What would happen if you compared a middle-class family in 1970 with a middle class family in 2009?
Distinguished Harvard law scholar, chair of the Congressional Oversight Panel, and one of Time magazine’s 100 Most Influential People in the World in 2009, Elizabeth Warren, has crunched the numbers and here’s what she finds:
In 1970, the average husband-wife-and-two-kids family had one wage earner, and in 2009 the average family has two wage earners. And although today’s families spend much less ( in adjusted dollars) on clothing, food, appliances, and electronics, they have much less disposable income, and zero savings.
So, what’s up? Where does today’s second wage earner’s extra income get swallowed up?
For starters, in 1970, the average family’s kids followed their parents into the middle class by going through 12 years of free K-12 education. Today, those kids won’t likely enter the middle class without also going through 2 years of preschool and 4 years of college. Who pays for the preschool and college? The family does.
For the average family (2 kids) that’s a total of 4 years of preschool (total: about $40,000 at a minimum) plus 8 years of college (total: about $160,000 for 4-year in-state plus room and board) for a grand total of at least $200,000 that the average family in 1970 didn’t have to spend to launch their kids into the same middle class lifestyle their parents enjoyed.
Add to that new financial burden the cost of a second car (for the second wage earner) and skyrocketing health care, and one thing is clear: the American Middle Class is an endangered species.
Monday 19 October 2009
The Coming Collapse of the Middle Class ☀
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