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American Standards of Living:1918-1988

A Final Evaluation

The question that engendered this inquiry remains: Why are Americans driven to seek an ever-higher material standard of living, instead of a more leisurely life style and a higher quality of life? Although the complete answer should also include the political, cultural, and social forces at work, the analysis presented here allows us to discuss the economic basis for this behavior. Several economic dimensions appear to be important.

  • Fulfillment of basics by the great majority of the US population has generated and justified public competition for consumption of variety and status. Rather than reducing the drive to use goods and services to create economic distance, affluence has intensified the desire to distinguish oneself by status and to buy an ever more varied set of consumption bundles.
  • Economic growth has added to basic consumption in two ways: First, consumption that supports complex economic and social transactions has increased, for example, the need for car transportation , for telephone services, for banking services, and for cable television. With the development of computer and interactive multimedia for information dissemination and for financial and knowledge transactions, the basic requirement for taking part in such transactions will change dramatically and will necessitate purchase of the requisitecommodities.
  • Innovation has become increasingly important in the latter part of the twentieth century as introduction of new goods and services has speeded up. Family incomes have not grown sufficiently to allow both innovation and emulation of traditional consumption norms. Consumers have opted for innovation at the expense of traditional emulation, and this disruption of consumption norms seems to cause families to undervalue the improvements made in their standard of living.
  • The American perception that the period 1950-73 should serve as a benchmark for judging the future has resulted in unrealistic expectations. This period was extraordinary in the improvements achieved in living standards across classes. Unrealistic,unmet expectations have supported the quest to improve material standards of living ever since.
  • Social welfare programs set up for those at the bottom of the income distribution dramatically diminished the economic distance between the lower working classand those receiving welfare. The shorter distance increased class conflict and undermined public support for welfare programs, as the lower working class feltthreatened by a closing of the economic distance between themselves and the poor.

The strength of these economic forces in the United States should not be underestimated. In the past two decades, wages have stagnated, but American families have maintained or improved living standards by increasing total paid work hours and by reducing savings.Neither of these techniques is without a hidden cost to the family and neither can be sustained as a method to improve living standards. Continued wage stagnation will eventually translate into stagnation of living standards.

In the absence of a major transformation of social values, our class conflicts over income and what it buys can be expected to intensify. Instead of a diminished materialistic drive, we might experience an even more dedicated quest for an ever higher standard of living. Americans will no doubt remain focused on acquiring private goods to impart status, rather than directing our nation’s resources to resolve social problems - even as these problems undermine our own quality of life.

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