There are two simple graphs which together brutally show the steady, slow erosion of the Standard of Living of middle class America. That occurred to me yesterday when I realized that even if there is ZERO percent inflation in the price of unleaded gasoline in the next year, what does that mean? It means that gasoline will sell for $4 a gallon for the entire next year! Those who have little choice but to drive to and from work, and to and from the grocery store (which is unfortunately the case in most any suburb that has been built in the last 25 years) will find that the Standard of Living they thought they had, went flying away. That's why it's worthwhile to post those two simple graphs again ....
(An extended version of this diary is published at The Economic Populist)
The first graph shows that the average American family hasn't had a raise since 1999, and in fact ever since then has brought home less income (inflation adjusted) than it did at the peak of the Clinton boom:
As others and I have pointed out before, this is the first economic expansion since the Great Depression in which the average American income has not improved.
While incomes have stagnated, spending for essentials (food, energy, medical care, housing) has skyrocketed, going up almost 10% of the median family's income:
These two above graphs taken together show the truth in all its blunt ugliness: America hasn't had a raise during the entire Bush/GOP malAdministration, but it's costs -- not for discretionary items, but for essentials -- have gone up nearly 10% as a percentage of its take home pay. As more and more income is being used to pay for food, medicine, housing, and energy consumption, Americans have had to cut back on those items which aren't necessary for living, but make what we have always been told was the "American way of life" enjoyable.
No further explanation is really necessary. The Standard of Living for the average American family really has declined in the last 8 years. No wonder 80% of Americans believe the country is on the wrong track: for them, it is!