August 2, 2004
Being Rich (and poor) in America
The Business section of today's Times offers some interesting insights into the economic psyche of America, the richest country in the world. In case you haven't noticed, working and middle class people haven't been doing so well: over the last 20 years, inflation-adjusted wages have stayed flat for just about everybody except for men in the 95th earnings percentile, whose wages have grown by a third. And as we all know, fewer people than ever have health insurance through their employers: "The Kaiser Family Foundation, in a recent update on its survey of health care benefits, estimated that the percentage of full-time workers who participate in employee health insurance plans has declined to 56 percent in 2003 from 80 percent in 1990." The article also includes statements from a whole lot of working families who find it harder to make ends meet due to layoffs, medical bills, and child care problems. People who work in the public sector are delaying retirement to compensate for huge losses in invested retirement savings.
But you'll feel heartened to hear that high-income fields are paying better than ever. "Professionals in fields like accounting, engineering and architecture are particularly optimistic. 'I think things are getting a lot better,' said Connie Berry, an accountant who relaxed poolside on Thursday with her husband at the Wilderness resort. 'I just got a raise; my husband has gotten a lot of new clients. I think Bush is doing a great job.'" Great, Connie! Connie and her husband were interviewed while vacationing at the $200-a-day Wilderness resort, a moderately-priced water park/hotel that, in theory, should be in within the reach of many middle-class families.
The problem is, more and more families can't afford places like Wilderness Hotel and Golf Resort. One reason for this is growing personal debt. Families today are more likely to go into debt just to keep up with day-to-day expenses. Low interest rates have also encouraged spending: a man interviewed for the Times article, Donald Sokalezuk, is an accounts-payable supervisor at the University of Pennsylvania. "He said he used cheap loans to buy a new camper and a new truck. 'I probably have as much debt as I ever had, but I have a lot more stuff,' he said. He did grumble that health care costs had greatly outpaced any pay increases in recent years." Exploitative changes in the credit card industry in recent years have contributed to our growing debt.
But credit card late fees and lower monthly minimum payment rates alone aren't driving people into debt. We have to spend our money irresponsibly in order to get ourselves seriously in the hole. And what better way to encourage people to live beyond their means than to make them feel poor and deprived? Enter a brand new batch of shopping magazines! Lucky will be joined by Shop Etc., and the boys will have both Cargo and the new Vitals to show them how to shop more. Lucky, "the magazine about shopping," will soon have one million paying readers; advertisers love this, because the content of the magazine is nearly indistinguishable from the ads. A director at an advertising firm says about shopping magazines, "They are offering advertisers a much shorter distance between message and purchase, which is highly attractive." Conspicuous consumption of goods like clothes, shoes, makeup, appliances, and home decorations is being pushed not only by advertisers, but also by supposedly neutral journalists and editors. Spend spend spend, America!
In case you also need guidance in how to purchase big-ticket items, Donald Trump has thoughtfully planned to launch his own magazine, Trump World. His editor says "the magazine would feature Mr. Trump's business and real-estate advice, as well as helpful hints on spending the riches that result."