Woot! Economics Lecture

Elizabeth Warren (a kick ass Harvard Law Prof with a big fancy ass named chair) on “The Coming Collapse of the Middle Class”. The lecture starts after 4:45 of academic blah, blah, and back patting…

My lame ass summary (just watch the video – but it’s an hour long)…

Really interesting talk looking at economic data for the American family between the 70’s and now (2006). Savings dropped from 11% to -1% (debt), prices for major consumables (clothes, food, etc.) have dropped, income for males (adjusted for inflation) went up $800.

So – where are we spending all this money? Housing has raised 76% (100% if you want a good school district). Health Insurance, up 74%. Child care, up 100% (didn’t use to exist). Taxes, up 25%.

She then goes on to show that (inflation adjusted) the 70’s family made $32K (one parent working) and spent 50% of that “living”. The 2000’s family makes $62K (both parents now working) but spend 75% on living. So, you’re poorer and, worse, neither of you can loose their job and your risk of loosing your job is 20% higher by 2000 (i.e. who do you know who has a 30 year career job these days?). You also can no longer have any sickness in your (extended and immediate) family – or someone looses their job becoming a care giver.

Other interesting bits…. If you’re single – you’re competing for resources only couples can afford. And, in the 70’s you could make $32K (the average) with a high school degree, these days you need a college degree (cha-ching). Guess what this leads to – a lot of uneducated people and, if you are educated, you’re in massive debt.

Where does her Law Prof career fit into this? Bankruptcy filings are going up fast! More kids will have parents who file for bankruptcy than file for divorce (I’m lucky, I got to experience both, bankruptcy twice).

It’d be really interesting to see these stats for other regions of the world (especially the EU).

Found on Economists View