The average American at 300 million

Forbes.com ^ | 10/18/2006 | Tom Van Riper

[WFTR]

As the U.S. population crossed the 300 million mark sometime around 7:46 a.m. Tuesday (according to the U.S. Census Bureau), the typical family is doing a whole lot better than families were in 1967, the year the population surpassed 200 million.

Mr. and Mrs. Median's $46,326 in annual income is 32% higher than their mid-1960s counterparts, when adjusted for inflation, and 13% more than those at the median in the economic boom year of 1985. And thanks to ballooning real-estate values, average household net worth has increased even faster. The typical American household has a net worth of $465,970, up 83% from 1965, 60% from 1985 and 35% from 1995.

Throw in the low inflation of the past 20 years, a deregulated airline industry that's made travel much cheaper, plus technological progress that's provided the middle class with not only better cars and televisions, but every gadget from DVD players to iPods, all at lower and lower prices, and it's obvious that Mr. and Mrs. Median are living the life of Riley compared with their parents and grandparents.

So why are they so unhappy?

Despite their material prosperity, though, the Medians are a grumpy lot. A Parade magazine survey conducted by Mark Clements Research in April said 48% of Americans think they're worse off than their parents were. A June 2006 study by the GfK Roper group reported that 66% of Americans said that their personal situations in the "good old days" -- defined by the bulk of respondents as anywhere between the 1950s and the 1980s -- were better than they are today. And in May, a Pew Research Center poll said half of U.S. adults think the current trends point toward their children's future being worse than their own present.

[Don Corleone]

I have a crazy idea. What if we as human beings only need so much "wealth", and after a certain amount of wealth, money isn't the most important aspect in our lives.

Isn't that Hitlery's plan..to take from the haves and give to the have nots? That's what she said she wanted to do....remember? Politicos say what they mean. We just have to listen more closely.

[USrules]

There are less traditional families (parents + children ) these days and more single households compared to the 60's. Thus despite the marked increase in individual personal income, the median houshold income has increased only modestly.
Put simply, the average Joe is earning significantly more than previously but he/she chooses to stay single:)

From : http://en.wikipedia.org/wiki/Household_income_in_the_United_States

Since 1967, the median household income in the United States has risen modestly, fluctuating several times. Even though personal income has risen substantially and 42% of all household now have two income earners, the median household income has increased only slightly. According to the US Census Bureau, this paradoxial set of trends is due to the changing structure of American households. For example, while the proportion of wives working year-round in married couple households with children has increased fron 17% in 1967 to 39% in 1996, the proportion of such households among the general population has decreased. Thus, while married couple households with children are the most economically prosperous type of household in the United, their share of the population has been dwindeling in the United States. In 1969, more than 40% of all households consisted of a married couple with children. By 1996 only a rough quater of US households consisted of married couples with children. As a result of these changing household demographics, median household income rose only slighly despite an ever increasing female labor force and a considerable increase in the percentage of college graduates.[23]

"From 1969 to 1996, median household income rose a very modest 6.3 percent in constant dollars... The 1969 to 1996 stagnation in median household income may, in fact, be largely a reflection of changes in the size and composition of households rather than a reflection of a stagnating economy."- John McNeil, US Census Bureau

[SaxxonWoods]

You are on the right track, the next step is to realize that your time to "get ahead" starts at the end of your 8 hour workday. Your job is for survival, to get ahead you must also start a business. I don't have a job anymore, I have 3 one-man businesses. There is something in your life that you would do for free, just becuase you like it. Plan a way to make money at that, or something at least related to it. Buy this old paperback book and read it 3 times a year: "Think and Grow Rich." The author is not writing only of monetary wealth, though he does cover that. He is writing of living a rich life. You have what it takes, you are a thinker, and what you think can become a reality. Think the right things, and create what you desire. Freep me anytime with questions about this, and best of luck, though we make our own luck.

[LibertarianInExile]

"One reason that many people may feel pessimistic about finances is that they see looming problems with Social Security and other entitlement programs. We can't consume more than we produce, and someone is going to have to produce whatever Social Security is going to consume."

I think this is one impetus behind so many people buying homes and going into debt beyond their long-term means. Beyond the obvious reasons (people need housing, people want stuff) there is really no sense in such skyrocketing consumption--unless you look at the real impact of knowing, years in advance, that Social Security and Medicare are basically dooming America to bankruptcy. With these redistributionist programs' beneficiaries committed to bleeding this country white and the folks who are being bled now realizing they will pick up the pieces afterward, too, it is not so hard to believe that many have simply committed themselves to their own families, most withdrawing from the national scene every bit as harshly as the boomers project themselves into it.

Personally, it is more and more difficult to find food-stamp steak-eaters, welfare frauds and lifetime students criminal, even as they are adjudged by this system. When one looks at the taxes on income, groceries, and property, it is difficult to conceive how taking illegitimately from the corrupt federal government is more evil than the myriad takings and shacklings of liberty the federal government now deems legitimate in the name of 'good'--whatever the hell that means these days.

[WFTR]

It simply shows that the planet is not as crowded as we've been led to believe, especially considering that the lament of over-population has been used to justify abortion, euthanasia and assorted other population controls.

If the statistic cannot be used for urban planning, then it really doesn't have anything to do with the debate about overpopulation. The statistic is used as if the overpopulation debate is one of square feet or square miles, but that's not all there is to the debate. Furthermore, even if you tried to reduce the debate to square feet, telling us that every family will be confined to a 50 x 150 foot lot is the same as telling many of us that we will live in a hell on earth. When society was talking about every family having 40 acres of fertile ground and a mule, then we weren't overcrowded. When we're talking about a 50 x 150 lot, we're overcrowded.

[WFTR]

I'm not sure where they get the idea of low inflation.

I agree that this claim doesn't seem credible.

[WFTR]

This is another way in which, in nonfinancial terms, our standard of living has apparently fallen.

That's another good point.

[WFTR]

You make good points. Thanks for the post.

[WFTR]

You say that your grandfather's general store had a customer base of 10,000 people. Have you sold to 10,000 people through your e-Bay store? If not, how many total customers have bought from you? How many of them have bought from you more than once? How many of your grandfather's customers bought from him once a week? How many of your customers buy from you once a week?

You say that you have lower overhead than your grandfather did. Undoubtedly, you don't have to stock shelves and sweep floors, but you do have to pay for shipping of items to you in bulk and then pay for shipping of each item from your house to the customer. I'd guess that packaging each item for shipping is more expensive than putting it in a brown paper bag and handing it to the customer who will then drive home. You can charge someone for "shipping and handling," but those costs are still part of the "overhead." If each of your customers could arrange to drop by your place in a couple of days to pick up the order themselves, you could be pocketing a great deal more money that is currently going to UPS, FedEx, or whoever your shipper is.

My great-aunt was born in 1903 to poor German immigrants. She married a man who worked in hardware sales and eventually owned his own hardware store. In the early days of their marriage, they pinched their pennies and dimes and went to the bank to buy stocks when they could. They weren't extravagantly rich or connected. They were just middle-class merchants doing some investing at a time when many in the middle and lower classes didn't bother with the stock market. They didn't have any fancy schemes for timing entry and exit from the market, but they became millionaires.

Maybe your grandfather was too far in the country to invest, but my great-uncle was from the country too. He and other family members found ways to invest. The internet helps with investing. It's nice to follow those daily trends to get a better feel for a stock. I probably check my stocks two or three times every day. I check my funds about once a week. The internet makes things convenient, but the notion that our fathers and grandfathers couldn't have invested just as effectively as we can simply isn't true.

I'm not looking to be particularly wealthy or to live a high lifestyle. I'm simply looking for a modicum of security and comfort. A middle-class job that wouldn't disappear and the better benefits that came with years of service cover most of what I need. I'm not interested in having to chase money 24/7/365, but the choice today seems to be between that perpetual chase or too high a likelihood of poverty. I think that's a poorer choice than what previous generations had.

Bill

[WFTR]

Thanks for another good post on this issue. I still get the heebie geebies thinking about all of those people standing in five-foot squares. I could have nightmares about that prospect.

Bill

[WFTR]

Interesting numbers, thanks!

[WFTR]

I'm sure that starting some kind of off-hours business would give me more opportunities to get rich, but that solution is not without problems. For instance, my employer has many rules about what we can and cannot do in terms of personal businesses. The company gets to review any idea that I might have for a patent. If the company decides that I'm trying to patent something that is too close to what I do for the company, they can prevent me from getting the patent. Maybe I would win a lawsuit over the issue and maybe I wouldn't, but if we reached that point, I'd likely be out of a job. If I found myself out of a job, then I no longer have what you just admitted was my means of survival.

I've toyed with the idea of doing some kind of writing, but again, my employer could do something similar if I tried to copyright and sell any writing. Some guys in the company have published a few things, but doing so involves a great deal of hassle with the company lawyers. If we reached a point of disagreement, I could be out of a job or find myself so angry that my work would be affected.

I suspect that one reason that people feel more discouraged about their financial futures is that many of us work for companies where the CEOs make huge salaries in spite of making stupid decisions. However, the company lawyers keep writing rules that make us choose between the job we need for survival and the type of outside activities that you mentioned were the key to further riches.

In any case, I appreciate your words of encouragement. If my past had been different and I didn't feel so insecure about my career, I'd be more inclined to try some of these things. However, I'll skip some opportunities not to come to the attention of the company lawyers.

Bill

[WFTR]

I feel the same frustration that you do. I wish I had an answer.

[stephenjohnbanker]

This article is pure pablum, and you are a star!

[WFTR]

Thanks for the kind words!

[stephenjohnbanker]

You EARNED the accolades!

[quesney]

"the choice today seems to be between that perpetual chase or too high a likelihood of poverty. I think that's a poorer choice than what previous generations had."

Very well said. I think a lot of the hype these days about the wonders of our high-tech economy, the Dow, our GDP growth, etc. obscure this basic issue. The tradeoff between work and leisure, risk and reward and the requirements for achieving and **keeping** a comfortable middle-classlife appear to have gotten tougher for many Americans.

[SamAdams76]

What I've learned is that some people are whiners and complainers who will never be happy with what they have and others are positive, optimistic people who make the best of any circumstance.

So in terms of happiness and well-being, these type of articles are useless.

[Caipirabob]

So why are they so unhappy?

God is not the center point of American life now so much as personal gratification.

The problem is that despite how many "things" one accumulates, it is never so satisfying as the spiritual fulfillment one receives via a relationship with the almighty. Yet the cultural crusade against those of faith has claimed a huge number of victims who turn away from God and place their faith in "things".

What can I say? Good luck attaining spiritual fulfillment from that DVD player or Ford Mustang there, fellah.

[Mad Dawgg]

"The internet may allow you to do different things than what your grandfather did, but the overall return on effort will not necessarily be better."

Sure sure sure, I mean hell all Grandpa had to do was be at his store from 6AM to 6PM and just wait on customers to come in. (Of course if he wasn't there he made no money.) I mean I have to endure the agony of checking my Ebay store after I get my email notice. Sometimes I have to actually work 2 hrs a day getting packages ready and taking them to the post office, and then I only have to take my stuff to the post office if my orders come in after the mailman does his rounds here.

Yeah Grandpa had it a lot easier with his twelve hour days. I mean sometimes I can only watch two DVDs in the morning before I have to go up in front of the building we live in to check my Ebay store on the Internet.

BTW Grandpa hoped to turn his goods in 30 days. I turn mine in 1-7 and make 20% profit in that time period. And that is real profit because I can figure my costs down to the penny before I sell a single thing. I have 10 times the free time my Grandfather did, and have the ability to invest my profits at a speed he could not have achieved. The speed at which I can obtain timely market info wasn't even available to those on the NY stock exchange in my grandfather's time, let alone to the common man in the USA.

Me thinks you are clueless on what exactly the Internet has done for investors and business people. Hell, just the time saved by my wife when she pays our business bills online is astonishing.

Mad Dawgg