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FROM the EDITORS: Among economists talk about the inevitability of the second wave of the economic crisis in the US has already become common place. Disputes about is when it will begin a new fall of the markets. Meanwhile, a much greater strategic problem for the United States is the erosion of the middle class, which was based on economic and political stability of the country. There are five reasons for the disappearance of the ‘ Foundation of American society.
It may indeed seem incredible. But the banking statistics do not lie. And she reports that among Americans with an annual income of 75 thousand dollars. — but this is heavily upper middle figure for the United States — every third difficult to make ends meet. Practically lives from paycheck to paycheck and don’t have any decent savings. Other data show, by the way, that three out of every four Americans in the savings account in the Bank and not $ 1,000. reserve for a rainy day.
But how can this be in one of the richest countries in the world? And why even a large income don’t bring in American family financial stability?
Of course, it is possible to talk about a very different culture of savings. USA — the country’s stock market, the main investments of Americans are in stocks bonds. And years ultra-low rates are taking their toll: on savings accounts is usually stored any spare change for unexpected expenses. But there are other reasons, of which we can extract the real lessons.
First. Neglect of personal Finance. Whether on ignorance, whether from overconfidence, but in the country — financial leader many people do not understand the basics. No doubt, they know about mortgages, compound interest, mutual funds and so on. But I can’t imagine many things in practice — why you need a personal budget, how should the plan costs, what is a reasonable balance between investment and consumption.
Moreover, a significant percentage of wealthy Americans have little idea where their money goes and why by the end of the month from the higher salaries there is nothing left. Perhaps this is the flip side of confidence in the future. But she, pardon the pun, turns against the middle class.
Second. The lack of understanding of their priorities and goals, especially long-term. Here you do not want to moralistically, but it is necessary. People — like children. Can’t see beyond their own noses. At least the majority. That’s why many of those who are in principle not against to invest and save, all the time delaying it for later with another toy for momentary happiness. Succumbing to such impulses, they drop all their money on pleasure, on personal consumerism. Then, some regret. And some are comforted by the fact that at least well-lived. But with every further year of life is scarce, this argument runs worse and worse.
Third. A contest with the Joneses. It is generally an American classic. Constant competition with the neighbours, whose way of life cooler. Who’s lawn is greener, building more and more prestigious car. The desire to jump over your head in costs drives straight into a financial hole. Of course, the cult of success, the flip side of it. And for some reason very few people think — and I really need it?
Fourth. Blindly following bad advice. Many believe that a big house is an asset. And that a University degree is an asset. And even that investment in your own appearance is an asset. As a result, mortgage debt, student loans and credit card debt eats all revenues. Practice shows, incidentally, that getting into debt is easy, but to get out of them is very difficult. And not coincidentally, they are experts on personal Finance is recommended to keep housing costs at 20% of your income instead of 30%, which banks use to calculate mortgage. Russian 50% against this background, — generally step to debt bondage.
Fifth. The desire to get rich very quickly. Too many people looking for a quick and easy way to riches, led by the idea that it is possible to come to the extraordinary richness of a jerk. They eagerly rush to invest in hot stocks or in a promising business idea.
Make big bets and go, of course. Unfortunately, money almost never work this way. Many see as the rich increase their fortunes a good investment, but almost no one notices the work behind it is.
Of course, it’s not all the reasons why the American middle class is eroded. Only experts on personal Finance their account for a few dozens, and macroeconomists will add your.
At the macro level such harmful financial habits, eroding the share of the middle class in the United States, are alarming. Yes, a significant proportion of its members go into the top class, and only a few sink to the bottom. However, the middle class and its consumption patterns provide the necessary stability in society. That’s why politicians try to keep it.
Smashing the stereotypes
Your big house, big happy family, at least three children. Approximately at the household level, sounds of the Great American dream. It is more prosaic than the source of the term, The Epic of America: a country where every human life is better, richer and fuller than its predecessors; where everyone will have the opportunity to get what he deserves.
Echoes of this stereotype about the dream is still easily identified by sociologists. For example, few Americans want to have only one child, only two, and better three. So the polls say.
The ideal number of children in the family. 2016
And what we say is not opinion statistics, and the statistics fact? In fact, the number of large families in the United States is declining rapidly, while the number of small families and childless women is increasing.
The number of children in American families. 2016
However, even to maintain a tolerable standard of living in families with fewer children, Americans have to work more and more. Among couples aged 25 to 54 years the number of working hours increased by 20% between 1969 and 2010: from 56 hours to 67 hours (taken into account the working time of husband and wife together).
Why is this happening? On the one hand, real wages in the US for 30 years how do not grow. On the other, affected by the stereotypes of consumer society. Yes, economists predicted that as the country becomes more prosperous, people will work fewer hours. This did not happen. And all the gains from productivity growth go to higher and higher levels of consumption. Become more at home, in the homes of more and more electronic gadgets, and in garages — more cars. And so on.
With the growth of wealth, people are buying more and more things. But they have less and less time to enjoy shopping. The same applies to children. To raise a child in a family with an average income in 2013 from birth to 17 years, will cost 245 $ 340 thousand. And this is a low estimate. It turns out that kids also need more and more — clothes, toys, furniture, shoes, gadgets, teachers, knowledge, workshops etc. Otherwise how to live a better life than the previous generation?
Think society of Hyper-consumption is coming to its logical end: it will begin to grow old and die.
