(The cast of The Brady Bunch is shown in this 1975 AP file photo)
The work of Harvard law professor Elizabeth Warren indicates there is a coming collapse of the middle class. Warren compares the median American family of 1970 versus that of 2003. She unpacks why our savings rate has dropped to zero from a rather healthy 11 percent of take-home pay in 1970, even as the family added mom as a breadwinner.
She says that Americans are actually spending far less in inflation-adjusted dollars for things like clothes and food, including eating out, than they did in 1970. What has substantially changed, Warren reports, is the cost of big-ticket, fixed expenses.
Housing costs for a medium-size house… have increased 76 percent. Health insurance costs are up 74 percent. Also up sharply are taxes (due to the second income), child care and car-related expenses. Americans keep a car more than two years longer than they did 30 years ago, but they now need two cars to get to two jobs.
Are you better off now than your family was in the 1970s?