If America Is Richer, Why Are Its Families So Much Less Secure?

I think it's even simpler than that: Americans are steeped with debt.

Want to go to college? Debt. Health care? Debt.

The thing is -- these are necessities of life. That's the key difference between the U.S. and Europe (or Canada). Two of the most important things for a person's life are also the most expensive.

Of course, you can add in our complete lack of public transportation (meaning you have to buy a car -- debt, and pay insurance), and you can see why there's a problem.

I'll have to find the article again, but someone sent me something a few months ago showing the relative 'disposable income' available to citizens in industrialized countries, and the U.S. wound up coming up last, despite our apparent 'wealth'. What's the point of saving tax money on health care if you have to spend $5,000 a year on it anyway (with insurance)? What's the point of saving tax money to pay for college education when you're stuck with a $15,000 a year tuition bill?

America is suppose to be the most richest and powerful nation in the world, but the glue that holds it together, the people, are torn apart by personal values and standards, imposed by religion and media. The problem is this. A countries power is defined by its military force and(correct me if I'm wrong) the amount of money it has. All the money belongs to the rich, and the rich are the small minority. So I think the general population is suffering while the rich get richer. I think this country is going to crumble, because eventually, things will get so bad for the general population, not all of the britney spears, mtv, and other pop culture in whole world will distract these people from the hypocrisy and shittyness that is happening to them. My opinion is that americas foundation is rotten and it needs to be changed. I'm currently playing the game(I think this ist he best route to change) to get more power in this country, and then when the times comes, I will try to change it, not run away.

Security really is the buzz word in America, isn't it?

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Original post by Lode Security really is the buzz word in America, isn't it?

you are now banned from making jokes

Here's some more from the article

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... Nowhere is the risk shift of the last quarter century more apparent than in the widening swings in working families' incomes. Although average family income adjusted for inflation has risen in recent decades, the path that most households have followed has hardly been a steady line upward — the historical norm for most of the post-World War II era. Instead, a growing number of families have found themselves caught on a financial roller coaster ride, with their annual incomes taking increasingly wild leaps and plunges over time. In the early 1970s, the inflation-adjusted incomes of most families in the middle of the economic spectrum bobbed up and down no more than about $6,500 a year, according to statistics generated by the Los Angeles Times in cooperation with researchers at several major universities. These days, those fluctuations have nearly doubled to as much as $13,500, the newspaper's analysis shows. This growing volatility — and the rising risk it signals — has cut a wide swath. It has touched families from the working poor to those, like the Fredos, near the top of the earnings pyramid. The shifting of risk, in other words, is proving to be a democratic phenomenon. The Times' analysis is based on the Panel Study of Income Dynamics, which is underwritten by the National Science Foundation and run by the University of Michigan. Unlike most economic measures, which involve taking snapshots of random samples of Americans at different times and comparing them, the panel study has followed the same 5,000 nationally representative families and their offshoots for nearly 40 years. As such, it is the most comprehensive publicly available record of family earnings and income in the world — and it goes a long way toward explaining why, even in the midst of a recovery such as the one underway, so many Americans feel so uncertain about their economic circumstances. In using income volatility to gauge risk, The Times is taking a page from the financial markets, where the chief measure of a stock's riskiness is how much its price bounces up and down compared with changes in a market measure such as the Standard & Poor's 500 index. And just as with the stock market, there can be a big payoff. Families in the economic middle saw their incomes, adjusted for inflation, climb by almost one-quarter to an average of nearly $50,000 between the early 1970s and the beginning of this decade, the newspaper's analysis shows. At the same time, middle-class families saw their average net worth grow 40% to $86,100 in the last decade alone, according to the Federal Reserve. The rewards near the top of the economic heap have been even greater. The average income of families in the upper 10% of earners nearly doubled in the last generation to $130,400. Their average net worth nearly doubled as well, according to the Fed, to $833,000. Free-market advocates cite these pocketbook advances as proof that the economy has been overhauled in the right way. "On the whole, we have moved toward a freer market, a more competitive economy and a richer one," said University of Chicago economist and Nobel laureate Gary S. Becker. "There has been a shift toward people taking more risk on themselves ... and the economy has gained for it." But there is another, less sanguine way to view what has unfolded. The more that a family's income fluctuates, the greater the chance it will be caught in a downdraft when a crisis — such as a layoff, divorce or illness — strikes. Then, it can be extremely tough to bounce back. Over the last three decades, working families have faced ever-changing — and, for the most part, increasingly more perilous — risk-reward bargains. During the 1970s, families in the economic middle enjoyed a comparatively favorable run. Although their incomes generally swung up or down as much as 16% a year, they ended each year an average of 2% ahead of where they began. The result by the decade's close was that the reward of extra annual income had more than covered the potential loss from a single year's sudden plunge. But the story during the 1980s and early 1990s was basically the reverse. The volatility of families' income nearly doubled to as much as 30% a year. But now, instead of growing amid all the ups and downs, average family income dropped at an annual rate of 0.3% in the 1980s and an even steeper 2.3% in the early '90s. The bottom line: more risk for less reward. Although volatility remained high in the late 1990s, with typical annual swings of as much as 27%, incomes finally began to grow again, improving families' odds of being able to get ahead. But the good times didn't last. Since 2000, incomes have reversed course and fallen about 1% a year, according to recently released census figures. In other words, things are back to the unattractive equation of more risk for less reward. ...

The U.S. is far from rich. You may find this link interesting. It's the U.S. national debt clock.

sounds about right since the rich have never paid their fairshare and since they control the politicians they will keep it that way until the next revolution anyways.
Also brainwashing the average joe on the street into thinking $15/hr is a decent wage like my brother don't help the "Poor" bastards any!

One in every five U.S. jobs pays less than a poverty-level wage for a family of four, according to a study by the nonpartisan Working Poor Families Project.

US is trying to be a pure marketing economy, with very conservative values. The state should not provide anything because the state will do it in the most expensive way. That's why you have to pay insurance instead. Private business is supposed to do it cheaper ... because of competition etc

The result of this is that ppl with little money can't afford insurance, so they drop it.

Europe are more "social democrats", where they try to have a pure marketing economy with a state that try to balance the "differences". This means they pay more tax, but get free hospitals, free education, etc etc.

The result is that everybody are covered with a minimum of benefits.

There are good and bad sides with both, but if you ask me, europe is better. And if you look at the UN (UNDP) list of the "best" countries, you find alot of european countries

"People who choose security over freedom, deserve neither" - Benjamin Franklin.

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Original post by Etnu Of course, you can add in our complete lack of public transportation (meaning you have to buy a car -- debt, and pay insurance), and you can see why there's a problem.

Is this true? Toronto has tons of public transport: trains, buses, subways, and streetcars. I thought most cities would be the same.

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Original post by Aaron71771 "People who choose security over freedom, deserve neither" - Benjamin Franklin.

It's "Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety." People aren't even sure if Franklin wrote that, so I presume he never backed it up. So we are stuck with a phrase that sounds nice -but is highly questionable.

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Original post by Tron3k I thought most cities would be the same.

Most *cities* are. There's excellent public transportation system in NYC (which still ends up costing quite a bit if you use it regularly). The problem is that most of America has been built in the post war era when gas was dirt cheap and cars were mass produced and available to every family. Urban planning picked up on the trend and the way most american towns are designed makes public transportation practically impossible to put in place. Most towns are spread over a huge area and pretty much *require* you to get a car. This is why America is so crazy about oil. Vast majority of neighborhoods has been built with cheap gas in mind, the moment gas becomes too expensive, most american families will start struggling (yes, most are struggling now).

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Original post by Aaron71771 "People who choose security over freedom, deserve neither" - Benjamin Franklin.

How far are we to take this idea, though? It's not a black & white issue. Are you advocating anarchy? The security we would sacrifice would be worth it in your opinion? What we need is a healthy balance between security and freedom. In fact, an increase in security in many ways gives us more freedom. A decrease in security can often times reduce freedom. Security and freedom are pretty close to being orthogonal.

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Original post by flangazor "Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety."

With that wording, yeah, it's a bit better, due to the addition of the words "essential" and "temporary".
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Original post by LessBread Where did they get it right

Living in the U.S. is very risky. Quite a few people I know (mostly 50+) have jobs that bring them a very comfortable income but are less than secure. If they lose these jobs tomorrow they are unlikely to find similar alternatives yet they have ~15 years to retirement and mortgages to pay off.

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Original post by LessBread and where did they get it wrong?

There's a set of jobs that anyone can fall back on. A safety net, if you will. Women can always become waitresses, babysitters or home attendants. Men can always work for small food delivery businesses, parcel delivery, etc. Both genders can work as cashiers or tellers. This way essentially every family can make around $2,000 a month in cash. The government will compensate with foodstamps (about $300?) and health insurance will be free (medicaid). Such families usually qualify for recuded rent housing. Not a very comfortable life, of course, but enough to eat, have a roof over one's head, buy all necessities and go on small vacations once in a while.

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Original post by CoffeeMug Quote: Original post by Tron3k I thought most cities would be the same. Most *cities* are. There's excellent public transportation system in NYC (which still ends up costing quite a bit if you use it regularly). The problem is that most of America has been built in the post war era when gas was dirt cheap and cars were mass produced and available to every family. Urban planning picked up on the trend and the way most american towns are designed makes public transportation practically impossible to put in place. Most towns are spread over a huge area and pretty much *require* you to get a car. This is why America is so crazy about oil. Vast majority of neighborhoods has been built with cheap gas in mind, the moment gas becomes too expensive, most american families will start struggling (yes, most are struggling now).

Ah! That's very illuminating. Thanks.

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Living in the U.S. is very risky. Quite a few people I know (mostly 50+) have jobs that bring them a very comfortable income but are less than secure. If they lose these jobs tomorrow they are unlikely to find similar alternatives yet they have ~15 years to retirement and mortgages to pay off.

Coffeemug,

While those 50+ people are living their comfortable lives they need to take responsibility for planning their own retirement and managing their own debt. Same goes for people on the "roller coaster" Lessbread's artilc described. When you are on the up swing, that is the time to save and plan, so when you are on the downswing you will be able to maintain your level of lifestyle. It's not my responsibility, or governments to make up for their lack of planning. Living in the U.S. is not risky, let alone "very risky". People need to take responsibility for their own financial wellbeing, their own health, and their own lifestyle.


Agony,

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How far are we to take this idea, though? It's not a black & white issue. Are you advocating anarchy? The security we would sacrifice would be worth it in your opinion? What we need is a healthy balance between security and freedom. In fact, an increase in security in many ways gives us more freedom. A decrease in security can often times reduce freedom. Security and freedom are pretty close to being orthogonal.

Oh I agree, the balance between freedom and security is a delicate one. I would think whan B.F. is saying would apply well to police rights, gun control, freedom of the press, civil liberties, all the big questions. I don't think anarchy is the answer, but haw many laws do we need protecting Americans from themselves? Freedom is never lost over night, it is a long process - a little here, a bit there - soon people realize they don't have much freedom left - the state has all the authority.

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Original post by Tron3k Ah! That's very illuminating. Thanks.

Actually, here's some math that may shed some more light on things. Note, I just thought of the numbers below so I can't back them up with sources but based on my experience, they're about right. I think that on average every working american drives about 50 miles a day (work, dropping off kids to school, shopping, etc.) Assuming your average car will do 25 miles per gallon (is that true?), that's two gallons a day, 60 gallons a month. That makes it about 120 gallons per family per month. If the price of a gallon is $2.00, an average family spends about $240 on gas each month. Now consider what happens if the price of gas doubles: each family will spend close to $500 a month on gas! Considering that an average family probably makes about $3,000 a year (possibly less, I think), every penny counts! Four bucks per gallon may be fine in europe, but if it happens here your average american family will *not* balance the checkbook each month. Make your own conclusions...

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Original post by Aaron71771 While those 50+ people are living their comfortable lives they need to take responsibility for planning their own retirement and managing their own debt.

When all bills are payed they probably have around $200-$300 a month left. That's about $4,000 a year. What can they *plan* with these money? Note, these people are probably mid-middle class, may be higher up, so most people make *less* than that. If they simply save this money, if they lose their jobs they'll zero their accounts in a few months. Should they invest? Even extremely low risk investments are *risky* and they bring practically no money when you're talking about such small sums. So how do you suggest they plan?

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Original post by Aaron71771 Same goes for people on the "roller coaster" Lessbread's artilc described. When you are on the up swing, that is the time to save and plan, so when you are on the downswing you will be able to maintain your level of lifestyle.

People don't make enough to plan. That's my point. Even if you save $4,000 a year, it will not be nearly enough if you lose your job.

Coffeemug,

When you said "comfortable income" I assumed that meant they had more the $77 per week of disposable income. ($4000/52 = $77).

Even so, a $1000 investment every year earning 5% annually (which is pretty poor) in interest will turn into $46,000ish in 25 years. Not enough to retire on by any means, but it makes the difference between having to work at Walmart as a cashier when your 75, or choosing to do so.