If the past 40 years are a guide to the future, then the lifestyle we currently define as "upper-middle class" will be redefined as "poverty" and will be available to virtually everyone, including people who can't even be bothered to find a job.

People will continue to complain about the declining middle class, how the median family can barely afford to live in a 4000 sq ft house with a robotic kitchen/laundry/bathroom and about how unaffordable their stem cell therapy and cloned organs are [1]. They'll watch TV news reports lamenting the bad economy on their 108,000p 10' 3d full immersion TV's, while the uber rich (income inequality will go up as well) do much the same thing, but in a 100,000sq ft house and a 50' TV. Also, the quality of stem cell therapy and robotic surgery available to the rich will be slightly greater.

[1] They will of course lump all medical goods and services together under the catch-all term "health care".

[edit: clarified that I'm thinking about 40 years here.]

I understand that many of the things we think we "need" or want become very relative over time. But if we include basics like needing food, shelter and then add in middle class health care, mobility, security, leisure and luxury, you are talking about an expensive ticket. Yes we have made impressive advancements and maybe someday we'll have things like 100% robotic aggregation/farming and no longer need to think a lot about how we'll get our food. But I don't think the middle class life will simply becoming the default option anytime soon.

What about overpopulation? Increase demand from developing nations for this "middle class"? What about our numerous energy issues? I'm also not sure what your frame of reference is for the past. I must be stuck in the rebound towards an up trend because I know for a fact that a houses were much more affordable for my parents who lived on one carpenters paycheck, even while I make a higher salary after inflation and have the assistance of my spouses income.

In any case, the point I'm making is that "middle class life" needs a time period to be attached. "Middle class health care 1970" would be pretty cheap today - any medicine available back then is out of patent, and dying of untreatable cancer is pretty cheap. "Shelter 2010" is 60% bigger than "shelter 1970". "Luxury" in 1970 would be a 32" color TV, as opposed to a plasma screen with playstation today. Basically, "Middle class 1970" == "poverty 2010".

It might be the case that middle class 2010 is as good as it gets - I'm not trying to make predictions. I'm just pointing out that if, as the OP suggested, the next 40 years are as bad as the last 40 years, then we will be doing pretty good.

I question whether availability of drugs is the best indicator of overall health.

We are also a lot more sedentary, the quality of our food is probably not as a good, and we are a lot heavier. Given that, how many drugs do we need to just break even, health wise, with where we were in 1970?

"as opposed to a plasma screen with playstation today"

It would be an interesting psychology study to figure out if a kid with an Atari in the 1970s was objectively less happy and fulfilled than a kid with a plasma screen and playstation today. I suspect it is the relative excitement of being one of the first to get a game before your friends is a bigger factor. I guess it's a little late to start that study at this point, however.

My overall point is that I think comparing quality of life across eras is more complex than just comparing square footage, drug prices, and pixel counts. Unless I misunderstand your point.

As for health, if people enjoy chips more than not being fat, I'm not going to tell them their choices are wrong (at least until 2014, when their choices are inflicted on me). Broccoli is available, they are free to eat it.

As for relative status, only one kid can be the first with a new toy in any era. In principle one could compare opinions and attitudes, but my guess is that they will be roughly constant over long periods. You can find find "kids these days, get off my lawn" and "my parents had it better" articles in newspapers of any era, for example. All I'm really assuming is that having a playstation or viagra is better than not having it.

In some inner city areas, even this is debatable.

For many reasons I doubt that the last few hundred years are going to tell us much about the next hundred. So many critical trends are following exponential curves that can't continue on indefinitely.

At the same, most of the reasoning about the future by even intelligent people still tends to involve linear extrapolation rather than exponential extrapolation - that's what makes sense to us. Thus it's more likely for a standard prediction is go wrong in the direction of the exponential trends continuing rather than in the direction of the trends stopping.

Moreover, one or another exponential trends might stop but the overall mine that Moore's Law comes out of, miniaturization, is not going to be exhausted at least until human construction reaches the nano scale.

Douglas Englebart had a pretty good approximation of what much of our information technology would be like today over 40 years ago.

http://sloan.stanford.edu/mousesite/1968Demo.html

Of course, this was because he put together all of the necessary underlying technology. I remember reading an interview with him in the 90s, asking him if he was surprised how fast technology was moving. He replied, no, he was shocked how long it took for the things he had working in the lab decades ago to reach the main stream.

That's the entire point of this (sub)thread. Making predictions of the next 40 years based on the last 40 is likely to lead you astray. A whole bunch of things are coming to a head. Coming revolutions in biotech alone are likely to seriously shake things up, IMO.

We consumers actually don't do that anymore: http://en.wikipedia.org/wiki/Concorde

40 years doesn't tell you much about the next 10.

Growth rates in recent times have depended largely on finite resources, many of which are now becoming scarce. It may be that we innovate around all of this, but it's far from certain.

Maybe we are really limited by available resources. We know for sure that we have limited supply of the solar energy. At the other hand, we are just using what is available on the surface of the Earth. Maybe we are going to figure out how to utilize more resources outside the surface of the Earth, or efficient way to use and recycle resources.

Biking through Oakland the other night, I saw a guy pushing a shopping cart with one hand and talking on his cellphone with the other.

A good deal of your lifestyles of the no-longer-needed description might true except ... the 4000 sq ft house.

For the now-permanently-unemployed, it would be a 40 sq ft "home" or perhaps a car or suped-up shopping cart. But still with lots of gadgets.

Space (at the least) isn't going to be made cheaper by mass production even if everything else will.

Wage growth has been slower than you'd expect because healthcare is getting much more expensive, so the increase is hidden in a worker's benefits, rather than being revealed in higher wages. Overall compensation is increasing: http://www.marginalrevolution.com/marginalrevolution/2007/10...

Unfortunately, most workers don't realize that their healthcare costs have a zero-sum relationship to their wages. This graph shows that point very well: http://voices.washingtonpost.com/ezra-klein/2009/10/will_low...)

It's a trifecta that is going to hurt.

Also, most people I know live in smaller houses than their parents, but that's purely anecdotal and based on the obvious fact that there are more people living on the same amount of earth. I happen to live in a major city.

http://www.realtor.org/RMODaily.nsf/pages/News2007032701?Ope...

In spite of the purported declining income and increasing energy prices, people in 2007 have more and better material goods and services than in 1967, far more than the mere $10k increase in real incomes would predict. You could be right, the next 40 years may be different from the last 40 - I'll leave predicting the future to you and Ray Kurzweil.

Real income analysis would require more time than I'm willing to commit right now.

Except that you did try to predict the future earlier. Energy prices haven't risen much yet. You have an odd pattern of dodging my main point, and picking at tangential details.

Btw, I put a caveat on the house thing, I live in a major city and I'm sure it's different in most parts of the country. I'll bet this changes when driving long distances to work becomes much more expensive.

As for dodging your main point, let me address it more carefully now. You seem to believe that incomes (by which I assume you mean income adjusted for CPI) is decreasing. And yet, over a period in which CPI adjusted incomes remained flat, quality of life dramatically increased. So why do you believe that decreasing CPI-adjusted incomes are worth worrying about?

I've said it at least three times already. Because it is highly probable that energy prices are going to increase significantly.

Btw, how do you measure quality of life. I always find it funny when people throw around that term relating to economics.

http://www.marketoracle.co.uk/Article1375.html

In any case, I'm not sure what this has to do with CPI-adjusted incomes.

By quality of life, I'm only estimating the direction of change rather than the magnitude. I'm assuming that having more stuff is better - I'm happier with flush toilets/a washing machine/Bioshock than without.

But do they live in smaller houses than their parents lived when they were your friends' age?

When I compare my current living space with the house I grew up in, it's significantly smaller. However, my parents were over 40 years old by the time I have my first memories. They'd been saving for close to 20 years to afford that place, while I've been saving for maybe 5 years.

When my mom was my age, she lived in a 4th floor walk-up with one of her friends from college. And yes, it was smaller than my current apartment. If you compare my mom's childhood with my childhood, she lived in a small apartment almost her whole life, until about 3 years before I was born, while I grew up in a house in the suburbs.

I wonder if this is behind a lot of the 20-something angst. We compare our current living standards to our living standards as children, and realize (correctly) that it's not as good. However, that childhood living standard is based on parents that were already at the peak of their careers, and had scrimped for years to get there. Of course we're not going to live as well.

I actually don't care that my place is smaller, and a bigger place wouldn't increase my quality of life much.

For example, those larger houses may be on cheaper land (further from cities), or people may be spending more of their income on housing (at the cost of, say, food quality, or education). There are a million ways for an individual statistic to be misleading. This is the whole reason that we use aggregated statistics like real median wage.

Fun fact: the bottom 11% in 1970 didn't have flush toilets.

http://www.digitalhistory.uh.edu/database/article_display.cf...

In 2001, the bottom 7-8% don't have dishwashers, which were generally considered a luxury item in the 1970's. Go read this article, describing the material conditions of the poor (circa 2001):

http://www.heritage.org/research/reports/2004/01/understandi...

Tell me, what items did the middle class of 1970 have that the poor of 2001 lack?

They're not items, but I'd say hope, stability, confidence, status, etc.

Really? In the US? In the 70's? This was at the end of the Vietnam War, during the oil crisis, remember?

As a random example consumer confidence at the lowest point during the financial crisis was still higher than it was in 1973 (during the Oil Crisis): http://useconomy.about.com/b/2008/04/01/consumer-pessimism-s...

If you were to drop back to 1970 and estimate the next 20 years by the 2010 scale, things are almost identical. If you measure 2000-2010 on the 1970 scale, things are a hard takeoff.

I'll go out on a limb and say that even normal retirement planning (50 years into the future) is a Maserati Problem.

Everybody that makes very long-term projections about money -- whether it's the gloomy "interest on $4m won't last 40 years" variety to the rosy "save $300 a month and the compound interest will make you a millionaire in 50 years" -- commits the same error: They neglect the fact that wars, revolutions, devaluations, confiscations, and other economic disasters have wiped out all savings at frequent points throughout history.

There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began -- but there aren't.

So if you're talking time scales of 50 years, there is significant probability that your carefully calculated spending or savings plan is self deceit.

The reason for that isn't financial but usually due to wealth dissipating though marriage. Some wealthy families relied on arranged marriages to keep the wealth in the family, but this kind of arrangement had it's own problems (first cousins marrying each other for multiple generations has clear genetic issues).

Nevertheless, some examples still exist: http://en.wikipedia.org/wiki/Rothschild_family (often claimed to have controlled the largest private fortune in history) http://en.wikipedia.org/wiki/House_of_Medici (although the Medici's lost most of their fortune in the 18th century)

Many rich European families were ennobled at some point, which makes their history more confusing. For example, the Duke of Westminster (6th richest man in the UK) is rich mostly because of his London land holdings. There are numerous other examples like that.

Carlisle Cullen. ;-)

Anyway - this is a really good point, but I'll point out something else. Most of the wealthy would-be trillionaires whose fortunes got wiped out passed down another inheritance: their genes. Those same disasters that wipe out the savings of the rich tend to kill the poor, who simply can't afford transportation away from disaster areas, bribes for border guards and security forces, political connections to ensure safety for their children, or information savvy to know when a crisis is coming.

Most of today's middle class is descended from the kings and nobility of the high middle ages. The peasantry just mostly died out, leaving no descendants.

That's simply untrue. For example, the majority of people of European decent in the US, Canada & Australia are from the "peasantry" classes (ok, by the time mass emigration was happing the "peasantry" class had mostly migrated to the factory cities in Europe, but they were still the poor people).

In Australia's case the early white population was mostly prisoners who were almost entirely poor, unprivileged and most certainly not nobility.

Source?

IIRC, the genealogical records (of most present-day Europeans and Americans being descended from the nobility) was presented as fact, but the causal link with the rise of the middle class was more tenuous.

I'll look again after I've gotten some actual work for $realjob done.

I'm not totally convinced about the theory, but the book was a surprisingly good read.

That being said. What we call 'The Middle Class' in the United States is kind of deceiving. Class can't simply be a function of how much cash income you bring in a year. Class has more to do with where that income comes from.

Those of us trading our time in exchange for money are working class, even if ( in the rarer case ) it is a greater dollar amount from a person whose primary source of income is the buying low, and selling high of commodities... such as, human labor, or pork bellies... and accumulating and reinvesting the difference.

Not true for Britain. The peasantry did mostly die out but the nobility did very badly as well. The middle classes were the forefathers. Sources etc. in "Farewell to Alms" by Gregory Clark

  >> There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began

""From shirtsleeves to shirtsleeves in three generations.": moneycentral.msn.com/content/retirementandwills/planyourestate/p147046.asp

That figure that you're citing is IN CONSTANT 2003 DOLLARS.

The nominal median household income in 1967, without adjusting for inflation, was $7,260.87. [1] So a "middle class" income has increased from $7,260 to $50,000 in 40 years.

Hopefully this clarification will make the author's nicey-nice spreadsheet make sense now.

[1] http://www.census.gov/hhes/www/income/data/historical/househ...

http://www.bls.gov/data/inflation_calculator.htm

$35,594 in 1970 got you the same as $200,000 today.

So why does it strain credulity to believe that $200,000 today will be equivalent to $500,000 in the year 2050? Inflation was much higher over the previous 40 years.

Of course that is compensated partly with productivity increases.

I recall somewhere seeing that if you take the term "millionaire" at the time that it was coined, it would today take 130 million to have that same level of wealth. I can't seem to scare up a reference, but it's at least broadly correct even if I'm off by 10 or 20%. If you don't retire a millionaire in 2030/2040 money, you're going to be in real trouble. You're probably in trouble if you retire merely as a millionaire.

There will be periods of deflation, and many think that one is starting now. It also won't be the last.

When you're talking about decades of retirement, the compound annual growth rate of inflation is all that really matters.

There isn't clear consensus on inflation/deflation in the near term. While last year saw deflation, a lot of economists think that printing money like we are will cause unusual deflation.