The Shrinking Middle Class in America

[Jon Miller]

It's not what people who have a high quality of life (generally) do.

JM

[Al B. Sure!]

All this talk about skimping and living on a dollar a day isn't relevant because it's not what the median household in 1970 was doing anyway!

[Boris Godunov]

It's not what people who have a high quality of life (generally) do.

JM

Dude, you admitted you spend $20+/day on food, which is astronomical. Maybe its your notion of "reasonable" that's the problem, not mine?

[Boris Godunov]

All this talk about skimping and living on a dollar a day isn't relevant because it's not what the median household in 1970 was doing anyway!

I bet people in the 1970s were a lot more frugal with their food costs than we are today. Fast food and eating out has exploded within the last two decades. In the 70s and earlier, people ate at home much more. As was mentioned, that $7.33/day average food expense includes the fact that many, many Americans spend more money than they have to buying unnecessary "frill" food items.

I've yet to see any convincing evidence that when it comes to food expenditures, people's income today doesn't go as far as it did 40 years ago. If anything, I'd bet the average American has the ability to buy larger quantities and variety of foodstuffs at their disposal today than they have at any time in the past.

[Jon Miller]

I know I spend a lot on food. My notion of reasonable is normal for the vast majority of people, as seen by the average. As also seen by my examples (which are many, unlike you/jaguar who haven't come up with one example, just a list showing it is possible) who scrimp and save on food.

By the way, now I live in Sweden and my food behavior is a lot more reasonable than it was before, but still has me spending ~20$ a day.

10$ of that is the daily cafe that my group goes to, and I would save a bit by bringing something from home, but it is an important part of being a member of the group, I enjoy it, and it is actually a good deal for prepared food in Sweden.

Otherwise, I eat simple stuff (eggs, bread, protein powder, etc) or simple microwave stuff (veggie meat, brussel sprouts) which considering I am at work 12-16 hours a day is reasonable (I am not actually working all those hours).

JM

[Jon Miller]

What I could find:

http://findarticles.com/p/articles/mi_m0813/is_10_29/ai_95105805/

http://www.nytimes.com/imagepages/2008/08/03/business/03metrics.graphix.ready.html

http://www.faqs.org/nutrition/Diab-Em/Dietary-Trends-American.html

http://www.ers.usda.gov/Publications/EIB33/EIB33.pdf

How much Americans spent:

http://www.ers.usda.gov/AmberWaves/September08/Findings/PercentofIncome.htm

Is interesting.

JM

[Boris Godunov]

I know I spend a lot on food. My notion of reasonable is normal for the vast majority of people, as seen by the average.

What's normal and what's reasonable are two different things, and I know you're smart enough not to conflate those two ideas. Just because the average spent on food is $7/day doesn't in any way whatsoever suggest it's not reasonable to spend only $2/day on food. As has been said, that $7/day figure must account for the fact that most Americans spend more on food than they need to, either for convenience or because they eat relatively extravagantly.

As also seen by my examples (which are many, unlike you/jaguar who haven't come up with one example, just a list showing it is possible) who scrimp and save on food.

What? How are your anecdotes in any way better than our anecdotes? Hell, Jaguar's alone is already better than yours, since he's referencing first-hand experience purchasing food and has receipts to back it up, while you're relying on "my friends tell me..."

[Jon Miller]

My friends do something, and consider what they do reasonable. Jaguar doesn't even do what he described, he claims it is reasonable... if he doesn't practice it and this doesn't give a very strong case that it is reasonable does it? Rather it is just some theoretical limit.

No one has actually came forward and practiced Jaguars diet and claimed it was reasonable. It isn't even an anecdote.

JM

[Kuciwalker]

All this talk about skimping and living on a dollar a day isn't relevant because it's not what the median household in 1970 was doing anyway!

AS, you are just a ****ing moron. It doesn't matter what the median household in 1970 was doing. All that matters is what was the value of $7k then versus what is the value of $30k in 2004. Since we can't measure those directly, we compare them by saying "what could I buy with 7k in 1970" and "what could I buy with 30k in 2004" and seeing which set of stuff we would prefer.

CPI is often used as a measure of the change of the real value of money. But if adjusting for CPI produces a different answer than the one above, then we know conclusively that CPI is not an accurate measure of that change.

[Al B. Sure!]

So why is it taking more working hours per household and credit card debt to live at the median level in 2010 but it took neither to live at the median level in 1970?

How is that an indication that the quality of life has improved so significantly? How is that an indication that the real dollar you earn today has more value than it did in 1970?

If real wages have increased, why do we go into debt? Why do we have to have two wage earners per family?

Clearly, something has been lost.

[Hauldren Collider]

Because it makes economic sense to go into debt, or you are an idiot trying to live a better life than you can afford.

[Kuciwalker]

So why is it taking more working hours per household and credit card debt to live at the median level in 2010 but it took neither to live at the median level in 1970?

this almost answers itself.

AS, the median level of consumption is a function of what everyone else is consuming. So if everyone else decides that it's worth working more hours and going into debt in order to buy more stuff, then people who don't do those things will now have below-median consumption!

You are making the obvious mistake of thinking that the median level of consumption in 1970 represents the same amount of value as the median level of consumption in 2010, even though quite obviously it's been four decades since then so we actually have way more valuable stuff.

[Kuciwalker]

In fact, the fact that people are working more hours and going into debt could be taken as strong circumstantial evidence that the dollar is MORE valuable than otherwise, because people are willing to devote even more effort into getting them!

If the only things I can buy are food, clothing, and shelter, than I'm going to work hard enough to get however much of those I want, and then spend the rest of my time on leisure. If I am suddenly given the option of buying a computer and tons of video games, I will work MORE hours because now I can get more cool stuff!

[Al B. Sure!]

In fact, the fact that people are working more hours and going into debt could be taken as strong circumstantial evidence that the dollar is MORE valuable than otherwise, because people are willing to devote even more effort into getting them!

Or that they're real wages per wage earner have declined or stagnated, especially compared to a rise in consumption

[Kuciwalker]

Actually not. The first-order effect of a decline in the real value of wages would be a DECLINE in hours worked, until that decline started threatening an individual's ability to acquire necessities.