Sunday, February 14, 2010

A Child of The Era of Changing Expectations

Recently my father and I were having a conversation in which he mentioned a local news story he had seen. He paraphrased the coverage and explained that the producers predicted that the recent economic downturn will create the first generation of North Americans whose living standards will be lower than their parents' material living standards. In other words, the home you make for your adult family will not be as nice as the one in which you grew up as a child. Until this point in U.S. history the name of the game has always been, to "give my kids more than what I had" or to "make it big." Now, however, we have seen the macro-effects of a country who got heady with their spending. It all popped. The housing bubble popped, people trying to outdo their parents by buying more were humbled by the crash of credit.

The economic shift hit everyone, not just the irresponsible spenders. I read several articles in our alumni magazine about how 30% of the most recent graduating class has accepted unpaid positions after graduation, 40% work for NGOs and scarcely any are headed to Wall Street. What a change! What a departure from the big days of Goldman Sachs hires and six figure 22 year-old salaries of just six years ago.

Our country has been collectively disappointed by the fleeting nature of material wealth, but I also find myself wondering about the micro-level of these changing expectations. What is going on inside each family, rather than in "the Sun Belt" or the "inner cities?" What is important to us as adults? When Dad mentioned that my generation would be "worse off" then our parents' generation, my mind immediately snapped to my immediate family. We fit the generalization. We provide "evidence" for this local news story's headline! My parents were both career naval officers. Yet, my husband and I are living on one Army officer's salary, we will have a much larger family and he does not intend to make a career of the military. There is little mystery in the world of government salaries. We don't get Christmas bonuses, nor unexpected promotions, it is all laid out in a little chart that gets approved every year on the floors of Congress. Therefore, it is fair to say that my family is living at 50% the standard of living of the home in which I grew up.

"But, wait," I thought, "no way, this news story is garbage. You can't measure my quality of life by the figures that plink into our online bank accounts on the 1st and 15th of every month!" Rather, I think there is something much more profound going on here. Could it be that some members of our generation have made the educated decision to live off less? Is it possible that some graduates of 2000 and beyond insulated ourselves from the economic depression by limiting our expenses before it was a national mandate. Our frugal spending is proactive rather than a reaction to the crisis of a job lost or a mortgage foreclosed. We spend only on necessities to teach our children the way to live rightly rather than shocking them with less spending because one parent lost a job that was needed to "make ends meet."

So, to that local news team that drummed up a story about our generation's "lesser expectations" by looking at lower starting salaries or lower family net-worths - I challenge you to look a little deeper. Perhaps there is a cultural shift going on here: led by children who were raised and educated to know what is important and who have, consequently, set out to live our lives with these much changed, not lowered, expectations.


Jane said...

Interesting topic. I'm a little older than you Builders (graduated in '88), so here's my view: I live in a house that is half the size of the one that I grew up in.

I grew up in an expensive area (Bergen County) which was a lot less expensive than Manhattan and somewhat less expensive than Westchester County way back when in the 60s when my parents fled NYC. But they were able to buy a new 4 bed split level on an acre in a nice town for like 35K, 40 some odd years ago. They raised 8 children, most of us went to the parochial school on my dad's teacher's salary. They were able to "upgrade" to a bigger house in the fancier part of town in the late 70s, and all eight of us graduated from college, which were paid for by my parents (with some help from inherited $ from grandparents). My tuition at a prominent Jesuit university in the mid 80s was 12K per year.

What has skyrocketed where I live is real estate, college tuition and property taxes. We pay close to 20K per year to live on a third of an acre, my son will be attending a private Catholic high school next year to the tune of 15K. And tuition at my alma mater is now 40K. So we won't be upgrading any time soon to a big house. But that's ok.

When I was 14 I used to babysit. I was paid the going rate of $2 per hour. Jeans at the Gap cost $40. So I would have to sit for 20 hours to make enough to buy myself jeans. When my children were little I had a regular sitter that I paid $12 per hour. Jeans at the Gap are still around $40 if you buy them on sale. Who pays full price for anything anymore?

Stuff that goes in the house is cheap, the house itself (where I live) is not. That is the big change in my life time.

Mary Alice said...

Jane, I think that you are right about the impact that the skyrocketing real estate costs had on your generation, and I wonder if things will be different for those of us who are slightly younger now that the bubble has popped.

I do know that my husband and I were totally priced out of real estate in New York City, where I grew up. On one income, we would be even if we did not have such a large family. It was a very sad realization for me, but as Awol said, we chose to leave rather than have me take a job or live up to our eyeballs in debt -- instead we are just up to our waists, but that is really because we had kids while in grad school.

B-Mama said...

I would say most humbling for us has been managing the grad school costs you mentioned, Mary Alice. My parents were NEVER in this much debt and it pains me that we have been forced to take it on in order to promote my husband's career. We don't abuse credit cards. We don't have car loans. We just went to school!

The fact that current education hikes outpace inflation is ridiculous. What irks me even more is that banks take advantage of students by offering rates much higher than should be allowable (even when the loan is backed by the government!). We currently have STAFFORD student loans that have higher interest rates than our home mortgage! All in the name of education!!!!!!

Right Said Red said...

I think when we talk about how we have "less" than our parents generation, it is important to keep in mind that we all have A LOT more than people in other countries. Our parents generation had it very well financially, so having to cut back a bit is probably a good thing. In addition, most of us see certain expenses as necessary, expenses that our parents generation never had (like a cell phone, internet connection, 150 cable stations, etc.). Even the "poor" in America are rich compared to those in other nations, so perspective here is really important.

Most of us have made a choice to live with less stuff (smaller house, one less car, etc) because we value other things more. Like AWOL, I think this is a good thing. But I think the point of the news story was that, in spite of these individual choices to have less stuff, overall, the spending power of Americans is less now than a generation ago, and from an economic perspective, this is troubling.

But because we are still so well off as a nation, we should keep this backward mobility in perspective.

Mary Alice said...

Good point Red. I also think that the definitions of less and more are always changing. I remember it was a huge, huge deal when we got a computer, for example, and that my parents decided that a laptop was too expensive for me college. Now in our house we do have two computers, two cell phones, one TV that is bigger than anything I could have imagined growing up, even though it is several years old.

Not that technology=standard of living, but just a few examples.

Kat said...

Interesting topic, AWOL, thanks for taking the time to write this post.

One thing that came immediately to mind for me was that my family took lots of trips growing up. We had family living in the States and in Germany, and we lived in different parts of the world, so we were always traveling as a family. We were able to take lots of great vacations and my parents were able to show us lots of different parts of the world. The difference is that the cost of plane travel and lodging in foreign countries was MUCH less than it is now, and the dollar was much stronger against all other currencies. This is not the case anymore. We will not be taking our children on the same types of vacations - we just took our first family vacation last summer, when my eldest was 5, to a beach in Florida. That's okay, but it's very different from how I grew up.

AWOL, as to your point that perhaps our generation is purposely living more frugally, I think that we might be talking about a very select segment of the population. I think that most people of our generation are living more frugally now because they are forced to do so. Many of us builders began our marriages living more frugally because we got married young and were open to having children from the start of our marriages. In our case, this meant that we never lived on two salaries - in fact, until a year ago one of us was in graduate school, and we had children the entire time.

Most of my friends are finding their new "standard of living" as of the past couple of years to be a big adjustment!

Young Mom said...

I hope thats what is happening! I just posted on living on less myself.

Anonymous said...

Am I the only one who has a standard of living higher than parents? I'm in my late 30's. My parents lived on less and did more investing in rental property than we are (we have none). I think my parents will have more in retirement than we will.

Our only debt is our house, but I feel in my neighborhood that status is unusual. Most everyone I know has new cars, takes nice vacations, and big credit card bills. I am happy to be unusual in that regard, but I know we need to do better with investments.

Jennifer Frey said...

No, DA, you are not the only one who has more than her parents; we do too! But I from a very solidly working class/blue collar background in the Midwest, so it's not too hard!

I think this was an interesting post. One thing that does pain me, again and again, is that I am more likely to meet secular people (namely, hipsters, artists, punks, writers, etc) who are actively seeking a life beyond material wealth than I am to meet a Christian (Catholic or otherwise) who seriously considers "materialism" to be a problem for them. Of course, many Christians will pay lip service to the idea, but they are just as likely to be caught up in the "lets see how much stuff/experiences/credentials we can get before we die" cycle as the next person.

So, while I wish I believed our generation had changed expectations (in the positive sense), I'm afraid that I personally don't see much evidence for that conclusion. At least, not among Christians! I live in a bohemian neighborhood in a city, so most of our neighbors are secular and pursuing non-standard careers. But I am constantly inspired by them to buy less, use less, and experience life more. I am rarely similarly challenged by my friends from Church.

Elena said...

I live in small town Ontario, Canada surrounded by rural people who are just making it. Life here is very different from life in the city. The drive to 'keep up' is not as strong and people seem to have much lower expectations than urbanites. Our community is an interesting one as it is composed of the original Polish and Irish settlers plus a large group of draft-dodgers, back-to-the-landers, genuine hippies and large Catholic families that picked up and headed to the country. (We also live near a thriving Catholic community (Madonna House) that embodies poverty. Many families have come to settle in the area in order to live a similar life.) The feel of this town is very 'earthy' and real. Consequently, I feel a good peer pressure to live on much less than I think that I need and to live a purposeful life that is connected to the land. I think that this is something that we see happening amongst a small group of young people today, but it is nothing new. My community bears witness to that. Also, my parents took a vow of poverty during the heady days of their engagement so it is not hard to have a higher standard of living than I had growing up! They had both come from well-to-do families but purposely chose to live very differently as a response to the Gospel. It was hard but it made me who I am today. And, I am thankful for their choice.

Mary Alice said...

I have been realizing recently, though, that most of my memories and ideas of family life are from when I was about 10 and up. Before that memories are more sentimental snapshots, but as I got older and my parents got more established in their careers I know that things got a bit easier for them.

We had our kids so young, and then put grad school on top of it, so we are bit behind financially, but there are 7 years between my oldest and youngest -- one will grow up with a junior associate as a dad and the other with a more established attorney, and there will be a big difference in the activities, vacations, etc. Already, we see the difference in the housing, as our oldest 4 shared a bedroom for a few years, but now we have enough room to divide the boys and girls.

I know that we builders (well I, anyway, approaching my tenth reunion) feel all grown up, but we are still very young, and the economy will do plenty more swinging around in our lifetime.

I do think that those of us who are among Catholic home schoolers with large families do see some significant financial restraint/sacrifice coming from our peers. It may just be a simple matter of who you happen to know.

Jennifer Frey said...

Just to be clear: I do know many Christians who show financial restraint and sacrifice right now, mostly due to this terrible economy. But what I don't see is a point of view that sees less stuff as, well, better, spiritually and otherwise (the sort of view I took AWOL to be putting forth). And here I speak anecdotally, and in broad generalities, but I really am struck by how "materialistic" the average Christian I meet is. And not just your "Joel Osteen" I have stuff because God really loves me, Christian, but just your average Christian, in any denomination, from any theological background. And I hope that changes, not just among those who "have to", but among those who could buy alot more but who choose not to, out of the recognition that, in the end, stuff isn't what matters, and the quality of one's life depends on a radically different measure. Jennifer over at conversion diary had a really excellent post about this awhile back, I think.

Mary Alice said...

Even in a good economy, the more children you have the less stuff you, and they are going to have, so I think that openness to life and material detachment go hand in hand.