Economic Stresses

Popular economic discussions focus on unemployment, GDP, and median income. The discussions generally fail to distinguish between money and real wealth. In failing to make this distinction we have failed to recognize increased stresses affecting workers and families in the current economy. Here we address that oversight.

Draft: March 2012

Related pages at this site

• changes in income distribution
• employment trends
• drop in share of GDP
• expenses as portion of income
• shape of the recent recession
• misleading economic measures
• money is not wealth
• fair economic exchange
• GDP vs standard of living
• payroll taxes
• tax burden
• fossil fuel externalities
• non-linearities in employment

Part 2: Time Related Stress on Workers

To estimate the time-stresses on American families we might start by comparing what we see now to a previous generation. We start by looking at how working money affects our time.
In the 1960s the typical American family had 5 or more members. One was a breadwinner and one was a housekeeper. Now, the typical American family has two breadwinners 3 or more members. With smaller families and more workers we should be nearly twice a wealthy. But that doesn't seem to be the case. To figure out why we can list time requirements typical then and now. In the 1960s it was common to hear about workers with 3 weeks' vacation, two 15 minute mandatory breaks, and 5 paid holidays. Now it's common to hear of workers who work on holidays, have only a few days of paid leave, work through lunch and take work home with them. We will first chart time spent working for money.

Without these increased hours most families feel they cannot keep up with their careers or with their bills. The total hours that the typical family spends working for money and working for the opportunity to earn money has risen significantly putting added stress on both individuals and relationships. Workers are exhausted.

Outside links

• excess work reduces productivity
• 2 incomes a necessity
• The Overworked American

Part 3: Financial Stresses on Workers

In discussions of incomes and wages we frequently fail to recognize that employment comes at a cost. Above we looked at the time demands related to employment. Here we review the financial costs required to be employed.
In the 1950s and 1960s it was common for people to find work with sufficient income to raise a family without pursuing a degree. Now, most jobs that offer pay enough to keep workers out of poverty require a college degree. Since 1960 the cost of college education rose sharply. In the 1950s a year of college cost about half a year's pay for a typical laborer. Now, a typical year of college costs about two years pay for a typical laborer. Even after grants and scholarships citizens can expect to pay over $50,000 just to get a degree.

Many jobs in the modern economy require cyclic training or retraining. Many companies require the worker to pay the cost of the training. A laid-off worker has to pay for his own training. Many jobs require workers to have a certification which the worker typically has to pay for and maintain with retraining.

In the 1950s most Americans could walk or take public transportation to work, the store, or the services they needed. Now, most of these things require a car. In most areas it is hard for workers to find employment less than a 20 minute drive away. Most families now require two cars - so that either both adults can get to work, or so that one can get groceries purchased and tasks completed while the other is at work. Most jobs and job searches now require internet access. Most jobs require workers to check e-mail or on-line information which frequently occurs from home.

In the 1950s with a more stable economy workers moved less. They could rely on one parent, extended family, and neighbors to take care of their children most of the time. Now with both parents working, most families must rely on child care for a few years, summers, or after school.

With both parents working, commuting, and running kids to daycare or soccer, less time is available for home cooked meals. Families are more dependent on prepared foods, fast foods, and restaurants. Families are not so much eating out for the experience as they are buying prepared foods because they're too rushed and tired to cook.

It's a little hard to imagine, but it currently costs the typical American nearly $10,000 a year just to productively participate in the American economy! But this does not include the cost of the second college degree, the second car, or the child care so that both parents can work for money.

So just to enter the economy currently costs the typical family over $18,000 per year. That does not include the costs of food, housing, health care, or retirement. As with time above, we see that families are stressed to their limits. The costs of being available to work are a large percentage of the typical wages leaving minimal funds left for the actual experience of life.

Observations & Conclusions:

Although the median annual salary has remained relatively unchanged since the mid-1970s, the total amount of work that families are doing to earn than money has increased significantly. The costs of finding decent work with decent pay have risen significantly also. Effective hourly wages are down from their peak in the early 1970s.
From the Great Depression until the early 1970s wages for most Americans increased and with the increase in wages leisure time increased. From about 1980 until 2000 Americans maintained their increasing material wealth by giving up leisure time, working more, and saving less. Since roughly 2000 Americans attempted to maintain their standard of living by borrowing faster than they were earning. The official reports showed incomes stable (stagnant) and GDP up. But the higher GDP failed to produce a higher standard of living.