A Facebook pal posted this thought:
The prudent man does not lower his debt by lowering his income. Rather, he lowers his debt, first, and is then free to lower his income.
Being the armchair futurist that I am, my response:
I advise people to lower income expectations and expenses for several reasons.
The trend since the late 80s has generally been one of income stagflation. Most folks did not notice it because inflation was low, products became more plentiful and ever cheaper, plus more families moved to a two income model. We also supplemented our lifestyles with putting more expensive purchases on longer term buys and we maximized our equity. That does not change the fact that real income has been sliding for decades.
Since 1998 the labor market in the USA has consistently declined in the total percentage of folks with jobs and/or benefits. More people have become commoditized. Many workers bring little actual value to their employers that cannot be replaced within a very short time period.
Throughout the 1990s we talked about doing more with less. We could and sometimes did. But there was little incentive to accelerate the process because profits were good and disruption to organizations usually caused a short-term drop in profits within 2-4 years after these morale busting changes.
The great crash of 2008 changed that. We were no longer worried about chaos from change. Change visited us quarter after quarter.
Organizational change now represented survival and hope for making up for the lost $$$ of 2008-early 2010. The Top 1% did lose big. But that change investment paid off, which is why income and investments of the Top 1% (and Top 10%) increased their take by almost 19% over the last 24 months.
In the end we have learned that we can do more with less … FAR LESS … the recent return of one of the largest textile plants in North Carolina did so by cutting their workforce from 2000 to just 140, without any cut in production quality or quantity. Quality actually increased.
We live in a commoditized society where few can justify some inherent $$ value if and when we find a way to do more for less … or even the same.
For the future, we need to be talking about much more than just doing yesterday better.
Sometimes we need rethink the meaning of what it all means. The answers are not going to come from the left or the right, or even from the squeemish middle hoping to eek out some kind of good deal. Times have changed. We need to jettison some of our pride and doctrines and admit that we need new answers — answers which may violate our own dear cherished principles which are often broken and fail to deliver on answers for the future.