Part 2 How do people cope with so many changes taking place in such a short period?

Part 2 How do people cope with so many changes taking place in such a short period? 

First, wage-workers dealt with the end of rising wages by adding women and other family workers to the paid labor force, and they worked more hours per year. Between the 1970s and today, the average number of hours worked per year by a U.S. citizen rose by about 20 percent. We worked 20 percent more hours on the job than we did thirty years ago. By comparison, for example, if you look at France, Germany, and Italy, over the same period, the average number of hours worked by their paid labor force dropped by 20%. 

Second, if working longer hours and more members of the family working didn’t solve the problem, what was the second thing that the U.S. working class did to cope with the end of the rising wages? The U.S. working class, starting in the 1970s, went on borrowing binges that no other working class in any country at any time in the history of the human race ever did before. 

Americans started borrowing. They borrowed against their homes. Keep in mind that the crisis exploded around something called a mortgage – the subprime mortgage. The U.S. working class could never have increased its consumption simply by borrowing against a home. They didn’t have enough wealth to get loans. Banks had to invent ways to lend massive amounts of money to the American people who had no collateral at all. 

 Credit cards offered a mechanism to allow banks to lend to the working class with no collateral. It is unsecured debt in economic terms. No lenders will lend to a borrower without collateral unless there is something in it for the bank to take that risk. 

The answer is the rate of interest. The average rate of interest on a credit card today 18% per year. That’s why there are credit cards. The American working class received loans, hundreds of billions of dollars in unsecured credit, to allow the rise in consumption. And the American working class went for it. 

Borrowing money on an unsecured loan solved a problem of where the consumer can get the money to consume.

Now, a working class, exhausted by the amount of work it does, with a collapsing personal life, experience strains and stresses. With several members of the family working, some children needing expensive child care, anxiety builds. 

This is a population that has reached the limits. It cannot carry more debt, and it can’t do more work. Therefore this is not a temporary problem. 


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Comment by Kelly on November 28, 2016 at 1:29pm

I have listened closely to the people around me to complain about not having enough money.

"The boss won't give me a raise. The economy crash because of other people and the credit card company lowered my limit. Food prices are rising too fast. I can't catch a break, I have bad luck."

Then I realize they have so many expenses, especially on non-essentials. I think it's harder for these folks to pull back and do with a little less than before. They deserve what they have because they "worked for everything" so how dare I suggest restraint. Pointing the blame on illegals or welfare recipients draining tax dollars is much easier than pointing the finger back at themselves.

Living on a budget isn't fun for sure. We want it, we get it. I don't think most of us actually save up for something, rather charge it and suffer later. I agree with your statement that we've reached our limit. We need a cultural shift: learn to pull back a bit, plan for the future, and realize how wonderful our lives are rather needing to consume more stuff to be happy.

“The things you own end up owning you. It's only after you lose everything that you're free to do anything.”

Chuck Palahniuk, Fight Club

Comment by Sigh on November 23, 2016 at 10:30am
Because, you know, if only people would KNOW exactly what's going on, that would totally make the problems go away, right?
Seriously though, I can sympathize with "ignorance is bliss". It's not like we tiny average citizens can do anything about the workings of the world and the economy anyway. Or are we all supposed to "just work harder"?
Comment by Joan Denoo on November 23, 2016 at 3:02am

Exactly! The prey are too busy watching nonsense programming and news on commercial TV,  and keeping track of the Kardashians. 

Comment by tom sarbeck on November 23, 2016 at 12:13am
Joan, from the story so far I'm concluding that a form of narural selection has begun. The prey have stopped paying attention to what their predators were doing.



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