I have no idea how they could survive without government assistance. At 5.50 an hour, if both parents work 50 hours a week, assuming they make time and a half over 40 hours, they get $605 a week. In Cincinnati, a two bedroom apartment runs from $350, if you want to live in a crime infested heck hole, to $700. Lets say they go for a nice, crime surrounded place at $500 a month, plus $50 in utilities. Now they have $1870. Drop another $100 on health insurance. $1820. Transportation, $300 for a car (Cincinnati has virtually no public transportation, and the said people probably have bad or no credit). Then toss in $150 more for gas, and $150 more for insurance. And that's if they only work with one car, even though there are two jobs. $1,270. $400 more for cheap, crummy, miserable child care, per child. Lets say you have just the one kid though, so now you are at $870 a month for all your other expenses, including diapers, food, doctor's deductibles, any previous loan payments, taxes and social security, etc. It's unrealitistic, especially if you have more than 1 kid, because then you have $400 or more in childcare in addition. And this is in Cincinnati, where the cost of living is low.



What type of special training does one need in order to (for example) wait tables?



That is a bona fide tragedy.



Some folks will have more trouble than others. Where an issue is identified, it needs to be dealt with. Hard to accumulate money suffient to acquire a dwelling? Many shelters will assist by allowing folks to build up some funds before setting them on their own two feet.



Use the classifieds as a placemat while they're eating the warm meal.
:smile:[/QUOTE]

[NSMinistries]

If we are making more money I ain't seen it yet.

[Ryokan]

If we are making more money I ain't seen it yet.
Do you have a: Computer? Color TV? More than one TV? A TV larger than 32 inches? Cable? The internet? A DVD player? CD player? More than 1 car? Cars with modern safety features and gas efficiency? A cell phone? More than one? Your very own web page? Did your parents have any of that stuff? Technology growth makes changes in wealth very tricky to measure, especially since certain basic items, like cars, houses, and gasoline are more expensive than the past.

[NSMinistries]

Do you have a: Computer? Color TV? More than one TV? A TV larger than 32 inches? Cable? The internet? A DVD player? CD player? More than 1 car? Cars with modern safety features and gas efficiency? A cell phone? More than one? Your very own web page? Did your parents have any of that stuff? Technology growth makes changes in wealth very tricky to measure, especially since certain basic items, like cars, houses, and gasoline are more expensive than the past.Yes to most of it and I had made less money each year for the past three years. Coupons, thrift stores, and repairs to things people have thrown away account for most that we own.

and if the ministry didn't support itself I wouldn't have the websites.

[Sheepdog]

i have actually seen a statistic that showed that even after accounting for inflation, the workers lowest 20% income do make more than the lowest 20% decades ago, and there is an observable upward trend, though it is very gradual.

this is also true for those in the 20-40% range, 40-60% range and so on. the growing "problem" of inequity is due to people in the higher income ranges increasing in income at a higher rate than everyone else. personally, so long as we are supporting the poor, especially those who have difficulties supporting themselves, i couldn't care less how much Bill Gates makes.

[NSMinistries]

Lets just take the salaries of all sports players. movie stars and singers and pay off everything... I'd bet we would be back in debt 20 mins. later to someone. Its just the way money works.

[Ryokan]

Yes to most of it and I had made less money each year for the past three years. Coupons, thrift stores, and repairs to things people have thrown away account for most that we own.

and if the ministry didn't support itself I wouldn't have the websites.
That's miserable. I am sorry to here that. I was speaking in general terms.

[NSMinistries]

That's miserable. I am sorry to here that. I was speaking in general terms.We are doing okay. After all we learned to control our credit enough to finaly get a loan for a house. It may not be much but it'll be home.

[Hitch]

There has never been a time of greater oppertunity, especially wrt higher education and economic advancement, across the board.

[Rubia Warren]

Thanks for your responses, everyone. :rubia:
It's funny that Pilgrim mentioned it about whether or not we are better off than our parents, as my stepdad was talking about it to me the other day, claiming that we are not better off than our parents. I still couldn't grasp what he was talking about, because it does seem like we are better off in the sense that we can afford more amenities like internet, phones, TV's, and stuff like that- technology has grown and these things are much cheaper for us nowadays.
But he brought up the costs of rent and homeownership and things like that... I just found this article on Harvard's website. It was pretty interesting, I thought I'd toss it out for discussion to see what the varying viewpoints will be. I am not sure about the copyright thingy, so I will just post snippets with the link and if I did it wrong, then maybe someone would edit it or moderate me or something. :blush: :innocent:
http://www.law.harvard.edu/faculty/ewarren/media/money.pdf


September 11, 2003: 5:08 PM EDT By Jeanne Sahadi, CNN/Money Senior Writer NEW YORK (CNN/Money)  If you feel like it's harder to provide the kind of middle class upbringing for your kids that your parents gave you, you may be right. According to Elizabeth Warren and Amelia Warren Tyagi, coauthors of "The Two-Income Trap: Why Middle Class Mothers and Fathers Are Going Broke," the average two-income middle class family today earns 75 percent more than the typical single-income family did 30 years ago. But today's family, they say, ends up with less money for everyday living expenses and savings. Why? The costs of housing and a good education are killing them. In other words, the authors argue, it now takes two incomes to provide what one income provided 30 years ago: a middle class home in a safe neighborhood with a decent public school. And that doesn't even factor in the cost of a private school or, for that matter, college, which the authors argue is now viewed as a must-do for today's parents in a way that it wasn't 30 years ago. So, too, is paying for kids to go to a good pre-school. With faith in the public school system declining, Warren and Tyagi contend, bidding wars erupted for homes in what are thought to be good school districts, making homes in those areas ever more expensive. The authors also suggest that the rise in two-income families contributed to the rise in home prices, since two-income families could outbid families with only one breadwinner. As a result, now you often need two incomes to be able to buy a home in a middle class neighborhood. And here's the kicker: The two-income family appears to be in a more precarious position financially than yesteryear's one-income family. Warren and Tyagi calculate today's two-earner family is two-and-a-half times more likely to face a job loss than
their counterpart of the early 1970s. Should one partner's paycheck be lost or reduced, their back is against the wall. Families can choose to reduce what they spend on food, clothing, savings, vacations or extracurriculars, "but you can't cut back a little on the mortgage or health insurance or tuition," said Warren, a Harvard law professor and bankruptcy specialist. The wealthy are costing you Here's another reason the cost of leaving it to Beaver may have become more prohibitive: The consumer behavior of the wealthy has upped the ante for everybody else. Cornell Professor of Economics Robert H. Frank calls the phenomenon the "expenditure cascade." As he wrote, "When top earners build larger mansions ... they shift the frame of reference that defines an acceptable house for those just slightly below them on the income scale. And when those people respond by building bigger houses, they in turn shift the frame of reference for those just below them, and so on, all the way down." The median size of a newly built home in 1970 was 1,500 square feet, Frank notes. By 2000, it had increased to 2,300 square feet, even though the median family's income hasn't changed much. But aren't we better off in other ways? While it may be true that a great number of middle class families are more strained financially than their parents, some would argue there are a lot of ways our lives have improved relative to a generation ago. Safety standards are higher, health care has advanced, women now enjoy far greater career opportunities than at any time in history, and it's no longer considered unusual --or prohibitively expensive -- to visit places across the globe. And there are some things that actually cost less than they did in your parents' day. Clothes, for instance. You now have a greater number of choices at lower costs thanks to discounters such as Targets or Marshall's, Warren and Tyagi note. But, according to the authors, that may be little comfort to the family who worries that paying for their daughter's Girl Scout outfit might compromise their ability to make the mortgage next month. Jeanne Sahadi writes about personal finance for CNN/Money. She also appears regularly on CNNfn's "Your Money," which airs weeknights at 5 p.m. ET. For comments on this column or suggestions for future ones, please e-mail her at
everydaymoney@cnnmoney.com.

[Sheepdog]

seems to be a fair assessment. tuition and healthcare costs are rising considerably faster than inflation. i'm familiar with the former as during my years at MSU i was shafted from the State of MI's tuition tax credit because they couldn't keep tuition increases below the rate of inflation. (yeah, the bean counters for the MI gov are kind of annoying like that.)

at the rate things are going, i hate to see how expensive stuff will be in 20-30 years.

[Ryokan]

Thanks for your responses, everyone. :rubia:
It's funny that Pilgrim mentioned it about whether or not we are better off than our parents, as my stepdad was talking about it to me the other day, claiming that we are not better off than our parents. I still couldn't grasp what he was talking about, because it does seem like we are better off in the sense that we can afford more amenities like internet, phones, TV's, and stuff like that- technology has grown and these things are much cheaper for us nowadays.
But he brought up the costs of rent and homeownership and things like that... I just found this article on Harvard's website. It was pretty interesting, I thought I'd toss it out for discussion to see what the varying viewpoints will be. I am not sure about the copyright thingy, so I will just post snippets with the link and if I did it wrong, then maybe someone would edit it or moderate me or something. :blush: :innocent:
http://www.law.harvard.edu/faculty/ewarren/media/money.pdf Home ownership is more expensive, as people want more out of a home. Same with education. So, for some people it is harder. Other's, as the article pointed out, not so much. And we have all this technology and healthcare not previously available. Its different, I think.

[Epoetker]

It's simply now more than ever before time to think about buying your own rental property. Or starting your own business. Or at least acquiring some mutual funds. As long as the rich are making all the money owning these things, why not put yourself into that category?

(My dad gets real mad at me for buying Rich Dad, Poor Dad, talks about how 'money isn't everything, then yells at me a bit about some homeowner down our street who keeps his eyesore home out there unoccupied as a tax break. Two weeks ago he bought the house and now I'm helping him clean it out to turn it into a rental property. It's amazing what letting some people yell about will do for their thinking. Though taking risky steps like taking on debt to buy a home to rent out for profit requires an order of magnitude greater mental shift than getting off of welfare and getting a job. I have a feeling my dad did it just to keep me from ribbing him about it.)

Anyone in the world can get a job in America. And with illegal immigration, increasingly anyone is. Employers have taken note. If you want to not only survive but thrive here, you're just going to have to do the sort of risky capitalistic things that people in this country have been doing from time immemorial. They're still not popular in the rest of the world, so succeed here and you can easily succeed elsewhere.
And if I may volunteer, videogames are still the least expensive entertainment habit to have, so long as you stay the heck away from MMORPGs and stick to consoles.