Peak Living Standards

[UndercoverElephant]

We aren't going to be to certain of the exact timing of peak oil (or the exact profile of the "bumpy plateau") until it is clearly in the rear-view mirror. There are also a lot of world-changing processes taking place at the moment which make it difficult to assess what is actually going on.

One thing I think is very clear though: the western world passed "peak living standards" in 2008. Since then, living standards throughout the western world have been under continual attack from:

1. Inflation, especially of essentials like fuel and food.
2. Ever-worse employment prospects and/or stagnant wages.
3. Massive cuts in public spending (NB: because of the bank bailouts, not because of "socialism".)
4. [in some places, especially the UK] massive hikes in higher education costs.
5. Increasingly insecure/worthless pension schemes.
6. Ludicrously inflated property prices consigning millions to rent-slavery.
7. HUGE DEBTS at all levels of the system.
8. A steady drift of wealth/power away from the west and towards the BRICs and the other remaining exporters of important raw materials.

I'm sure there's some other stuff that I've forgotten, but the net effect could not be clearer. Year on year, the standard of living of ordinary people in the western world has been falling since 2008 and, given that both peak oil and climate change are beginning to make their presence felt, we can be certain that these falls will continue, probably for the rest of all of our lives.

The only thing that might improve living standards is technological progress, but this is never going to be enough on its own to outweigh all the negatives. I believe the falls in living standards will continue until such time as the economic/political system has changed radically, and/or we change our notion of what "living standards" means in order to reflect quality of life as opposed to how much goods/services we consume.

My question is this:

Have we also passed global peak living standards?

Or is the drift of relative wealth/power away from the west enough to have kept average living standards elsewhere rising?

If the global peak has not yet happened, when will it happen?

[clv101]

Have we also passed global peak living standards?

Or is the drift of relative wealth/power away from the west enough to have kept average living standards elsewhere rising?

Most of the world is booming right now! It's only really Europe, Japan and North America that's having problem. Global average living standards are yet to peak, though I expect the UKs did around the middle of the last decade.

[adam2]

As with peak oil, I doubt that an exact date can be given for peak living standards owing to the absence of reliable data.
2008 is certainly reasonable though.

Living standards in the western world have almost certainly peaked, living standards in parts of the developing world are still increasing, but often only slowly, and from a very low base.
So average living standards have probably peaked.

Living standards are not easy to define, which makes determining the peak year even more diffecult.
For example some definitions of living standards included, and may still include such factors as
% of households with an indoor WC
% of households with central heating
% of households with a car
% of households owning their own home.

In years gone by, these and similar metrics gave at least a reasonable idea of average living standards of the nation as a whole, and of regional differences.

Not allways accurate in todays world though.
What if someone relatively affluent moves from London to a remote district of Wales, perhaps to a modest home without central heating or indoor WC ? By accepted standards their living standards have fallen, yet they might well be happier, have more leisure time, and more disposable income.

And as for myself, by some standards I live in poverty (dont own my home, dont run a car, dont take overseas holidays, dont have a TV, dont have central heating, etc)

Yet by other standards I would be considered well off (eat out at decent restaurants at least twice a week, travell by taxi quite a bit, and normally go first class on the train)

[UndercoverElephant]

Most of the world is booming right now!

It's not that simple, though, in terms of living standards. In places like China, India and Brazil (Russia is a bit different I think), there is an emerging middle class and super-rich class, for whom things are getting much better. But there is also a large majority for whom "middle class" remains an unattainable dream, and for anyone, anywhere, who is dependent on buying food/fuel at world "free market" prices, and whose income is such that food/fuel takes up a significant proportion of their outgoings, living standards have surely been falling.

That's why I'm asking the question...it is not obvious to me whether the AVERAGE living standard outside the western world is still rising, or whether there is just a growing inequality between the majority at the bottom and the emerging middle class minority.

[UndercoverElephant]

As with peak oil, I doubt that an exact date can be given for peak living standards owing to the absence of reliable data.
2008 is certainly reasonable though.

I don't think we need reliable data in the case of most European countries. And as you suggest, it is not even clear what "reliable data" means...does it include pension security or cost of going to university, for example? These are one-off step-downs in living standards as experienced by normal people, and I don't think we need the statisticians to confirm it for us. Most of us are living through it. We are seeing our own living standards and prospects being eaten away at, and those of our friends and family. And we are watching the same things cause civil unrest all across Europe.

[Kentucky Fried Panda]

Personally I have no more money now than I did in 2008. My salary remains the same, my house is worth less and my pension's value has declined.

Luckily, I probably won't live to retirement age.

[Lord Beria3]

That's why I'm asking the question...it is not obvious to me whether the AVERAGE living standard outside the western world is still rising, or whether there is just a growing inequality between the majority at the bottom and the emerging middle class minority.

Interesting question.

Everything I read suggests that the general living standards in the developing world are rising although some have benefited more than others.

Of course, within that general rise, you have seen a faster rise in the plutocratic elite (like the Chinese Communist party/industrialist class) than even the middle classes and the working masses.

However, compared to a generation ago, even a poor Chinese person is richer and more importantly has the prospect of attaining at least aspects of a 'western' middle class lifestyle in the coming decades.

In the West, living standards are declining year on year and I totally agree that this trend will continue in the coming decades.

Based on oil export models and projections on gas and coal energy growth rates, i would expect to see a continued rise of living standards in the developing world (although slowing in the 2020's) until it peaks by around 2030 - where maybe we will have reached a relative playing field? - before everybody starts to go down as the coal and gas party ends for the BRICS and the oil shortages really start to hit home.

http://www.guardian.co.uk/business/2012 ... years-oecd

This article argues that on current trends China will overtake the US by 2016. This I probably agree with although I suspect that the Chinese economy model is nearing breaking point.

http://www.guardian.co.uk/global-develo ... -forecasts

As for this article, very sceptical. It assumes current growth trends until 2060 which is pretty unrealistic.

[Tarrel]

Depends how you define "rise" in living standards. Many boom-nations are experiencing rapid industrialisation and urbanisation. There is, as stated above, the rise of the new rich and middle class. For everyone else in these nations there is undoubtedly a change in life style, not unlike that which happened during the industrial revolution here. Whether you'd call that an improvement is difficult to say. What's better; to live in rural poverty, or urban poverty?

[Lord Beria3]

Depends how you define "rise" in living standards. Many boom-nations are experiencing rapid industrialisation and urbanisation. There is, as stated above, the rise of the new rich and middle class. For everyone else in these nations there is undoubtedly a change in life style, not unlike that which happened during the industrial revolution here. Whether you'd call that an improvement is difficult to say. What's better; to live in rural poverty, or urban poverty?

Most people prefer the opportunities of a urban environment to the crushing lifestyle of a traditional rural world.

In the West we have a nostaligic vision of the country and village life. The reality is quite different.

[Tarrel]

Depends how you define "rise" in living standards. Many boom-nations are experiencing rapid industrialisation and urbanisation. There is, as stated above, the rise of the new rich and middle class. For everyone else in these nations there is undoubtedly a change in life style, not unlike that which happened during the industrial revolution here. Whether you'd call that an improvement is difficult to say. What's better; to live in rural poverty, or urban poverty?

Most people prefer the opportunities of a urban environment to the crushing lifestyle of a traditional rural world.

In the West we have a nostaligic vision of the country and village life. The reality is quite different.

Evidently you are correct, otherwise I suppose so many people wouldn't make the transition. I do wonder though, how many people are attracted by a life that doesn't exist. "Streets paved with gold", etc.

[UndercoverElephant]

Evidently you are correct, otherwise I suppose so many people wouldn't make the transition. I do wonder though, how many people are attracted by a life that doesn't exist. "Streets paved with gold", etc.

Often it is a choice between a reasonably guaranteed crap job (in the city) and a crap job that may be no job (in the country.)

I'm currently thinking about making the opposite trip - from Brighton to the middle of deepest Sussex where property is cheaper because there's no jobs and rubbish transport links. Well, almost no jobs.

[Tarrel]

Evidently you are correct, otherwise I suppose so many people wouldn't make the transition. I do wonder though, how many people are attracted by a life that doesn't exist. "Streets paved with gold", etc.

Often it is a choice between a reasonably guaranteed crap job (in the city) and a crap job that may be no job (in the country.)

I'm currently thinking about making the opposite trip - from Brighton to the middle of deepest Sussex where property is cheaper because there's no jobs and rubbish transport links. Well, almost no jobs.

It's OK if you can cut you're cloth accordingly; have an independent or portable form of income and/or reduce living costs. It's essentially what we have done. We have several small sources of income, none of which rely on being employed locally. Our only non-discretionary expenses are council tax, food, some electricity and maintenance/insurance. If one or more of the sources of income dry up, our modest savings will tide us over for a reasonable time because the outgoings are low. The "penalty" (although it's hardly a hardship) is a much smaller house, not having half a dozen retail parks within a 10 minute drive, and routine unexpected expenses being proportionally bigger and more significant than they were before.

[Catweazle]

My thoughts were that if TSHTF then I had a choice between being unemployed in a suburban 3 bed semi surrounded by 2000 other 3 bed semis each with 4-5 unemployed occupants, or being unemployed on a remote(ish) smallholding with livestock, fuel and veg growing.

I'm surprised more people aren't doing the same, but smallholdings are taking ages to sell, so perhaps I've misread the situation.

For me, it's a bit like insurance. My standard of living might be lower than if I stayed in the South East, but it can't fall as far as would be possible in the South East if everything went really pear-shaped.

It'll be interesting whatever happens.

[UndercoverElephant]

smallholdings are taking ages to sell, so perhaps I've misread the situation.

Said it before, no doubt will say it again...

If they are taking ages to sell it is because the vendors have an unrealistic idea of the true open market value. Drop the price and it will sell in 2 weeks.

[Little John]

smallholdings are taking ages to sell, so perhaps I've misread the situation.

Said it before, no doubt will say it again...

If they are taking ages to sell it is because the vendors have an unrealistic idea of the true open market value. Drop the price and it will sell in 2 weeks.

Exactly.