There is a stark disconnect between what the economic figures show on improving living standards and what most Americans feel. On paper, wages and household incomes are higher than ever, adjusted for inflation. The median family has 40 percent more purchasing power than it did four decades ago. Yet such statistics are cold comfort to the majority of Americans who think they are falling behind.
One problem is that human beings are exceptional at adapting to changed living standards as the new normal. Larger homes, nicer cars, more plentiful food, new technologies — they all become part of families’ mental baseline, especially when everyone around them enjoys the same. But Americans may also suffer from disguised increases in living standards — changes in behavior that make it seem like labor and consumption aren’t matching up as they used to.
I recently rewatched Fast Times at Ridgemont High, the 1982 classic about the mundane absurdities of teenage life. Having been a teenager myself just a few years ago, what struck me immediately was that darn near everyone in the film has an after-school job. Surfer dude Jeff Spicoli is the odd man out. When asked why he doesn’t want to make money, he replies, “All I need are some tasty waves, a cool buzz, and I’m fine.” All the other kids have to work to finance their diets of fast food and movie tickets. Social life revolves around the mall where teens hang out, yes, but mostly work.
Times have changed. In 1982, around 55 percent of teenagers aged 16–19 were in the labor force, either working or looking for jobs. Today, only 35 percent of teenagers can say the same. Jeff Spicoli is no longer the weird one for staying home.
Far fewer teenagers are earning income, but it’s not as though their consumption has fallen off. They still buy hamburgers and movie tickets, but also video games, concert tickets, designer clothes, and fancy coffee drinks that cost way too much. How can they afford to consume like this? Mostly, kids spend out of their parents’ incomes.
The hallmark of middle-class teenage life is no longer a part-time job, but a piece of plastic. Forty percent of American teenagers have a debit card, and 19 percent have a credit card as an authorized user on a parent’s account. Countless more rely on their parents’ debit or credit cards as unauthorized users. Many more families can now afford to consume more overall on fewer incomes.
That shift represents a major increase in formal living standards. For working adults, however, it feels like a downgrade. Income they would have consumed themselves 40 years ago now goes to subsidize their children. They receive nothing for the money that gets sucked out of their bank accounts every month. Young people, meanwhile, are set to be disappointed when they enter the real world and find they don’t have as much spending money on an entry-level income as they did when living off higher-paid professionals.
It may be marginally harder for teens to find jobs than in the past, but most choose not to work . . . they don’t have to. They can enjoy the fruits of rising productivity without participating in it. Those who put in the hours that pay for kids’ streaming services and cell phone bills — the parents — are left wondering where all their money went.