Is it Harder in America Today?

A frequent commenter on FMF Old Limey wrote a the following comment on a reader profile of a young engineer PD where he commented how it seemed life is harder for a young engineer today then in was in the 60es.   There was one paragraph that really struck me:

>It seems to me that my journey from being a young engineer, first to retirement, and now after 20 years of retirement has been a lot smoother and easier that comparable couples in current times.

>I thought that in America life kept getting better every year but lately that doesn’t seem to be holding true. What’s happened?

I think you are correct that the path isn’t as smooth today.  There are some concrete reasons- the cost of higher education has been growing at far beyond inflation for many years.  I found the following graph  that shows that the cost of college education grew at 2.5X the inflation rate.   I suspect PD would not have any student loans if his college costs were 50% lower.

Today he is competing with engineers from all over the world- both those that come to the US with a work visa and those companies may outsource to thus depressing his wages.   I haven’t been able to find statistics on engineering salries between the sixties and today but my impression is that it isn’t readically different once you account for inflation.

Additionally our expectations have risen- according to this NPR article  that “small” house PD is living in would have been considered normal size for a family with a few kids in the 60es as the average home size has more than doubled since the 1950s.

>I thought that in America life kept getting better every year but lately that doesn’t seem to be holding true. What’s happened?

I think things are getting better, but not for everyone.  If you own a company the relatively lower wages and increased more competition for jobs is a great benefit.  Companies don’t have to take the risk of provide a pension- they let the employee take the responsibility and risks with their 401K plan.    With the advances in technology companies don’t need as many employees to do the same amount of work and can be more profitable.   If these trends continue – it won’t make economic sense for people to be employees even for previously “good” jobs like engineers. 

 

  -Rick Francis

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