Saturday, May 26, 2007

Is Family Income Growth Really Decelerating or Are Is Our Appetite Increasing?

Is Family Income Growth Really Decelerating or Are Is Our Appetite Increasing?

I think the answer to this question is yes and yes.

The new study I linked reviewed income levels, adjusted for inflation, of American men in their 30s, and came to the conclusion that the income growth of the average American household is declining; however our nation's productivity level is hardy and healthy.

Considering the cost of big ticket items necessary to live a comfortable life in the United States; it is not hard to believe that this generation of working men in their 30's are not doing as well as their fathers. Homes and the added cost of upkeep; cars and the added cost to run; computers (increasingly necessary), appliances ect make it very difficult to keep up with the Jones as easily "Father" did at one time.

At the same time, "Father" expected less. It seems as if each new generation demands bigger and better on a much larger scale then ever before. Of course new technology (cars, electricity, TV ect) enable new generations to live a little more comfortably than the previous one did, but I’m not sure if the greed factor played as important a role as it does now. People live in houses much larger than they could ever use; drive cars that are tanks; have more clothes than their super-duper walk-in closets have room for; and generally have more "toys" than one could ever play with.

I believe that Junior has a tougher time making ends meet because of both, income growth decreasing and consumer "needs" increasing to the point of no return, however this is because Junior woke up one day and decided he wanted bigger portions of everything. Much of it has to do with corporations underhandedly convincing us that a super-sized world is a much better place to live.

"The expectation that each generation will do better than their parents has become a fundamental part of what we call 'The American Dream,'" said Morton. "But this new analysis suggests this bedrock belief may be shifting under our feet."


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