Um, yeah, better...

So after checking my e-mail and Signing out I come across an article about how people feel they are worse off than their parents. The general thrust was that we're better off financially. However their arguments were fairly misleading. Considering that the source of the article I was reading was a magazine catering to the wealthy and wanna-be wealthy, this is understandable. (Forbes)

Here is the most important thing they brought up: According to their numbers: median income has increased by about 1/3 since the mid 1960's. (13% better than the mid 90's.. which means 2/3 of our supposed increase in prosperity came before Reaganomics "saved" us from the evils of government regulation) However the average income for those at the upper end of the economic spectrum have seen their incomes (adjusted for inflation) increase from about 40 times the median, to over 400 times the median.

To make this personal, imagine you are working for a company, and recieve a 33% raise. Pretty good right? the company must be making making money, you're doing your job well. Everything is good. Presumably other people in the company recieved increases of similar size since you're all working together to produce quality products and happy customers. However your boss recieved a 900% raise. 866% more of a raise than you recieved. Are you still going to be as happy working for that company? Doubtful, because while you can accept that your boss will recieve a larger sum of money in their raise, it would be reasonable to assume that it would be in proportion to your raise.

Compounding the problem is that the cost of living doesn't always increase in ways that are able to be adjusted for inflation. The computer I'm typing this on for example, can't be compared to a basic model personal computer from the 1960's. Because they didn't exist, but the PC is as much a basic part of life now as the Television set was then. So there is an added increase in the cost of living, just to be able to do banking, job searches, deal with some government agencies and communicate with each other.

A standard household of 4.5 people now has the added expenses of cable tv, cell phones, land lines, internet service, microwave ovens, and an almost 50% tax burden. (Approx. 33% wage taxes including soc sec. etc. , 6-8% sales tax, 3-5% property taxes, "sin" taxes, other surcharges and hidden taxes that aren't taken directly out of our paychecks) So apart from basic inflation pressures, that 33% is not going to our retirement accounts or business investments. It's going to the increased expense of living, not an increase in the relative quality of living.

Another area they didn't explore was how many employers offered quality health care, retirement packages, company parties, or vacation time.

The one area where they acknowledged their shortcomings was to let us know that the numbers thay were using did not include investment income. So the dividends on the free or highly discounted stocks the CEO purchased last year, aren't included. They only looked at wages.

There are many ways we are better off as a country than we were 40 years ago. We have more personal, religious, and expressionist freedoms. People no longer have to take to the streets in order to recieve basic rights like voting, and we don't have an "enemy" who can stand toe to toe with our militry and win. There is no need to distort numbers and give useles information in a "news" article. Unless the purpose of the article is to make people feel good about themselves for being the rich leaders of a robust economy, or for plugging away at their increasingly worthless jobs.


Here are the questions that need to asked to see if we are truly better or worse off than we were 40 years ago:

How many hours per week do the households wage earners need to work in order to cover all bills, and put some money into savings/ investments?

What percentage of your income goes to entertainment and recreation?

If you need to see a doctor or dentist, can you afford to?

How many day's or weeks of vacation do you have available per year?

Does your company offer a good retirement package?

Are you confident your company produces quality products?

Have you gone without a neccessity such as food, clothing, or shelter in the past 10 years?

Can you occassionally splurge on a nice dinner or family night out without having to worry about how you're going to pay for it?

Can you afford to send your children (or yourself) to college?

These questions would give a better understanding of how we are doing as oppossed to our parents and grandparents than a strict a simple analysis of income.