Has the American Dream Become a Nightmare?
This resultant squeeze on the middle-class, and not profligate, irresponsible spending, has led to unprecedented debt levels. In other words, families are going into debt just to pay for their daily lives. (See February Consumer Credit 5.9% Greater than Last Year)
The author, Bob Herbert, goes on to chide the current President as well as the three leading Presidential candidates, stating that "No one will tackle the crucial issue of employment in a serious way." (Source: Der Spiegel, Sharing the Economic Pain, March 13, 2008)
What struck me was the fact that one-third of the U.S. population is either below or dangerously near the poverty line. Specifically:
The US has a population of 300 million. Thirty-seven million, many of them children, live in poverty. Close to 60 million are just one notch above the official poverty line. These near-poor Americans live in households with annual incomes that range from $20,000 to $40,000 for a family of four.This is more than just the "usual suspects" - illegal immigrants, inner city poor, and welfare cheaters. This is every third person you meet today.
How did this happen?
In the last year alone, real wages decreased .8%. That's because, although wages increased 3.7%, prices increased even more. U.S. wage levels must stay low to keep with wages in foreign countries such as China and India, which have a much lower cost of living. At the same time, the education and skill level of their labor force is increasing. Furthermore, technology and the global spread of English is making it easier to employ foreign workers for many new types of jobs, such as call centers and computer programming. To remain competitive on the global market, U.S. companies must employ these lower cost, skilled employees or lose market share.
At the same time, prices of food and oil are increasing, thanks to a declining dollar and the Clean Energy Act, which encourages production of ethanol. Unfortunately, this has also increased the price of corn, a primary feedstock for beef, leading to higher food prices.
For more on this issue, see Why You are Working Harder, But Feel Like You Are Earning Less.
Comments
I agree that the poverty line is moving it’s way up the income ladder, and that more people are using debt to finance their lives. But what are we financing? Is it necessities, or is it mostly frivolous stuff like expensive cars, clothing, vacations, etc?
Food inflation has been at its highest in 17 years therefore, the average American family is merely trying to feed themselves. Also with all of the airline mechanical problems and delays, you’ll never get to your destination!