Western Prosperity has Dropped 350%
Why is the baby-boomer generation far more prosperous than the 25 to 30-year-olds of today?
I still teach part time, and was asked by my Engineering Masters class why the baby-boomer generation is far more prosperous than the 25 to 30-year-olds of today?
I immediately joked that it was because we had classic rock back then 😊 …..
But I promised to research and seriously get back to them!
At the next class here is what I told them…
Firstly class, you are correct, we were as under 30s in 1980 far more prosperous than you are at under 30 today.
We at age 30 in 1980 were undertaking our professional careers without any student debt. When we were students by working in the summer holidays and weekends we were able to earn enough to pay our very reasonable tuition fees. Also, we had plenty of jobs for us students, and we did not have massive amounts of low wage temporary foreign workers and foreign students that now work those far scarcer temporary jobs.
We were able to get married and settle down far earlier, as the cost of a 3-bedroom suburban house with a nice yard in a nice neighborhood was only twice a young professionals salary, so a first-time buyer down payment was easy to put together. Today its 7 or 8 times a single salary and rent is just as expensive.
Starting a family back then was easy as we were able to manage well on one salary with one parent staying home. Now both couples must work to stand any chance to own a home, and its harder to start a family with both working with more stress on the family environment, even if that is even a viable option.
The cost of a new car was affordable at 25% of the single salary, and today its between 75% to 100% of a single salary when you factor in the associated costs.
In the 1980s although interest rates were a lot higher than now, they were still affordable based on the costs already mentioned. Further these higher rates turned out to be an advantage as we could take the disposable income we still enjoyed after the above costs were covered and invest in a stable financial market for our futures with a significant return on our investment. And so many of us could start early investments for retirement. Also, we could pay down the loans for house and car by the time we were in our late 40s, if that was our choice.
So, the 4 biggest costs of Education, housing, car, and investments, were all much more affordable, and taxes back then allowed us to still have some disposable income remaining to enjoy our young lives.
Using these cost ratios, I calculate that the average difference in prosperity between me at 30 and my students at 30 shows a 350% decline in prosperity!
Then I explained why?
The western politicos in the early 1980s lost the plot by listening to the economists and elitists of the day and continuously supported a global free trade ideology. This started to hurt the delicate balance between labor and capital from about 1985 onwards. This has increased global trade and international migration of capital and people by at least 8 times since 1980. But average global wealth has only increased 3 times and has flatlined or trended negative in the western world. We were told that Global free trade would be a great universal wealth generator, but it has clearly been a nasty global wealth transfer machine from the west to the rest.
Due to this we have gone from balanced national economies with a proud and productive population that enjoyed the consumption of what they generated themselves, to being badly managed by national governments that due to the journey to globalization have lost the control of their economies.
We have been forced to become super consumers that are over-dependent for both products and services to emerging nations that continue to take full advantage of the global wealth transfer machine that keeps on building western national debt.
Our offshore imports rose while our once strong exports declined, with many manufacturing and related businesses going out of business as they were excluded from the global supply chains, that were driven into place by the politics of the day.
Our Canadian economy has been propped up by our resource sectors, which has not been able to fully offset the economic value lost in the higher value and once productive manufacturing and associated service sectors. It was far worse for western economies that did not have resource sectors to fall back on.
We also suffered from low general investment and low industrial capital re-investment with the only place for the banks to invest the capital being to “bloat-up” the housing market.
Due to all this our economy lost value through most of the 2000s and we saw national wages and productivity continuing to decline with many value adding jobs continuing to evaporate and being substituted for lower paying jobs mostly generated using taxpayer money that continues to just build national debt.
To compound the economic stupidity of globalization the western leadership has recently become dangerously excessive virtue signalers by hitching our western wealth to the climate emergency journey.
This has further destroyed any chance of a re-focus on recovering prosperity for us western citizens as we continue to follow the crazy notion of saving the planet!
My final suggestion to my class was…
Hi Nigel -- very well written and corect. I would add that you had the "fortitude" to describe it as you see it as being Canadian at the end - and your voting advise is "spot-on".
Here in the US - your only partially right - as I can't speak to any other nation.
As now an 80 year old great-great- grandfather - hefe in the US - what I have seen is something that you mentioned - but didn't talk about - the break down of the family as far as parenting, and the decline of it is concerned.
My mother, who stayed at home "raising my sister and I" in our earlier years - had to go back to work in her profession as a nurse - when my father's pay as a US ARMY Major could no longer support us with the rising costs of living really stated.
But my parents kept "raising us" as had centuries of parents before.
They didn't fall for the "new" way of raising children -- ie. becoming "friends" / loosening parental "guidance" / letting the children "decide what they would and would not do" etc.
Also -- and this is most important / my parents "enforced the family rules of decency and respect for elders, teachers, and leaders.
The result was over the years - that I witnessed the decentigration "in general" of the family unit here in the US at an accelerated rate - as the "divide" began between the "have's and the have-nots.
I don't know about Canada -- but as I grew up - I learned why - everyone wants too come to the US. They see it as the "land of opportunity" - to accomplish what others have done - a better life as far as financial prosperity and life from what they perceive that have in their home lands.
That has always been the mantra about the US -- "t's a better place".
But that "better place" you described, at least here in the US - has now been split apart by the very people that you talk about -- that were kids growing up 30 - 40 years ago -- because of one thing that they used - and the other - simple GREED.
What they used -- was "social media" - invented by them, formed by them - "for-them" - by their "leaders" who have constantly demonstrated their total disregard for centuries of "norms" and "established / acceptable behavior by children.
And this has all been allowed now by those generations of the "parents" of the children that "social media" has raised.
The reason that you have your poorer people taking those low paying jobs - at least here in the US) -is because most US born young people will take them -- they are too engrossed in following each other - or thier new social media icons - on social media / or trying to get into colleges that have to pay over-priced professors and administrators - to pay for multi-million college football coaches.
What I am saying is -- there is a lot that you said -that was correct.
But you totally left out the social upheaval that has occurred world-wide with the explosion of social media and it's means of communications - on everything.
It wasn't, and isn't;-- as "cut and dried" as you presented to your students.
Just a suggestion to think about.