Forum Post: from an investment newsletter no less! when we have money managers sounding like socialists, things must be pretty bad
Posted 3 years ago on Jan. 10, 2012, 8:28 a.m. EST by flip
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from stephen leeb -Now, to look at another factor, the number of women with young children in the U.S. who now work – and we’re not talking here about the CEOs of Xerox or Hewlett Packard, but rather, women from lower income groups who typically take low-paying jobs and have to put their children in daycare in order to do so – has risen dramatically since the 1970s. This is a tricky and complicated area to talk about; we’re not sociologists, and neither do we take an extreme position at any spot along the male chauvinist – feminist continuum. But speaking from personal experience, and even knowing how difficult it can be at times to raise a child, it seems very hard for us to imagine that many woman (or men, for that matter) would really want to drop off their very young child at a daycare center on their way to a low-paying job, whether it be secretarial, bill collecting, retail, food service employment, etc. Again, we realize this is tricky territory from a social and political standpoint, and undoubtedly there’s a variety of different cultural, psychological and economic factors that come into play in determining the choices each individual makes. But the essential point we’re making is that if families truly need two incomes to sustain their standard of living, American standards of living may be vastly overstated. Also consider that we’re talking about real GDP per capita – which is nominal GDP per capita minus inflation. If inflation were sharply understated, you would be subtracting a much lower amount from nominal GDP and therefore arriving at a figure for real per capita GDP that’s distorted to the upside. If this is the case with the U.S., then even the measly 1.4 percent per year gain in real per capita GDP is sharply overstated. And coming back to our example regarding the increased participation of women with young children in the workforce, at a time of rising standards of living, there seems to be a disconnect with America circa 2012 and America circa 1970. In earlier years, young mothers’ participation in the workforce was much less frequent and single-income families were more common; today one-income families, even with very young children, are few and far between.