Uncategorized · February 26, 2023 0

Even Conservatives Know Our Economic System Makes A Quality Life Hard To Afford

Marty Levine

February 26, 2023

A few days ago, I wrote about the failure of our economic system. I wrote about how both the silent hand of the marketplace, revered by conservative thinkers, and the efforts of our government to ensure that individuals and families can afford to live a decent and secure life in this country had failed. Millions of people still struggle to pay for the basic elements of life and live under the pressure of imminent economic hardship.

One of the recurrent problems we seem to face is agreeing on what it costs to live a decent life. This is an important issue because it defines the struggle of the nature of the government safety net of programs designed to help those in struggling economically. Without a clear target for what it costs to live, even the arguments in Congress and state legislatures over minimum wage laws and other components of the safety net are fueled by the differences from the very low federal poverty guidelines and other economists’ estimates of actual costs faced for the basics of life.

So when I saw a few days ago that a conservative think tank, American Compass, which is in the business of “charting the course for conservative economics….to restore an economic consensus that emphasizes the importance of family, community, and industry to the nation’s liberty and prosperity,” had released a new study focused on this issue, I perked up. Just what would their experts tell us?

What struck me was American Compasses’ creation of what it calls The Cost-of-Thriving Index (COTI); this is a measure it feels is more indicative of the real cost of living because it “offers a better way to understand the challenge for working families…The Index measures the number of weeks a typical worker would need to work in a given year to earn enough income to cover the major costs for a family of four in the American middle class in that year: Food, Housing, Health Care, Transportation, and Higher Education.”Using this approach they found that “In 2022, COTI was 62.1 (that is weeks needed to meet the basic costs of a family of four). Costs totaled $75,732, while median weekly income for a man aged 25 or older working full-time was $1,219 ($63,388 per year)”. 

Interestingly, this conservative organization’s estimate does not vary significantly from the estimates that were developed by the more progressive Economic Policy Institute that I recently referenced (Am I Not My Brother’s Keeper?) “In my part of the world,  Cook County Illinois, the Economic Policy Institute’s cost of living estimator finds that, to reach that level, it takes a bit more than $89,000 a year. In Dayton, Ohio where my wife was raised, a family of four needs more than $75,000 to live. In the Bronx, the part of New York City where I grew up, that number exceeds $115,000. With average salaries not exceeding $70,000 it is not hard to see why so many are struggling to go beyond a paycheck-to-paycheck basis.” The American Compass survey found that a people are quite unhappy that this economic system that does not serve them well:

American Compass also concluded that  “Americans recognize that stagnating wages for typical workers, especially young men, are a major obstacle to middle-class prosperity. Among those expressing an opinion:

  • 68% agree that rising inequality is a big problem because some groups of Americans have seen major gains while others have been left behind.

“A typical worker’s income is no longer sufficient to reduce worries about affording essentials:

  • Parents with income of $40-60K are as likely to worry about affording health insurance, a home, a car, nutritious food, or college tuition as parents with income below $20K.
  • Most Americans say they wouldn’t mind relying on government to provide them with those things…”

And using their economic ruler they have charted how the last 40 years has not served most of us very well. “In 1985, COTI was 39.7. Costs totaled $17,586, while median weekly income for a man aged 25 or older working full-time was $443 ($23,036 per year). In 2022, COTI was 62.1. Costs totaled $75,732, while median weekly income for a man aged 25 or older working full-time was $1,219 ($63,388 per year). In other words, while the typical man working full-time in 1985 could support a family on 40 weeks of income and then still have income from roughly 20% of the year left to cover other expenses and save, a comparable man working full-time in 2022 would work the entire year and still come up ten weeks short.”

American Compass also reported out the most recent data from their Family Affordability Survey which gathered data from a sample of 1,000 respondents. They found that “American families, across parties and classes, broadly share a definition of the middle class and concern with how the economy has made middle-class life harder. While some economists have argued that economic growth has led to widespread gains in prosperity, Americans reject that view and recognize that trends like rising inequality, stagnating wages, and pressure for a household to have two incomes have all eroded the typical working family’s well-being and made middle-class security more difficult to attain.”

So here we have a conservative group and a liberal group agreeing that for us to ensure that all in our nation can afford a reasonable standard of living requires much more money than we might think if we are just focusing on the false target of the l National Poverty standard.

When working is no longer enough for people to live stably and comfortably, we should be able to agree we have a broken system. When we can document over decades that things for more and more of us have gotten harder, not easier, we should be able to agree that the current system is not working.

Well, perhaps I should change that last statement. This system has been working if you want an economy that allows a very small segment of our population to become richer and richer. Indeed, our nation has seen a growing concentration of wealth among the top .1% of the population over these decades while most of us have had to work longer to try to afford a modest lifestyle and the economic comfort that comes with it.

If we could agree that this system does not benefit most of us, and that it has been a system that has been built on a failed belief that just working harder and trying harder is the answer to economic security. The data tells us over and over again that this is just not so.

Only when the voices of the vast majority of our fellow citizens who are being left out of the wealth of the world’s richest nation recognize that it is in their self-interest to seize political power, and create a more equitable, humane economy will there be the hope of improvement? Only when the majority who do not have great wealth take control away from the wealthy will this picture change.