The Greater Recession: The Real Reason Americans Feel So Squeezed - Yahoo! Finance

The Greater Recession: The Real Reason Americans Feel So Squeezed - Yahoo! Finance: "The core of our life -- gasoline, electricity, homes, health care and higher education -- is getting expensive faster than general inflation. Meanwhile, average wages are barely keeping up with the yellow line. When the middle class talks about feeling squeezed dry and sped-up, this is what they're talking about.

Committing the graph to memory is easy. Coming up with a theory is the hard part. Let me try. The reason why toasters are cheap and health insurance is not is that the productivity gains that made toasters -- not to mention computers, media*, durable goods, food, and clothes -- more affordable are not spilling over into health care. The next chart from McKinsey tells the story: More than half of total productivity growth comes from computers and information technology. Practically zero comes from health care and education. In fact, one reason why heath and education are adding the most jobs today is that employers can't meet new demand with technology or offshoring. They have to keep hiring people."

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