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Living Standards

Sharpening reading skills. | B. On a personal note | The Basic Principles of Capitalism | Stocks and Bonds | The Cashless Society | Recent Trends in Business | Building your vocabulary | Understanding idioms and expressions | B. On a personal note | The Role of Labor Unions |


For most Americans, Labor Day is an occasion to count their blessings. The U.S. is a prosperous nation. Its unemployment rate (about 4%) is extremely low. Americans earn­ing the median annual household income (about $41,000) or more can live comfortably, own a car, and buy appliances that save work and provide entertainment. Yet many peo­ple are dissatisfied with their earnings and their standard of living. Among those dis­satisfied are the poor, some members of the middle class, and some women.

Who's poor in the prosperous U.S.A.? Nearly 12% of the population, according to 1999 statistics. (In that year, the U.S. government set the poverty level at $17,000 for a family of four.) Most poor Americans fall into one or more of these categories: the elderly re­tired, the physically or mentally ill. unskilled workers, the uneducated, the unemployed, single parents, children, and minorities. In 1999, those living in poverty included 17% of all American children and roughly 23% of African-Americans and Hispanics. Although the percentage of people living in poverty decreased from 1979 to 1999, the figure is still high. What can be done? More job training is needed so that unskilled workers can de­velop marketable skills. Also, many people feel that it would help to raise the minimum wage (the lowest hourly rate that most employers are allowed to pay employees). A fam­ily of three or four living on one person's minimum wage salary is quite poor.

The American middle class also has some discontented members. In the 1990s, the U.S. economy was booming, the stock market zoomed upward, and the rich got richer. Between 1992 and 1997, the number of Americans earning over $1 million a year more than doubled (from about 67,000 to about 142,000.) From 1994 to 2000, the number of households with a net worth of more than $1 million jumped from 3.5 million to 7.1 mil­lion. Meanwhile, some middle-class workers saw their purchasing power decline slightly; others made only modest gains.

Some of the nation's 64 million working women are also unhappy about the business environment. Since the women's liberation movement began in the 1960s, American women have struggled with two major disadvantages in the workplace: (1) men are, on the average, paid more than women to do the same job, and (2) women have more difficulty than men getting promotions to positions of more power and higher income. In recent decades, women have made great progress. The glass ceiling, which is the name for the barriers that hold back women and minorities in the workplace, is being broken in many areas. Still, although almost half of the American work force is female, only 4% of the top executives of corporations are women. Men outearn women substantially. For every dollar a man earns, a woman earns 76 cents. By the age of 50, the average Amer­ican working woman has earned about $500,000 during her years of employment. For a man the same age, the comparable figure is about $1 million. However, women are nar­rowing the gap. More and more women are entering traditionally male-dominated high­paying professions such as medicine, law, engineering, and architecture. American women now earn 39% of the country's medical degrees and 43% of its law degrees. Women are also starting their own businesses in increasing numbers.

Though many Americans are not totally satisfied with the work they do or the money it brings in, on the whole the American workforce has adjusted well to enormous changes in the past 100 years. In 1900, about 20% of American women worked. Today, about 60% of women over age 16 are employed. During the twentieth century, the per­centage of employed men age 65 or older fell from about 65% to about 15%. Social Se­curity and other retirement benefits discourage older people from working full time. At the other end of the age spectrum, more young Americans are attending college now and are, therefore, beginning full-time employment at a later age. As a result, the num­ber of years that the average American works full time has shrunk quite a bit since 1900. Also, during the twentieth century, the percentage of agricultural workers fell from 40% to about 2.6% of the workforce, and the percentage of other blue-collar workers also de­creased. The majority of American employees are now white-collar workers. Years ago, it was common for workers to spend all their working years doing the same job for the same company. Today, conditions change rapidly, so people are often forced to relocate and learn new skills. From 1981 to 1985, about 11 million adult workers lost their jobs because of factory closings and cutbacks. Meanwhile, the number of jobs in high-tech fields has been growing rapidly.

One recent workplace change is causing some unhappiness. Americans are spending more hours on the job than they did a few decades ago. Americans think of a full-time job as being 40 hours a week-eight hours a day, five days a week. But, in fact, today the average American employee works about 47 hours per week, and about 37% of Ameri­cans are working 50 or more hours per week. Compared to 1980, Americans are working the equivalent of two additional weeks a year. Why? To increase profits, many compa­nies have "downsized" (decreased their number of employees), and they expect to get more work out of those remaining. Also, to increase their incomes, many Americans "moonlight"-take on a part-time job in addition to a full-time job. Americans are now working more hours than people in any other highly industrialized nation. Even the Japanese, often called workaholics, spend slightly less time on the job than Americans. The average American works 1,966 hours per year, ignoring the well-known saying that tells them: "All work and no play makes Jack a dull boy." Nowadays, Americans really need that Labor Day holiday more than ever.


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