(Not) Keeping Up With Our Parents by Nan Mooney

(Not) Keeping Up With Our Parents

Posted by Lynnae on April 14, 2008

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Some of the assertions made in (Not) Keeping Up With Our Parents infuriated me.

When I enrolled in college, I declared Sociology as my major. Why, I’ll never know, because without a PhD., there’s not a lot you can do with sociology. Still, studying groups of people has always fascinated me.

So it was with great interest that I picked up the book (Not) Keeping Up With Our Parents: The Decline of the Professional Middle Class by Nan Mooney. I began reading it Saturday, and there are so many good discussion points so far, that I’d like to cover a chapter a week here on my blog. So here is the first in a multi-part series on this book.

Preface to (Not) Keeping Up With Our Parents

In the preface to her book, Mooney defines what she thinks “Middle Class” should look like. To her, a middle class couple should be able to support their family easily on a couple of middle class incomes. They should be able to buy a house and a couple of cars, and they should be able to afford to take the kids to Disneyland every once in a while.

Mooney asserts that wages for professionals have stayed pretty much the same for several years, while the cost of living has gone up quite a bit.

Chapter 1: The New Reality

According to Mooney, the new reality is that middle class professionals make the same amount of money, yet are asked to pay more for things like housing, health insurance, and other life necessities than ever before.

She gives an example of a professional couple with two children and a third on the way. They own their home, but don’t have much equity, because they maxed out their home equity to buy a condo for the wife’s private psychology practice.

They have student loan payments of $450 a month on a graduated plan. The loan payments are set to go up next year.

They had a 401k, but they cashed it out when they needed money for maternity leave.

Mooney goes on to lament the state of the professional middle class, hinting that perhaps government and big corporations are somewhat to blame, because they are requiring us to be more responsible for our own welfare, rather than relying on the government and our employers to take care of health care and retirement savings for us.

The one statement in the first chapter that completely stopped me in my tracks, though, was this:

Given the increased cost of just about everything, it’s no shock we’re sliding deeper into debt. Only 18 percent of middle-class families report having at least three months of their income in savings to ride out an economic downturn. Such bare-bones living means we have no choice but to borrow to bridge any unforeseen gaps, turning to credit cards to cover everything from home repairs to medical expenses to college tuition. p. 7

No choice. No choice but to use credit cards. Really? I think the author is wrong. There are always choices. They might not be pleasant choices, but who on this earth has been guaranteed a trial-free life?

I think the problem goes back to two things: entitlement, and the easy availability of credit.

Entitlement

To go back to the example couple from the book, they made several mistakes. They tapped into their home equity to buy an office that it doesn’t seem they could afford. They signed up for a graduated repayment plan for their student loan, when there was no guarantee their salaries would go up. Instead of cutting expenses, they cashed out their only other asset, the 401k, to cover expenses while the wife was on maternity leave.

Did they need to buy the condo for the private practice? Couldn’t they have found a small office to rent? Did they need to buy a home? Or could they have found a less expensive one? Maybe a second job would have been an option for a while to make ends meet? Childcare out of the home? There are a lot of possibilities.

Instead this couple compared themselves to their parent’s generation. They thought they needed a house, two cars, two careers, top notch childcare, and a condo for the private practice.

Lesson: Only compare your own situation to your own situation. The minute you start measuring your status and needs by other people’s situations is the minute you’re going to start down the horrid path to being in bondage to debt.

The Easy Availability of Credit

The second part of the problem is the credit industry. I’m not saying all credit is bad, but credit has become too widely available.

I agree with the author that the price of things has gone way up compared to salaries, and I agree that it’s a problem. I’m not sure I would place the blame on corporations and the government, though, or at least on corporations and government wanting us to be responsible for our own livelihood.

I place responsibility on the credit industry and consumers. Would the price of most houses in California be $400,000+ if there weren’t lenders willing to give 100% financing or interest only loans? Would housing prices be so high if people weren’t willing to mortgage their lives away to buy them?

It comes down to supply and demand, and if people are willing to take out bigger and bigger mortgages eating up bigger and bigger chunks of their take home pay; and if lenders are willing to lend the money, then certainly housing prices will go up.

If people as a whole weren’t so desperate to have it all now and were willing to wait until they saved money to buy a house, housing prices might come down. The same goes for lenders, and we’re seeing that today. If lenders aren’t so willing to give credit to just anybody, it narrows the pool of those who can afford to buy, and housing prices go down.

Lesson: Instant gratification doesn’t pay off in the long run.

I may not be an economist (I was good at sociology…not so great at economics), but I do know that too much debt is bad. And a society driven by large amounts of debt can’t be a good thing.

I would love to hear your opinions on this subject. Who is responsible for the shrinking middle class? Is it purely the government and big corporations? Should the government be responsible for our healthcare and retirement? Does credit play into this mess at all?

Stay tuned next Monday for more on (Not) Keeping Up With Our Parents.

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Comments

40 Responses to “(Not) Keeping Up With Our Parents”

traineeinvestor on April 14th, 2008 4:32 am

Enitlement mentality is everywhere. Believing that we are entitled to the same or better standard of living than our parents is just one example. An appropriate entitlement mentaility is believing that you are entitled to take responsibility for your own life and your own decisions.

Debt per se is can be either good or bad. When it is used to fund lifestyle choices rather than investments (including education) then it is bad.
Kathy on April 14th, 2008 4:45 am

I so agree with this. I would add that when our generation compares ourselves to our parents’ generation, we’re making a false comparison. This is because we’re not looking at our parents at our age (or the number of years we’ve been on our own), but we’re looking at the way our parents are living now (having been settled for 30 years). I’m 31 years old now; I was a baby when my mom was 31, so I obviously have zero memory of the way things were for them then. But I’ve heard their stories, and I know that my parents had *nothing* in their 30s. The lifestyle my husband and I have now is more similar to my mom’s lifestyle now (CDs, DVDs, computers, food, etc.) than it is to the way my parents used to live. They sacrificed. Quite a bit. I think of something that was in the book “The Tightwad Gazette” about living on one income — if we’re willing to live like past generations did, then we will be able to make it on one income. The problem is that we’re wanting to step out of our parents’ home (which has taken 20-30 years or so to accumulate all of the amenities) and step into our own home with the same lifestyle.

I never hear any more of people sacrificing and living on nothing as newlyweds. Whatever happened to the “starter home” of less than 1000 sq. ft. (or being in an apartment for a few years)? I used to hear about “early married” furniture, which was basically whatever you could cobble together. Nowadays, newlyweds expect to have a 1500-1800 sq. ft. house to start with, fully furnished with Ethan Allen furniture. But they complain about the bills that go with it. Simply ridiculous! Our parents didn’t start out like that, which is how they were able to eventually afford the larger house with nice furniture. We’re sacrificing our future to have baubles today.
plonkee on April 14th, 2008 5:40 am

In many ways, things are more difficult than they were in my parent’s day. When my they were in their mid-twenties they could afford to buy a small two bed starter house in a London suburb on one salary.

In order to do so, they were poor - much poorer than I am now. But today, that’s not possible - it wouldn’t leave me poor it would leave me with exactly nothing to live on.

It’s about choices, but some choices don’t exist in the same way that they used to. There are some better choices as well though.
MO Money on April 14th, 2008 7:21 am

Good post. I think the difference between the two generations is credit card debt. Credit cards were not readily available until the late 1950’s. That is when they were aggressively marketed. That has changed our way of life, our way of thinking and our way of living. And not necessarily for the better.
dana on April 14th, 2008 7:21 am

Sample family: 2 kids, 1 on the way. Why have more kids than you can afford?
Going Gazelle on April 14th, 2008 7:31 am

I think it would be interesting to do a compare and contrast of this book with Elizabeth Warren’s “The Two Income Trap” book about the middle class.

Her thesis that generally speaking all things have rather equalized out in terms of long term cost of goods except housing, health care and education. Housing is driven up by 2 incomes - more disposable income - easy credit and this desire to get your kids in “the best school district.” So two incomes drive up the price in choice districts to the point where only 2 income families can afford to live there.

Warren is a law professor at Harvard and very vocal consumer advocate. If you’ve watched Maxed Out Movie or In Debt We Trust - you’ll be familiar with her. Dave quotes her from time to time as well.
erin on April 14th, 2008 7:35 am

this is happening in canada as well..wages are not really going up by much but the price of everything is going up, and people just cant seem to keep up. I thought you made some really good points there, and that book sounds really good!
Shanti @ Antishay on April 14th, 2008 8:17 am

I don’t think that there’s any one thing responsible for the middle class we now have here in America. I think that more available credit caused a balloon, and some people never learned how to use money other than to borrow it because they were too busy being hippies to listen to their parents (at least, both of my parents have told me this is why they know nothing about money).

So perhaps it’s just a decline from the times when people viewed their parents as the wise elders and did as they told them to do? I know that moving away from that absolute hierarchy in the family isn’t completely bad (freedom from horrible parents, for example, or the ability to pick your own career), but when did it become okay to disrespect parents? I think that’s where it lies, because it seems there was some crucial information not passed down through the baby-boomer generation and it’s having huge effects on society today. I can only say I’m happy that I learned all this PF stuff myself, otherwise I’d still be relying on credit cards and leased cars to get by, like my mom did all of my childhood :/
Lynnae on April 14th, 2008 11:27 am

@Plonkee - you make a good point that some choices don’t exist the way they used to. We always have to take into account changes.

@Going Gazelle - I’ve never read The Two Income Trap, but the author of this book mentioned it in the first chapter.

@Shanti - I never thought of that. I do think that it’s not OK to disrespect parents. And I do think that some kids probably rebelled so much that they didn’t listen to their parents. And now we have a whole generation of parents who don’t even know what they should be teaching their children. That’s definitely a problem!
Kristen on April 14th, 2008 11:42 am

Hi Lynnae. I’m a first-time reader to your blog. It’s great!

I think the shrinking middle class is a combination of things. Many people do not know how to distinguish between wants and needs and could do with far less. I’m guilty of this, too.

On the other hand, salaries don’t always increase with inflation. For example, I’m a college educated professional, and at my previous job I went years with no raise. In the meantime, my health care contributions increased, as did the cost of gas, groceries, utilities, etc. Sometimes it’s hard to keep up.
Trent Hamm on April 14th, 2008 11:43 am

“I never hear any more of people sacrificing and living on nothing as newlyweds. Whatever happened to the “starter home” of less than 1000 sq. ft. (or being in an apartment for a few years)”

My wife and I spent the first four years of our marriage in an apartment of about 725 square feet. This enabled us to get rid of a lot of our debt and save up for a house.
Lynnae on April 14th, 2008 12:27 pm

@Kristen - It can definitely get hard to keep up. I think the prevalence of credit drives up prices and makes it hard for those of us who don’t want to use credit to keep up.

@Trent - Unfortunately I think that’s more the exception than the rule these days. Good for you for thinking about the long term, though.

We’re currently renting a 1000 sq. ft. duplex and squeezing our family of four into it for the time being. I don’t want to buy a house until we have a decent sized down payment. I’d rather deal with space issues than a stretched to the breaking point budget.
chris on April 14th, 2008 12:33 pm

I like this post - a lot! When I think of my parents’ generation, I am looking at people who were children of the depression and based on this they were a frugal bunch as they grew older and had children. Sure, they had a house and two cars BUT the house was small (just enough) and the cars were purchased, not leased and driven into the ground. The last car my mother replaced was over 20 years old and she replaced it with a good used car which she paid cash for. Who is responsible for squeezing the middle class? I think the majority of the middle class is by way of thinking that they are of higher status than they really are and by then trying to live up to a much high standard of living than is applicable to their “real” situation. Oh, the idea of a “starter home” is peculiar to me. Whatever happened to finding a nice home, paying it off and planning to live out your old days in it? Remember when you could save up for something you wanted in the stores? Now that is not possible, because with this new consumerism, what you want won’t be there in a month or two or three. It will be replaced by something different. The pace of the ever-changing goods is fast and there is so much “stuff” out there in all categories, and most people seem to try to keep up. Oh well, fear not…the government will rescue us all in another month with our “stimulus money!” (Yes, that is sarcasm.)
FFB on April 14th, 2008 1:07 pm

Lots of interesting things here. I think consumerism and easy credit are big contributors to the problem. Easy money drives up prices - too much money chasing too few goods. In the 80’s consumer spending started rising faster to the point we’re at now where we’re in a trade deficit. When it comes to housing the problem now is government bailouts. When the gov’t “helps” out they contribute to keeping the prices high.

Wanna hear my theory? It may be unpopular, but bear with me - women’s lib is part of the problem. Used to be one income could do it for a family. Then women started entering the work force. They didn’t get paid the same as men (maybe they still don’t). As more women were hired it drove down the competitive price for labor. Effectively the labor force doubled over time lowering salaries. On top of that you now have these same women gaining a better ability to be consumers thanks to their new salaries. That helps to raise consumer prices. So prices have gone up but salaries have not grown at the same rate.

Don’t take this as sexism. I believe women have every right to work if they want to. I’m just looking at this economically (with my limited economic knowledge). The added workforce has also helped the country grow economically but I think it has hurt salaries to the point that we need two incomes nowadays.

As to entitlement - There is certainly a lot of that feeling out there. It used to be that kids would do better than their parents. It felt like a given. Not so anymore. Some people don’t want to see the entire picture and think it’s ridiculous to not have every pay cable station. Not sure what we could do to stop it. I think sites such as yours are a good start but it’s a bit of preaching to the converted.
Kevin Mastaw on April 14th, 2008 1:33 pm

This is my first visit to this blog, also. I am of the opinion that the conventional wisdom about the current credit crisis being all the consumers’ fault is not completely accurate. The banks, mortgage brokers, real estate brokers, get-rich quick gurus, etc. have pretty much been working hard to all make us believe that “Leverage” is the way to become rich. Many bought into it but the lenders and salesmen created it.

Having said that, you may be interested in the blog http://www.thetruthaboutdebtrelief.blogspot.com .
It’s Doug Johnson’s blog in which he offers some VERY unique perspectives on getting out of all kinds of debt. I’d be interested in your opinions on those.

Best regards,
Kevin
Foxie on April 14th, 2008 4:34 pm

I completely agree with you, Lynnae. I’m very glad my parents never let me develop an “entitlement complex” like some of the people I know. That and I certainly won’t be buying more house than I ever need or can afford! Though I also plan on working my way up to at least comfortable middle class level, as I came from somewhere near the bottom of this class.
the debt defier on April 14th, 2008 5:03 pm

debt and easy access to credit is a killer. i know myself, i wasted a few good years in my early twenties paying off all my credit cards that i stupidly ran up in college. i think back now and kick myself because all that money i spent could’ve been put towards a house or in investments that would be making me more money now.

another huge factor is the cost of education. my grandparents, and parents generation to some extent, could get by without a college degree. nowadays, even a bachelor will barely get you in the door. as a result, more people are strapped with huge student loans that stand in the way of their ability to build savings.
Christine @ Serenity How? on April 14th, 2008 5:22 pm

Great post!

I have to keep reminding myself that I not only can’t have it all (at least not at the same time) I don’t need it all.

I’m hoping that turns into I don’t WANT it all, but we’ll see LOL!
CindyS on April 14th, 2008 5:47 pm

Great post and comments. I don’t think that you can blame the mortgage companies and credit card companies either. I personally think that it’s our whole culture that has changed. There is very little focus on saving up for anything. And for years you haven’t had to save. 100% mortgages were an every day occurrence even for sub prime which is why there is so much trouble in the housing industry.

And I am just as guilty as everyone else. I grew up thinking that life was going to hand me things just because I didn’t mind working for them (not saving for them). When I hit the wall last year, I had very little to fall back on. It’s been a HARD lesson.

Now I feel like someone who has quit smoking or alcohol. I want to shout it from the highest building. I want to shake my grown kids until they wake up. LOL. I guess I have been born again into the personal finance world.
MITBeta @ Don't Feed The Alligators on April 14th, 2008 8:22 pm

While I certainly agree that people need to take responsibility for themselves, corporations and the government certainly have some share in the blame for where we are now.

It used to be that you worked 30 years for a company and it took care of you for the rest of your life. Was that “entitlement”? Times aren’t like that anymore, but the money that used to go to pensions and health care now goes to CEOs who make millions upon millions, often no matter how poorly their companies do. So now we make the same money as our parents when adjusted for inflation, but we have to provide our own health care, life insurance, retirement savings, disability insurance, etc. — all things that the corporations used to provide as part of their compensation packages. I don’t mind that they don’t provide these things anymore, but by not providing the employees with the funds that used to go towards these items, we are all now effectively earning much less than our parents.

I’m not currently in a union, but the AFL-CIO website has some interesting information: http://www.aflcio.org/corporatewatch/paywatch/

Starter homes? What are those? Any house in my area that was built with 2 bedrooms now has 3 or more. Do you know of any builders today who will build a home with fewer than 3 bedrooms? Why? There’s not as much profit in it…

Need I remind anyone that the government cut taxes a few years ago for the wealthy? Does that not put the squeeze on the middle class? Besides, the government spends more than it makes, so why shouldn’t its citizens?

I’m not a conspiracy theorist, but getting frustrated and angry at other “middle class” families who don’t know any better than to make poor choices smacks of “divide and conquer” to me. How can we be outraged at CEO pay and deficit government spending on highly questionable items when the neighbors are idiots who made bad decisions and are now getting bailed out by the government?

I find too many people today directing their ire in the wrong direction. People seem to get upset and pennies, nickels, and dimes that find their way into all kinds of middle class people’s pockets, but the stacks of C-notes that find their way into government contractors pockets elicit only a shrug of the shoulders.
Lynnae on April 14th, 2008 9:27 pm

I definitely agree that the government and corporations bear some responsibility for the state we’re in. And I don’t think I’m frustrated with people getting into financial trouble (because I’ve certainly done it). I’m more frustrated with people getting into financial trouble and then blaming everyone but themselves, as if they bear no responsibility.

I’m also extremely frustrated with the author for, at least so far as I’ve read in the book, taking a “poor us middle class people” attitude and saying there’s no choice but turning to credit cards to make ends meet. There are always choices.

I don’t see health insurance and retirement savings as entitlement. Those are things you have to get, one way or another. But nobody is entitled to trips to Disneyland, two newer cars in the driveway, and a 2500 square foot house. Those things are nice, but they aren’t necessary living expenses. There are plenty of people who do without them and are content. It’s nice to strive to own a nice home and nice cars and take nice vacations, but when you take on those expenses and sacrifice your future well-being in the process, that’s a bad decision.
Trixie on April 15th, 2008 2:32 am

Great Post!

I cannot believe how much stuff a typical “middle class” household feels entitled to have!

Certainly the government and big corporations may have a small role in the squeezing of the middle class but far and away it is the consumers that want to consume so much that do the most squeezing.

Take Care,

Trixie
Liz on April 15th, 2008 6:57 pm

I definitely hope that the government will continue to pass programs to bolster the middle class. But I wonder how much of the problems are just shifting priorities?
I look at myself and I am 30, just married a year ago. I have never made more than $35,000 per year. I have been amazed at how easy it has been to achieve some of the “life dreams” I have always had. When I was a child I dreamed of seeing the Amazon and the pyramids. I have swum in the Amazon and last year made a decision not to go to the pyramids, but not a financial one. I had dreamed of living overseas, and I have. I dreamed of learning foreign languages, and I have.
I guess there are tradeoffs to this–our furniture doesn’t match (and is almost exclusively obtained from thrift shops, garage sales, moving sales, free stuff). I haven’t bought new clothes in a year. My husband and I share a car and he commutes by bike right now. But I don’t feel poor–and we right now are in the middle of the middle class, living on his income while I look for a job. We have enough to eat, reliably. We have shelter. Our basic needs are met, and so well that sometimes we even have almost gourmet meals. We are fairly warm in our house–we have central heating. Our car is reliable.
The author’s description of what a middle class family “should” have seems arbitrary to me. I guess I think of middle class as meaning that our basic and secondary needs are reliably met. If we should decide to pencil in a few weekend trips and a luxurious yearly vacation, plus buy a house and another car, we would feel the pinch. We don’t have cable or a large screen tv. If we eat out it is once a week, on the frugal plan. Our leisure activities must be cheap or free. Our apartment is small, and is the largest living space that we have inhabited. But we can save our meager amount each month, and even give a meager amount to charity.
I can’t imagine that for my parents’ generation, achieving the travel dreams that I have been able to have would have been so simple. I know for a fact that most of my parents’ furniture came from my dad’s parents. We never went on a foreign vacation growing up–we drove to a beach 6 hours away every year until private high school tuition ended that.
I see a squeeze on the middle class these days. I know that our baseline costs have gone up–lodging, food and fuel. And we aren’t making more money. Yet. I hope we will as we start having more experience. But I don’t feel like we are suffering. Postponing the trip to Disneyworld isn’t such a privation…
KathyLikesPink on April 16th, 2008 3:56 am

The minute you start measuring your status and needs by other people’s situations is the minute you’re going to start down the horrid path to being in bondage to debt.

VERY well said!
Heather on April 16th, 2008 6:13 am

I am a first time reader…. really enjoyed this post and the interesting comments! This is a topic I could go on and on and on about!
“having it all” doesn’t equal true living!!! If the house, cars, and vacations (not to mention the designer clothing, shoes and private schools) could make a family strong then I don’t think we would have all of the divorces and family break-ups!
Life is about choices and being content! We are a single income family with four children. We make choices. We say “no”! We are HAPPY, we are CONTENT!!!!
Rob Madrid on April 16th, 2008 8:32 am

Mittbeta (interesting name) nails it totally. when ever this subject comes up the blame is laid on the poor sap who was foolish enough to think he could live a middle class lifestyle. Even Lynn makes the classic mistake of blaming the victim. The issue isn’t debt, or frugal living but income insecurity and by extension job insecurity.

I’m just old enough to remember when a full time job usually meant a decent wage with benefits and generally a job till 65 and then a Defined Benefit pension. Unskilled jobs while very boring usually paid a living wage. And again with benefits such as health care and often a good pension.

Compare my Wife’s old company (Manulife Financial in Waterloo Ontario Canada) She started working there vis a temp agency and they liked her enough offer her a full time job after a few months of employment with benefits and a pension plan.

Fast forward 20 years and my niece works there. Full time employment, hell no, contract with no benefits, holidays or holiday pay (4% added to each pay)and more importantly no job security. My wife was hired on full time after a few months, Meli has been there going on 2 years with little hope of being hired.

Now if her story were featured in blogosphere the reaction would be fast and furious blaming her for getting into debt and making mistakes. forget the fact she can’t get a good full time job.

Heather I haven’t had time to view your blog but I doubt your husband has a minimum wage no benefits job. I’d also like to know how people working at Walmart are supposed to afford a middle class lifestyle when they can’t even get a job with health care much less a pension.

BTW I haven’t read the book but it sounds like the author made the same mistake.
Rob Madrid on April 17th, 2008 2:05 am

Just a note, but I do agree that frugality is a lost art.
Zandriana on April 21st, 2008 4:46 am

This was a really interesting article, it’s the first time I’ve read your post, your book review really got me thinking.

I came from a family with little money, however, my parents did everything they could to make sure that we never went without, our needs were met and our wants satisfied. From a young age I learned the joy of delayed gratification and the art of appreciation. We were not cash rich but we had an abundance of wealth in my home.

However, I sometimes wonder how those early experiences shaped my relationship with credit cards. When I began working and discovered credit cards I was really sensible at first only spending what I could pay off and then one day it all changed and the instant gratification demon went to work. I remember often saying to myself “I work hard and I’m worth it”.Consequently I rarely saved for a thing and I gorged on the delights of instant gratification. I paid dearly for those lessons, however, they are lessons that made me who I am today. A successful middle class woman with a vastly improved outlook on money, life, and a whole lot of other things. Perhaps if I had copied the lessons of my parents things might have been different.
Zenobia on April 25th, 2008 12:03 am

I’m a first time reader and now a new subscriber. This entry and the comments have definitely made me feel better about recent financial decisions I have made. I was accepted into a PhD program without any funding for the first two years. Since I knew I could get into a program with funding if I applied to more schools next year, I decided I would. So many of my friend were shocked, and told me to take out loans, and I’m wasting a whole year (I’m in my late twenties, so time is of the essence, apparently). I could take out 50,000 in loans now, or take a year and try to find a school that will pay me to go there. It’s not a hard decision for me, but there is definitely a mindset amongst my friends and acquaintances that things must come now, and if you can’t afford it, then loans and credit is the answer. I was waffling, thinking they may have a point, but I realize I have a lot of years ahead of me to build a career and become financially solvent. No rush; being a poor twenty-something is rite of passage that a lot of people are missing out on.

PS - I have a BA in anthropology. Hooray for virtually useless social science degrees.
Tim Rosanelli on April 26th, 2008 12:11 pm

You’re right on in this post!

I don’t buy the idea of the cost of living increases causing problems for the American families. If you look at median income increases compared to the price of bread (consumer goods), the percentage increase over the years is in favor to our income increase more than the bread.

I believe the problem is the number of additional temptations that we indulge in. For example, growing up, our family didn’t have cellphones, internet, ipods, cable TV, DVD’s, etc. because we were not invented or available yet.

Tim Rosanelli
Kathryn on April 28th, 2008 2:03 pm

Tim…

You should take a look at Elizabeth’s Warren’s numbers. She makes a good argument that it’s not actually the TVs and iPods (or even the food…which is cheaper now that 30 years ago) that’s causing the problem. It’s the big three: housing, healthcare, and education that have gone up in price all out of proportion to middle class salaries; and thus it’s families with children that tend to feel the squeeze the most.

Yes, people tend to buy bigger houses, but that’s not the whole story. The real premium is for houses in good school districts. I was lucky to find a 900 sq ft house for our first one. That 900 sq ft house with good school cost me as much as a 1800 sq ft house with a bad school would have. I paid more for the house because I was really buying schooling for our children.

I haven’t had a raise more than 1%/year in six years, and in that time I’ve had to take on health insurance premiums and quadrupled co-pays for health care. I know that I’m going backwards; and it sounds like I’m not the only one.
Karen on May 4th, 2008 7:56 am

Just read your post in the Chicago newspaper. I am older and kind of stuck in a no mans land where the rules and standards have changed so much I no longer know anymore what is the right way to deal with things. I never expected my parents to send me to college, you either did well in school and got scholarships or paid your own way through. I don’t think you could even get grants till your Jr. year because you had to make an investment and show good grades or you didn’t get them. I worked my way through as a cocktail waitress. I moved and lived in the state for year before I went so I could get in-state tuition. Many act like you must be college bound immediatly after highschool….I was a much better student with a few real living years under my belt….I was going to learn….not party. But it’s strange to think I could work, share rent and all the bills and fully pay for my tuition and books and come out not owing a dime. I cringe at what tuition is now. I shared a 4 bedroom 2 bath home with 3 other girls….50 bucks a month was our rent each. You can’t rent a cheap motel room for a night on that now. I did it as a cocktail waitress….made atleast 500 bucks a week part time. Hasn’t been many years where I made that much even with a degree. When I graduated and started working I made 12.50 an hour which was good money back then considering 3.25 was minimum wage….now that same job pays 6.50. Education and 20 years of experience and that’s it. Sad. My dad said work hard, be honest, pay your dues and it will reward you in the end. I worked hard, honest, paid my dues and the second things would start to look good, you’re ousted because they can hire someone to do it for cheaper…or it’s outsourced…or they close. Think that experience gives you an edge? Nope…might get you the job, but you start right back at square one. It used to be you never insulted an adult by giving them minimum wage. That was date money for 1st time, part time workers. Thing is though…if you worked 40 hr.s you could get by….you can’t anymore. You got your home and your extra car because your wife worked but the husbands pay always covered basic expenses and then you had your kids and your wife stayed home till they started school and then she’d go back part time or so and that’s where you got the money for the extras for the kids. If dad lost his job….moms pay would get you through till he found work again. As long as you kept your nose clean and weren’t stupid…it wasn’t all that hard to move ahead…cover your needs, base your wants on what you could afford and even put money in the bank.

I saw the change when they started getting rid of older people simply because they could dump them for someone for cheaper pay, when they could fire you for no reason or create one to where you couldn’t qualify for un-employment, when rent was more than buying a house, when you were too afraid to hire the boy down the street to mow your lawn for fear of being sued if a rock kicked back and hurt him, (that hurt us as well as the kids who have had so many jobs taken away to where they never learn when they are young about working to earn money etc) Don’t see many paper boys and girls anymore. Not safe anymore. I used to babysit for 50 cents an hour….now thats even risky on both sides…..even at 12 bucks an hour now. (Seriously the going rate here for a highschool babysitter) You used to be able to fix your own car, there weren’t bans on washing your car in your driveway, you didn’t sue your neighbor because your kid fell out of there tree or skinned their knee on your sidewalk. I could go on and on and on with how the world is so different now and I still don’t have an answer…I did the same things my parents did and I got an education, which should have given me a leg up…..but they changed all the rules mid-stream and I never got the rule book. Like the person above….for every step forward…there’s something comming along to put you 3 steps behind. If costs are rising I’m not paying for what I did wrong….I’m paying to cover for the mistakes of others so the top dog doesn’t loose. (Like bank fees will go up, new standards to meet, higher fees, it’s not that it really costs more…they pass there losses down to those who do pay.) Doesn’t make any difference how much I cut back…..I can guarentee I’m going to pay more next year….whether it be from here or because of “global demand”. It’s going to be a hard fall for many who start already in debt because I know what a struggle it is now to just maintain and keep what I already own when I’m living within my means….and getting older with less job oppertunites and still needing to live. I don’t have credit cards and won’t buy what I can’t afford….but some person in the city can drive by and say I need a new roof and if I don’t do it in x amount of time….they can take my home because of housing codes. Even though it’s fully paid for. We all fight to have something and then you have to fight to keep what you own. Now is just wondering how to counter the moves and plan ahead before they change the rules again.
Ann E. Bermingham on May 4th, 2008 6:19 pm

If one wants to get out from under the credit card debt or the desire to “have it all” I would encourage them to look into Voluntary Simplicity. Google it.

But I also am aware that companies, corporations and government feel that they are less responsible for anyone. No health care, no retirement funds, no guarentee of any future at all. So maybe that is why there is need to “have it all now”, because no is expecting to be here tomorrow.
Lou D on August 12th, 2008 5:18 am

In -Not Making It Like Mom and Dad, Nan Mooney laments that under 40-something professionals are struggling to achieve the same lifestyle as their parents. Does she really think that under 60-something people had it that much easier? During the 1974 - 1982 period, inflation averaged about 9 percent, topping out at over 13 percent. The unemployment rate averaged about 7.2 percent, reaching over 9.5 percent, and this period was also marked by two separate, oil shocks. This in addition to the ensuing tumultuous political environment affecting the United States both domestically, and internationally. She then continues about being a “college-educated professional’ without being specific to what her vocation is, or why she automatically deserves to afford the lifestyle she desires regardless of her personal or career choices.

Her viewpoints concerning stagnating middle income wages, growing gap between rich and poor have some merit. However the majority of people in past decades also endured paltry health insurance, retirement plans, and in fact, no allowances for child care. She attempts to explain the mythology about America consumerism as being something other then a lack of moral character, avarice, and greed,. Missing are such traditional American concepts as frugality, virtue, and dare I mention chastity. She portrays her own personal decision to become a single parent and to burden herself and child on her aging parents as a “creative solution”, and “recalibration of her life“. Is she really serious? And then furthermore becomes insolent enough to exalt a couple who deny their own child a house and so-called middle class comforts in order to sojourn to South America for six months, and for whose real benefit? She is audacious enough to tell the rest of us how we should understand our finances, and lower our own expectations while demanding increased big government support for childcare, healthcare, housing, and retirement programs. All naturally directed to irresponsible single parents like herself.

Growing up in lower middle-class circumstances at an early age I was taught the difference between wants and needs, and to take responsibility for my own actions. I was also made aware on how some of my more brainless decisions might have a negative affect on the rest of my family. There is a marked difference between people who are truly altruistic and those that are ethical egotists. And even more so between those that consider themselves to be individuals and those that are narcissistic.