Can We Afford Grandma and Grandpa?

According to S Jay Levy, explanations put forth thusfar insufficiently resolve the question of why consumption declined during the 1980s for so many working households. Levy notes that the nation's standard of living is measured by the total of available consumer goods and services. Any cohort's standard of living is measured by its share of these goods and services—its slice of the "economic pie." After looking at the available consumer goods and services and at how they are apportioned among households, he finds that the retiree cohort has been consuming an increasingly large share at the expense of the working cohort. His results indicate that "the declining purchasing power of the wages and salaries of the lower-income half of the population was, at least to a large degree, the result of the rising consumption of the retired cohort of the population."