Well, statistically at least, you are likely less well off than you were ten, twenty or thirty years ago. Basic costs like rent, medical insurance, education and transportation have been increasing much more quickly than wages for more than 20 years. Faced with rising costs and stagnant-to-falling earnings, people have had to either work more, do with less, or both. Not surprisingly, the average hours worked in the US has steadily increased over the last two decades. Also not surprisingly, other indicators of people struggling to make ends meet have also increased; bankruptcy rates are up, personal debt is way up, and stress and fatigue related illness is increasing. All of these problems are well documented and consistent with the struggles people face as they try to meet increasing costs with stagnant wages. Many books and piles of government statistics all confirm this general loss of wealth for many, many Americans.
Money, however, is of course not the only or even the most important measure of personal wealth. Less commented on than the decline in real earnings has been the loss of free time and the subsequent decline in community life. People are often drawn to the communal lives of rural villages in very poor countries. Despite the poverty, the sense of communal well-being seems attractive; a kind of luxury. The poverty and communalism there are inseparable. They all live better because they live communally. They would be much poorer if the communal system broke down.
Unfortunately, falling wages have coincided with a drop in the less concrete, though no less real, measures of personal wealth; time and community. In the US, we have been growing poorer and less communal simultaneously. If one examines only the statistical surface it looks like yes, well, many people are less well off. However, our simultaneous loss of time and community makes the situation that much worse. Consider our propensity for moving. The most recent census data shows that 40 million Americans move a year. In other words, the entire population of our country moves every seven years. Moves, besides being expensive, are time consuming and disruptive of community. One must find new friends, new places to socialize, and often leave family behind. For instance, if you are paying for childcare, you are more or less being billed for not living with grandparents, aunts, uncles, and close friends around. Over the last 30 years, whole networks of community and family relations have been disrupted as ever more people move ever greater distances apart.
Similarly, if you get grossly overcharged for work done on your car, it is very likely the result of not knowing who is a reliable, trustworthy mechanic. And what is the cost in time and effort of establishing a network of trusted friends? Our societal preference for continual movement imposes huge social costs onto individuals who are expected or encouraged to move constantly. This does not mean moving is wrong or does not make sense. Rather, we must recognize that our mobile society adds costs to our lives that exacerbate the already grim earnings picture.
Another trend effecting the cost of living is that fewer of us are living together all the time. Since 1970, census data show that the average number of people per household has fallen from 3.1 to 2.6. Now this may not seem like a lot, but it is a 17% drop. While some of this is due to a fall in the average number of children per family, much is also due to increased rates of divorce and the growing number of people who live alone. In every age group, the number of people living alone has increased substantially since 1970. This means fewer people with whom to share rent, utilities, and cable as well as fewer people to share time consuming tasks like cleaning, cooking, and laundry. This drives up the cost of living in terms of money and time and, obviously, impacts our participation in the community by restricting our social contacts. One can look to the rapid adoption of email as an attempt by people who feel isolated by both distance and living environments to reach out to a “virtual” community”.
Also increasing our sense of poverty is that many of us are working more hours than ever to bring home whatever wages we are able to make. Americans who work full-time now work around 1850 hours a year according to the Bureau of Labor Statistics. That is about 9 weeks more of work a year than the average European and about 200 hours more than we worked 20 years ago. So not only are our wages falling, but we have to work longer to earn them. This fact, perhaps more than the falling wages themselves, has had a huge impact on our sense of relative poverty. We are starved for time. Simultaneously, commute times have increased making the overall workday even longer. And while any one of us may have escaped increasing hours and longer commutes, our communities have not. People have less time for volunteering, participating in social events, and generally supporting the well being of the community. Again, both our available time and community suffer.
Overall, the bad news is that the earning trend seems unlikely to change any time soon. There are many strong pressures in the economy forcing wages down while few, if any, causing them to increase. Simultaneously health care costs, housing, and transportation all look to continue to increase much faster than any conceivable increase in wages.
The good news is that while there is little we can do individually about the increasing costs of health care, education, housing or falling wages, there is a lot we can do about time and community. First, don’t move unless you absolutely have to. Moving imposes financial and social costs that take years to recoup. It also imposes costs on those you are moving away from by undermining existing communities. Again, not all moves are “bad”. Conversely, if we moved overall less often our communities would be greatly strengthened. Second, live with other people. Sharing rent, utilities, and chores makes living cheaper. More importantly, it tends to make our daily lives more rich. Bad roommates are bad roommates and should not be tolerated, but living alone – the choice of millions of Americans – can be equally problematic. Third, invest in your community. A strong sense of community requires community participation. This takes an investment of time and energy, but the payoffs compared to dubious investments like the Stock Market are much greater.
If you are already doing some or all of these and still are still feeling the pinch – don’t despair. My guess is that soon we may well be forced to return to a greater degree of communal living as the demands on our time become insupportable and falling wages make alternative lifestyles ever more attractive. We might revert to communal living out of necessity and we might, just might, all be wealthier for having done so.