This is Why You Will Never Retire

Summary

The American Dream has become increasingly elusive as societal and economic structures shift. This script explores how factors like education, job stability, and housing costs have changed over decades, leading to a decline in the middle class and a future where retirement is uncertain. It discusses the impact of automation, offshoring, and wage stagnation on the workforce, and the challenges of adapting to an economy that seems to prioritize machines and profit over people.

Takeaways

• 🌐 The American Dream has become increasingly unattainable, with traditional markers of success like home ownership and a comfortable retirement becoming more elusive.
• 📚 A good education and hard work used to guarantee a stable life, but now even a college degree and experience may not secure a comfortable retirement.
• 🏦 The value of essential jobs has diminished over time, with wages for the same jobs like postal workers being a fraction of what they were decades ago.
• 💰 The cost of living, especially housing, has skyrocketed, making it harder for even well-paid workers to afford a home or save for retirement.
• 📈 The rise in college-educated workers has led to increased competition for a limited number of well-paying jobs, contributing to wage stagnation.
• 🔍 Companies now use automated systems to filter out job applicants, exacerbating the issue of needing experience to get a job but struggling to get experience.
• 🌍 Immigration and offshoring have increased the labor market supply, leading to lower wages and job security for workers.
• 🏢 Companies have become less invested in their employees, often valuing short-term profits over long-term employee retention and satisfaction.
• 📊 Productivity has continued to rise, but wages have not, leading to a disproportionate benefit to the top 1% of earners and fewer resources for the average worker.
• 🏠 The housing market has transformed from a basic need to an investment vehicle, with skyrocketing prices benefiting early investors but excluding younger generations from homeownership.
• 👴 Retirement is becoming a distant prospect as people are living paycheck to paycheck, with fewer resources to save and pensions that underperform market averages.

Q & A

What was the traditional formula for achieving the American Dream?

The traditional formula for achieving the American Dream was to get a good education and work hard at your job, which would provide enough income to support a family and ensure a comfortable retirement.

How has the concept of the American Dream changed over the past few decades?

Over the past few decades, the American Dream has been stripped away, with essential jobs no longer providing enough income to support a family or afford a home, and retirement becoming increasingly difficult to achieve.

What was the average salary of a US postal worker in 1974, and how did it compare to the cost of a home at that time?

In 1974, the average postal worker in the US made between $9,500 and $12,000 a year, not including additional benefits. The average home cost around $36,000, which was roughly 2.5 years of wages, making homeownership more attainable.

Why are essential jobs today not considered worth aiming for compared to the past?

Essential jobs today do not provide the same level of income and benefits as they did in the past, making it difficult to afford a home or save for retirement, and thus are not considered as desirable as they once were.

What is the current situation regarding college degrees and the job market?

A college degree is now the bare minimum to find a place in the dwindling middle class, but it does not guarantee success due to the high level of competition for a relatively small number of well-paying jobs and the burden of student debt.

How have companies' hiring practices changed, and what impact has this had on job seekers?

Companies now use automated systems to screen and reject most applications, leading to a situation where job seekers need experience to get a job but struggle to get experience without a job.

What factors have contributed to the increase in the number of people in the labor market?

Factors contributing to the increase in the labor market include immigration, both legal and illegal, and the offshoring of jobs by companies, which has led to increased competition for jobs and downward pressure on wages.

Why have companies become less focused on retaining employees?

Companies have become less focused on retaining employees due to the availability of a large labor pool, which reduces the need to invest in employee retention and allows them to prioritize cost-cutting measures.

How has the relationship between productivity and wages changed since 1973?

From 1948 to 1973, productivity and wages were in lockstep, both rising by about 90%. However, since 1973, productivity has continued to rise by 70%, while hourly wages for employees have only increased by 10%.

What has been the impact of the rise in house prices on retirement plans?

The rise in house prices has made homeownership a significant part of retirement plans, as those who bought homes decades ago can now sell or downsize for a profit, while those unable to buy a home face financial challenges in retirement.

What societal conditions are being created by the current economic situation, and what potential consequences might they have?

The current economic situation is creating conditions of financial insecurity and inequality, which can lead to anger, resentment, and a loss of faith in the system, potentially paving the way for societal unrest and the rise of extremist ideologies.

How is automation expected to impact the job market and retirement in the coming years?

Automation is expected to replace a significant number of jobs across various industries, potentially leading to economic displacement and challenges for those affected in securing their retirement.