Why we can’t go back to the old economy

Summer 2009: The New Economy

Just the Facts :: Why we can’t go back to the old economy by Kim Eckart, Doug Pibel and Laura Kaliebe We’re manufacturing money, not goods The U.S. economy was strong in 1950. A quarter of GDP came from manufacturing. Now the biggest sector is finance and real estate—making money from money. You need college to get ahead Manufacturing jobs used to provide a good living. Now, you’re stuck if you don’t have a degree. Annual income for those without a high school diploma has dropped 25%. But college is harder to afford In the last 30 years, average tuition for public 4-year university increased 430%. For private university, 380%. Increase in median family income in that time? 10%. We’re using up the Earth Ecological footprints measure how much land and water it takes to provide for humans. If everyone consumed like the U.S. , we’d need about 5 Earths. And confusing needs and wants Consumer culture confuses wants and needs. In the bubble economy, we got needy. The bubble’s popped and we’re rethinking the meaning of “necessity.” 2009 YES! MAGAZINE GRAPHIC SOURCES: WE’RE MANUFACTURING MONEY, NOT GOODS :: Manufacturing made up the biggest share of the GDP in 1950. By 2008, the financial sector had taken its place. Gross-Domestic-Product-by-Industry Accounts, 1947-2008, Value Added by Industry as a Percentage of GDP Bureau of Economic Analysis, U.S. Department of Commerce, April 2009 http://www.bea.gov/industry/gpotables YOU NEED COLLEGE TO GET AHEAD :: A person with a college degree earns more than twice as much as a person without a high-school diploma. Median annual earnings of full-time, full-year wage and salary workers ages 25–34, by educational attainment, sex, and race/ethnicity: Selected years, 1980–2006 National Center for Education Statistics, U.S. Department of Education, http://nces.ed.gov/programs/coe/2008/section2/table.asp?tableID=894 BUT COLLEGE IS HARDER TO AFFORD :: College tuition outpaces growth in family income. Financing the Dream: Securing College Affordability for the Middle Class, Middle Class Task Force, Office of the Vice President of the United States, April 2009 http://www.whitehouse.gov/assets/documents/staff_report_college_affordability1.pdf [PDF] Year-by-year inflation-adjusted tuition statistics show growth in public and private college costs. Trends in College Pricing, The College Board, 2008 http://www.collegeboard.com/html/costs/pricing/1_4_over_time_constant_dollars.html WE’RE USING UP THE EARTH :: If everyone lived like Americans, we’d need about five Earths. Living Planet Report 2006, World Wildlife Fund http://www.panda.org/what_we_do/footprint/one_planet_living/about_opl/solutions Global ecological footprint, in billions of acres; global population 2008 Data Tables, Global Footprint Network http://www.footprintnetwork.org/en/index.php/GFN/page/ecological_footprint_atlas_2008 AND CONFUSING WANTS WITH NEEDS :: U.S. consumers’ ideas of luxury and necessity shift with a down economy. Luxury or Necessity? The Public Makes a U-Turn, by Rich Morin and Paul Taylor, PEW Research Center, April 23, 2009 http://pewsocialtrends.org/pubs/733/luxury-necessity-recession-era-reevaluations CALCULATE YOUR OWN ECOLOGICAL FOOTPRINT :: http://sustainability.publicradio.org/consumerconsequences Download PDF Poster. 632kb This article first appeared as part of The New Economy, the Summer 2009 issue of YES! Magazine. Interested? See more YES! Fact Sheets.