The incomes of most American households have failed to gain ground
on inflation since 1973. That
much-repeated economic statistic is
now common wisdom.
What's just now coming to light is the impact that so many years
of stagnant incomes is finally having on the
Broadly speaking, the old psychology of affluence _ the confidence
that homeownership and high levels of consumer
birthrights _ is breaking down, social scientists and pollsters
Materialism endures; young Americans still value the good life.
But they pick their purchases to simulate
affluence, not achieve it.
Thus, purchasing a BMW or an Armani suit might be out of reach,
but not other stylish clothing or compact disk
players or elegant food,
and that is where the money is going.
"Consumers are learning to make lesser purchases and they are
accepting the view that they cannot have it all,"
said Watts Wacker,
executive vice president of Yankelovich Clancy Shulman, a market
research company. "They seek control over their
The fallout from stagnant incomes came up repeatedly last week at
an annual conference in New York sponsored by
Demographics, an organization tat explores American attitudes and
behavior to help companies market their products.
The impact is particularly noticeable in the under-30 generation,
where stress and compromising personal goals are
Wacker and other speakers said.
The Roper Organization, for example, finds that the under-30
population increasingly wants to own homes and have
children. But without
the wherewithal, marriage and homeownership are postponed.
Similarly, college students are more willing than the baby boomers
were in the late 1970s to become involved in
But despite their activism, young people more than ever seek jobs
that pay well, while the baby boomers at the same
age preferred work that
"This is not greed, but simply a desire to deal with a cruel world
and to seek a sense of self-sufficiency that
earlier generations took for
granted," said Bickley Townsend, a Roper vice president.
The stagnant income problem also shows up as pent-up demand that
remains pent up. In the past, as the American
economy came out of
recessions and jobs multiplied, restoring incomes, people no
longer postponed the purchase of cars and homes, and
sales rose sharply.
But in the recovery now apparently getting under way, car and home
sales are muted, in part because even jobholders
often find these major
purchases unaffordable. …