In the years after the 2007 recession, I came to the carefully documented conclusion after much study that living a “middle class” life is mostly impossible under “conventional” circumstances now without tremendous debt, and study after study continues to show this to be true. Now according to a recent study from American Compass and published by CBS News, this is statistically the case, where for the average worker, it would take 53 to 66 weeks of work to live a “normal” middle class life over 52 weeks.
Basically, the American dream really is no more.
The typical male worker must now work 53 weeks — or more than a year — to make enough to cover what American Compass Executive Director Oren Cass calls the annual “cost of thriving,” the earnings required to pay of a basket of essentials such as health care and housing. By comparison, in 1985 that same typical employee needed to work 30 weeks to cover those same costs, found a recent analysis from American Compass, a newly formed conservative economic think tank.
Women these days need about 66 weeks — or 13 more weeks than men — to afford the same basket of basics, given that they on average earn less than men. But like the typical male worker, they’ve also lost ground since 1985, when the average female employee could cover her basics after 45 weeks of income.
“One thing I want [Americans] to take away is that they are not crazy,” Cass told CBS MoneyWatch. “People who feel like the trends they are feeling in the economy are posing real challenges to households are correct. To an economist who says, ‘Who are you going to believe, my statistics or your lying eyes,’ they should have confidence that what they are seeing in the world is happening.” (source)
This study does not surprise me in the least. I am more surprised that people in general were not more willing to admit to this and accept it, as these results are all around us as evidenced by the fact that people are poorer, sadder, and more angry than in the past as prices rise or remain stagnant, portions remain the same or get smaller, and wages stagnate or decline either by wage reduction or inflation.
The evidence is all around the society. Things are not getting better except for those who are extremely wealthy, with most of their money being made by financialization. For the man on the street where a few dollars can mean the difference between a good or a bad day, life has become very hard.
As the story notes, you are not crazy for having the sense that the economy is getting worse. It is, and this study is proof of that.
It is the reason why as I have said and will say again, work as hard as you can right now, pay down debts, and do what one can, because there will come a time when things may get so bad one will only be able to rely on what one has stored for oneself.
Remember the tale of the ant and the grasshopper.
Don’t get caught in winter alone.