We're Better Off By Far

...Than Our Parents and Grandparents, Says Economist Brown. It's Just That We Don't Believe We Are.

by Amy Corral

Despite a growing sense of worry about the economy, Americans' standard of living has been rising steadily with the lowest wage earners benefiting most of all, according to Economics Professor Clair Brown.

The worry, said Brown, stems from the fact that Americans are placing too much emphasis on the luxuries in life, rather than on their long-term financial well-being.

Brown, director of the Institute of Industrial Relations, based her conclusion on years of research that have resulted in a new book, "American Standards of Living." While the book analyzed data between the years 1918 and 1988, Brown said her findings nevertheless apply to the current economic situation in the United States.

Brown defines "standard of living" as private consumption or consumer spending on goods and services.

"Even though Americans now own more goods and spend more freely than ever before in history, they are ingrained with a pervasive sense of economic insecurity," said Brown.

Brown believes that much of the dissatisfaction and worry Americans experience can be blamed on unrealistic expectations.

"Americans base their expectations on the 1950-1973 period, an era of phenomenal growth and change," Brown said. "But now, in order to meet these high expectations, Americans are increasingly making difficult compromises, such as lower savings or longer work hours."

"In 1918, working-class families spent 100 percent of their budgets on basics, like food, shelter and clothes," Brown continued. "In 1988, they spent 60 percent on basics and the remainder on 'variety' to make their lives more interesting and easier, or 'status' to distinguish themselves.

"Instead of comparing themselves with their parents, they now compare themselves with their bosses," she said. "Today, people at middle or lower income levels enjoy much lower food and clothing expenses than their grandparents. They face a less exhausting work day, and they take interesting vacations. They also enjoy a lot of high tech and convenience products."

Brown is convinced that the root of Americans' economic discontent has nothing to do with standard of living. Instead, it involves a more long-term issue: their quality of life.

"As jobs become less secure, as family savings decline and as promised retirement benefits appear slippery," Brown said, "families worry that they may not have sufficent income for a period of unemployment or retirement. It's the larger, long-term issues, such as the ability to accumulate life savings or educate your children that define quality of life--quality of life is not defined by how many vacations you take a year." Brown said that American politicians can take a leading role in soothing the insecurity of voters by switching their focus to improving quality of life.

"Recently, politicans and the media have focused on the declining standard of living as the major social issue, (when) in fact living standards have not declined," Brown said.

The circumstances go beyond partisan politics, Brown added.

"Families are more concerned about their economic security than about their tax burden. The first step toward improving security is for both families and government to increase their savings--as a country, the greatest threat to our long-run standard of living is our low savings rate," she said.

The second step, Brown concluded, is "to tackle the need for our children, who are our future workers, to be educated. Politicians who can address these security concerns stand to win big at the ballot box," she said.


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