11/9/2010 4:19 PM ET|
Getting ahead? You only think so
We deny it, but even college-educated Americans -- at least those under 55 -- can't duplicate their parents' prosperity. Here's how we hide this reality from ourselves.
That nagging worry that you're not really getting ahead? It's right on. You're not. Especially if you're under 55.
She's the editorial director of New Strategist Publications, a former editor-in-chief of American Demographics magazine and the author of several books on demographic trends.
American incomes have been eroding for years, she says.
The reasons are familiar: "Computers, and then the Internet, have profoundly changed every industry. It is leveling incomes in the United States, because companies can go anywhere for many types of workers."
Manufacturing jobs, once the source of decent wages for people without college degrees, are no longer the bedrock of the economy.
Russell drills deep into U.S. census data for a look at what's going on.
The big picture, she says, makes it appear that we're just treading water economically: Between 1989 and 2009, all American households together gained just 3% in income, after adjusting for inflation. In essence, incomes have stood still for 20 years.
But the big picture is deceptive. It would look much worse except that the massive baby boom generation (born 1946 through 1964) is now in its peak earning years.
The big boomer salaries inflate the average.
The reality, however, is in your own wallet.
Many age groups are losing ground compared with their parents at the same age. The group of people in their peak earning years -- 45 to 54 -- lost more than 7% in household inflation-adjusted income between 1989 and 2009.
|Income over the past 2 decades|
|All house-holds||Head of household under 25||Head of household 25-34||Head of household 35-44||Head of household 45-54||Head of household 55-64||Head of household 65+|
|Sources: Cheryl Russell; U.S. Census Bureau (adjusted for inflation)|
Women are an additional wild card in these studies. "If you look at women's incomes you're going to say, 'Wow, big progress,'" Russell says. But that's not because they're paid better for the same work. It's because they got more education and got into better jobs, with bigger salaries.
"They were no longer stuck in the secretary pool," Russell says.
Women's new affluence, along with boomers' earnings, skew the statistics. If not for these aberrations, the erosion in household income would look considerably worse, Russell says.
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