Skip to main content

See also:

6 ways to cope with a stagnant job market

After World War II, General Electric and Alco thrived in the Capital Region. Good paying jobs were for the taking. Businesses flourished as most families had disposable income.

Did "Reaganomics" forever alter our jobs outlook?
Photo by Chip Somodevilla/Getty Images

You can see a reverse trend today in America. When we had heavily regulated and taxed capitalism in the post-war era, under Roosevelt and Eisenhower, the largest employer in America was General Motors, and it paid working people what would be, in today’s dollars, about $50 an hour with benefits.

According to Thom Hartmann writing in Salon.com, Ronald Reagan began deregulating and cutting taxes on capitalism in 1981, and today, with what we call “Reaganomics,” or “supply side economics,” our nation’s largest employer is WalMart and it pays around $10 an hour. McDonald's financial advice to its workers, making minimum wage, is to get a second job.

What steps can a family take under this weight of bad news?

The ultimate key to financial success is knowledge – about how money works, how to make responsible, well-informed decisions and how to get the best value for the dollars you spend. It is possible to survive, and do well in this tough environment with diligence and smart thinking.

Understand the basic, common sense financial concepts that can help people overcome the obstacles they face and achieve their goals.

  1. Learn about taxes, just enough to protect yourself from their damaging effects on your paycheck and future.
  2. See the effects of debt, a new and growing threat to families.
  3. Learn how money grows and become an investor, not a loaner.
  4. Understand life insurance traps and make a wise purchase to protect your family.
  5. Don't get a tax refund and give a free loan to the government.
  6. Learn about the three-legged stool of retirement, and how only one leg remains standing.

The critical first step is learning to make wise financial decisions. You, the consumer, must become independent thinkers and always make your own choices, whether you're purchasing financial products or any other goods or services.

Dave Balog teaches financial essentials for families. Visit his Web site by clicking here.