The end of the world (or at least the US middle class) as we know it….

[DWCAP]

bjenson,

Some interesting points. I tend to agree with some of it, namly that a BS is not what it use to be. The push to get everyone into college has led to a college education not being worth as much. I have only 1 friend without a BS, and he has an AA and 9 years navy, AND is working on his BS. If everyone applying for a job has a college education, does it really give you an advantage anymore? I would agree that an MS is the old BS.

As for not being able to make it as a late 20’s professional; I disagree. I have numerous friends who are doing very well, and some who even own their own homes. None are in California. I mean that litterally, NONE of the obviously successful ones are in CA, but they are doing very well in Las Vegas, Texas, Baltimore, New Jersey,the Twin Cities, Chicago, and a few other cities. The ones who have stayed in CA are either obviously trying to save money and skimping on everything dreaming of massive depreciation, or spending like pimps but have nothing of any real value.

Plus I kinda think the definition of middle class has changed alot since your inlaws were young. European vacations were something to enjoy as a reward at the beginning of retirment, not a high school graduation gift. Vacations were camping, or going to visit Uncle Joe at his house, or a day at the beach and a BBQ. Purses never were worth more than the money found inside them, and a Cadalliac was something you rewarded yourself with at age 50, not a BMW at age 30. People had a TV per house, not a room per TV.

I guess my point is that the trappings of the middle class have changed. I once had a co-worker 6 months out of college tell me difinitivly that anything less than 100K PER Person (ie 200K per couple) was the MINIMUM you needed to make to be OK. Her dad was a plumber, her mom a teacher before she had kids. She was not born into wealth, but she sure had the idea that anything less than name brand and 4 star was sluming it.

[DWCAP]

bjenson,

Some interesting points. I tend to agree with some of it, namly that a BS is not what it use to be. The push to get everyone into college has led to a college education not being worth as much. I have only 1 friend without a BS, and he has an AA and 9 years navy, AND is working on his BS. If everyone applying for a job has a college education, does it really give you an advantage anymore? I would agree that an MS is the old BS.

As for not being able to make it as a late 20’s professional; I disagree. I have numerous friends who are doing very well, and some who even own their own homes. None are in California. I mean that litterally, NONE of the obviously successful ones are in CA, but they are doing very well in Las Vegas, Texas, Baltimore, New Jersey,the Twin Cities, Chicago, and a few other cities. The ones who have stayed in CA are either obviously trying to save money and skimping on everything dreaming of massive depreciation, or spending like pimps but have nothing of any real value.

Plus I kinda think the definition of middle class has changed alot since your inlaws were young. European vacations were something to enjoy as a reward at the beginning of retirment, not a high school graduation gift. Vacations were camping, or going to visit Uncle Joe at his house, or a day at the beach and a BBQ. Purses never were worth more than the money found inside them, and a Cadalliac was something you rewarded yourself with at age 50, not a BMW at age 30. People had a TV per house, not a room per TV.

I guess my point is that the trappings of the middle class have changed. I once had a co-worker 6 months out of college tell me difinitivly that anything less than 100K PER Person (ie 200K per couple) was the MINIMUM you needed to make to be OK. Her dad was a plumber, her mom a teacher before she had kids. She was not born into wealth, but she sure had the idea that anything less than name brand and 4 star was sluming it.

[Eugene]

Without watching the presentation I can say this. There’s such thing in the economy as supply and demand. We import clothes and appliances from China and we pay (roughly) as much for them as Chinese and Europeans. If Americans get wealthier and everyone else stays behind, we start paying smaller percentage of our wages for clothes and appliances, we have more money left, chasing a limited number of houses in desirable areas, limited amount of medical services (doctors’ time), limited number of spots in good colleges. Necessarily, house prices, health insurance, cost of education, etc. go up faster than inflation.

In the end, your income is the determining factor that says if you’re going to live in a big pretty house with excellent schools, and if your children are going to get good college education. If you’re middle class, you’re not going to save much money, because you’ll spend it all competing with other middle-class and upper-class folks for limited-supply goods and services. Upper class folks will buy all the same services and have enough money left over to save and to invest. They will get richer and you will stay poor. Marx called it “the law of centralization and concentration of capitals”.

In a fair world, our government would provide free healthcare and free/cheap merit-based college education. That would make houses appreciate even faster.

They way out of the rat race is to live below your means, save and invest today to reap benefits tomorrow. Pick an older house in a less-distinguished school district because your peers will bid up prices in CV and 4S to the point where you’d have to spend half of your after-tax income on interest and property taxes. Drive a cheaper car, don’t buy jewelry, don’t go on cruises. Give up Starbucks.

[Eugene]

Without watching the presentation I can say this. There’s such thing in the economy as supply and demand. We import clothes and appliances from China and we pay (roughly) as much for them as Chinese and Europeans. If Americans get wealthier and everyone else stays behind, we start paying smaller percentage of our wages for clothes and appliances, we have more money left, chasing a limited number of houses in desirable areas, limited amount of medical services (doctors’ time), limited number of spots in good colleges. Necessarily, house prices, health insurance, cost of education, etc. go up faster than inflation.

In the end, your income is the determining factor that says if you’re going to live in a big pretty house with excellent schools, and if your children are going to get good college education. If you’re middle class, you’re not going to save much money, because you’ll spend it all competing with other middle-class and upper-class folks for limited-supply goods and services. Upper class folks will buy all the same services and have enough money left over to save and to invest. They will get richer and you will stay poor. Marx called it “the law of centralization and concentration of capitals”.

In a fair world, our government would provide free healthcare and free/cheap merit-based college education. That would make houses appreciate even faster.

They way out of the rat race is to live below your means, save and invest today to reap benefits tomorrow. Pick an older house in a less-distinguished school district because your peers will bid up prices in CV and 4S to the point where you’d have to spend half of your after-tax income on interest and property taxes. Drive a cheaper car, don’t buy jewelry, don’t go on cruises. Give up Starbucks.

[Eugene]

Without watching the presentation I can say this. There’s such thing in the economy as supply and demand. We import clothes and appliances from China and we pay (roughly) as much for them as Chinese and Europeans. If Americans get wealthier and everyone else stays behind, we start paying smaller percentage of our wages for clothes and appliances, we have more money left, chasing a limited number of houses in desirable areas, limited amount of medical services (doctors’ time), limited number of spots in good colleges. Necessarily, house prices, health insurance, cost of education, etc. go up faster than inflation.

In the end, your income is the determining factor that says if you’re going to live in a big pretty house with excellent schools, and if your children are going to get good college education. If you’re middle class, you’re not going to save much money, because you’ll spend it all competing with other middle-class and upper-class folks for limited-supply goods and services. Upper class folks will buy all the same services and have enough money left over to save and to invest. They will get richer and you will stay poor. Marx called it “the law of centralization and concentration of capitals”.

In a fair world, our government would provide free healthcare and free/cheap merit-based college education. That would make houses appreciate even faster.

They way out of the rat race is to live below your means, save and invest today to reap benefits tomorrow. Pick an older house in a less-distinguished school district because your peers will bid up prices in CV and 4S to the point where you’d have to spend half of your after-tax income on interest and property taxes. Drive a cheaper car, don’t buy jewelry, don’t go on cruises. Give up Starbucks.

[Eugene]

Without watching the presentation I can say this. There’s such thing in the economy as supply and demand. We import clothes and appliances from China and we pay (roughly) as much for them as Chinese and Europeans. If Americans get wealthier and everyone else stays behind, we start paying smaller percentage of our wages for clothes and appliances, we have more money left, chasing a limited number of houses in desirable areas, limited amount of medical services (doctors’ time), limited number of spots in good colleges. Necessarily, house prices, health insurance, cost of education, etc. go up faster than inflation.

In the end, your income is the determining factor that says if you’re going to live in a big pretty house with excellent schools, and if your children are going to get good college education. If you’re middle class, you’re not going to save much money, because you’ll spend it all competing with other middle-class and upper-class folks for limited-supply goods and services. Upper class folks will buy all the same services and have enough money left over to save and to invest. They will get richer and you will stay poor. Marx called it “the law of centralization and concentration of capitals”.

In a fair world, our government would provide free healthcare and free/cheap merit-based college education. That would make houses appreciate even faster.

They way out of the rat race is to live below your means, save and invest today to reap benefits tomorrow. Pick an older house in a less-distinguished school district because your peers will bid up prices in CV and 4S to the point where you’d have to spend half of your after-tax income on interest and property taxes. Drive a cheaper car, don’t buy jewelry, don’t go on cruises. Give up Starbucks.

[Eugene]

Without watching the presentation I can say this. There’s such thing in the economy as supply and demand. We import clothes and appliances from China and we pay (roughly) as much for them as Chinese and Europeans. If Americans get wealthier and everyone else stays behind, we start paying smaller percentage of our wages for clothes and appliances, we have more money left, chasing a limited number of houses in desirable areas, limited amount of medical services (doctors’ time), limited number of spots in good colleges. Necessarily, house prices, health insurance, cost of education, etc. go up faster than inflation.

In the end, your income is the determining factor that says if you’re going to live in a big pretty house with excellent schools, and if your children are going to get good college education. If you’re middle class, you’re not going to save much money, because you’ll spend it all competing with other middle-class and upper-class folks for limited-supply goods and services. Upper class folks will buy all the same services and have enough money left over to save and to invest. They will get richer and you will stay poor. Marx called it “the law of centralization and concentration of capitals”.

In a fair world, our government would provide free healthcare and free/cheap merit-based college education. That would make houses appreciate even faster.

They way out of the rat race is to live below your means, save and invest today to reap benefits tomorrow. Pick an older house in a less-distinguished school district because your peers will bid up prices in CV and 4S to the point where you’d have to spend half of your after-tax income on interest and property taxes. Drive a cheaper car, don’t buy jewelry, don’t go on cruises. Give up Starbucks.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[bjensen]

I can assure you all that my idea of middle class involves vacations close to home, no air travel, and a used car.

I left a sales career in preparation for law school and now work in a non-sales role where I barely break 50k. I know others who have strong resumes from fortune 500 companies in my same position that only negotiated salaries around 38-40k. I have 1 car payment on a 5 year old car. I live in a 2 bed apartment that is WAY below market rent @ $1150. These days we struggle to make it.

I don’t think my worldview of middle class is much (if any) different than my father’s was in 1970. He managed it on one income, and he is a Farmer. I can’t accomplish half what he did financially by my age, even with a bachelors degree and a professional position. They didn’t have Ipods back then, but I don’t either. I guess the only thing I can think of that I “need” that they didn’t is a computer and an internet connection.

I don’t think it’s all that easy out there for the average American these days. If Americans outside the professional class make less in inflation adjusted dollars than they did in 2000, just think what it would look like if the govt. included housing and energy in the CPI.

[bjensen]

I can assure you all that my idea of middle class involves vacations close to home, no air travel, and a used car.

I left a sales career in preparation for law school and now work in a non-sales role where I barely break 50k. I know others who have strong resumes from fortune 500 companies in my same position that only negotiated salaries around 38-40k. I have 1 car payment on a 5 year old car. I live in a 2 bed apartment that is WAY below market rent @ $1150. These days we struggle to make it.

I don’t think my worldview of middle class is much (if any) different than my father’s was in 1970. He managed it on one income, and he is a Farmer. I can’t accomplish half what he did financially by my age, even with a bachelors degree and a professional position. They didn’t have Ipods back then, but I don’t either. I guess the only thing I can think of that I “need” that they didn’t is a computer and an internet connection.

I don’t think it’s all that easy out there for the average American these days. If Americans outside the professional class make less in inflation adjusted dollars than they did in 2000, just think what it would look like if the govt. included housing and energy in the CPI.

[bjensen]

I can assure you all that my idea of middle class involves vacations close to home, no air travel, and a used car.

I left a sales career in preparation for law school and now work in a non-sales role where I barely break 50k. I know others who have strong resumes from fortune 500 companies in my same position that only negotiated salaries around 38-40k. I have 1 car payment on a 5 year old car. I live in a 2 bed apartment that is WAY below market rent @ $1150. These days we struggle to make it.

I don’t think my worldview of middle class is much (if any) different than my father’s was in 1970. He managed it on one income, and he is a Farmer. I can’t accomplish half what he did financially by my age, even with a bachelors degree and a professional position. They didn’t have Ipods back then, but I don’t either. I guess the only thing I can think of that I “need” that they didn’t is a computer and an internet connection.

I don’t think it’s all that easy out there for the average American these days. If Americans outside the professional class make less in inflation adjusted dollars than they did in 2000, just think what it would look like if the govt. included housing and energy in the CPI.

[Author]

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