Real economic conditions are stagnating or deteriorating for most most of our country’s population. Life expectancy has declined in the United States since 2014, and the downward trend accelerated sharply amid the COVID-19 pandemic. The United States currently has a lower life expectancy than Chile, Turkey, and China. Adjusting for inflation, hourly wages declined in 2020 and 2021, and have been essentially stagnant for six decades. Typical American workers receive no more compensation for their effort than they they did a generation ago, despite massive improvements in productivity, technology, and nominal economic output. The price of key essential expenditures, especially healthcare, housing, and education have increased far more rapidly than average wages. Drug overdoses, a decreased labor participation rate, higher numbers of people in their 20s living with their parents, and increased crime rates further reflect the overall decline in material conditions. For the first time in our nation’s history, the current generation of young adults is statistically likely to live shorter, poorer lives than their parents.
Reasonable people may disagree about the fundamental causes of deteriorating average economic conditions in the United States. Corporate consolidation, globalized labor markets, the decline of unions, automation, increased competition over natural resources, government inefficiency, and the financilization of the economy may all play roles. However, no reasonable and well-informed observer can deny the trend of increased economic hardship for the average American.
Regional, occupational, and class divides conceal the reality of overall worsening economic conditions from many Americans. The wealthy and (most of) the upper-middle class – the very individuals who happen to be the Americans with the most political and cultural influence – are richer than ever before. Furthermore, income and life expectancy vary enormously by profession, neighborhood, and ancestry.
The most extreme outliers for material hardship in the United States tend to be rural Native American communities, the poorest of which have life expectancies roughly equivalent to the national average in Somalia. However, even within the same region, figures diverge enormously. In 2018, a 10-mile divide between neighborhoods in the Washington DC area corresponded with an over three decade decline in average life expectancy. Native Americans and African Americans have the overall lowest life expectancies, while Asians and Hispanics have slightly higher life expectancies than the white majority. Overall, life expectancy tends to track with socioeconomic opportunity. West Virginia, one of the whitest states in the union, and Mississippi, the state with the highest proportion of African Americans, have the lowest life expectancy of all US states. The two states also rank dead last in terms of per capita income.
Our reigning political and economic systems have not only failed to continuously improve the standard of living for the average Americans, but they also obscure the extremely inconvenient reality of declining conditions. Individual and institutional bias accounts for some of the ignorance. Politicians and corporate leaders tend to come from relatively wealthy and well-educated backgrounds. Nearly all of them own comfortable homes in safe and prosperous neighborhoods. So do their friends and family. To a large degree, they are simply unaware of the decline in the standard of living experienced by their less fortunate compatriots. Even if they are aware, they certainty have no interest in highlighting the issue.
Corporations and advertiser-funded mass media want to encourage consumers to spend more money and have every reason to refrain from spreading economic fear among the masses. Popular entertainment, even when not focused on the lives of the rich and famous, usually doesn't dwell on depressing narratives of financial struggle. Neither of the two parties in our ruling duopoly have any interest in fundamentally addressing our diminishing prosperity, though they will blame their rivals for general economic woe. Elected politicians, are generally wealthy themselves (if not before they enter politics, then almost always after they win an election). They are also entirely beholden to the interests of large corporations and billionaire donors if they wish to remain in power.
Monetary inflation, the gradual pace of overall decline, and cultural norms further conceal the harsh realities of economic decay. In dollar terms, wages and income are at record highs; however, rising prices and the decline in the dollar’s purchasing power means that effectively incomes are declining. Additionally, the (as of yet) slow speed at which material conditions for “the average American” have deteriorated make the change difficult to notice for many people. We also have a broad cultural aversion to acknowledging poverty. Society incentivizes displaying wealth and downplaying poverty. Many people who are suffering from material want hide their economic struggles from others. There is also a common American (and broadly “Western” or “modern”) faith in Progress – the belief that humanity is constantly advancing, and that overall conditions will continuously improve in spite of temporary setbacks. This belief means that large segments of our population experience extreme psychological resistance to even recognizing the possibility of a broad and sustained decrease in real material conditions. If the first step in dealing with a problem is acknowledging is existence, then tackling the decline in quality of life experienced by most Americans is nearly impossible under the current system.
Structural imbalances and disfunction will likely cause more Americans to experience deeper and faster economic pain in the coming years. As of 2022, the US government debt-to-GDP ratio is the highest it has been since World War Two, while inflation is the fastest it has been in over four decades. If one could somehow capture and spend the entire annual economic activity of the United States, it would still be insufficient to pay off the debt of the Federal government. Corporations, families, state and local governments are also deep in the red. If interest rates rise significantly, various branches of the government (along with companies and consumers) will be forced by their tremendous debt burdens to pay more in interest, stifling other spending. If interest rates don’t rise enough, inflation may get truly out of control. Potential challenges to the US Dollar’s position as the world’s reverse currency of choice lurk on the horizon, as foreign governments fear the impact of possible US sanctions and seek to diversify their holdings. The US exchanges its dollars for massive quantities of imports from abroad; any weakening of the dollar’s favored status could drastically disrupt the economic and financial system. Short-term planning by officials focused on the next election cycle, and corporate boards worried about quarterly reports, have caused structural economic problems to intensify. Perhaps the proverbial can of economic reckoning will be further kicked down the road, but at some point a volatile mix comprised of decades of inefficiencies and waste will combust.
Long-term economic decay is a major threat to any political system. If people do not believe their own lives are improving, they lose faith in their government. Populations tend to put up with various injustices, indignities, and wrongdoings so long as their own material conditions improve, or at least so long as their standards of living can be maintained at a reasonably comfortable level. Widespread economic malaise is linked with nearly all upheavals resulting in the collapse of various governments. The French and Russian revolutions, the Arab Spring, and the collapse of the USSR had various causes and triggers, but they were all preceded by a marked increased material hardship. As economic conditions deteriorate at an increasing rate for a growing number of Americans systemic collapse becomes increasingly likely.
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