Boom and bust economy

I've always been puzzled by the mentality of folks who believe their income will do nothing more than increase throughout the years.  So many people stretch themselves so far with mortgages because they truly believe they will be making more money each and every year that goes by.  Therefore, they justify to themselves that their income with catch up or exceed the necessary level to meet the demands of an out of bounds mortgage.

We live in a boom and bust type of economy.  There are no guarantees that one's income will always be reliable.  Of course, there is a small percentage of people in this country that seem fortunate enough to avoid the highs and lows of a fluctuating income stream.  These folks are among the lucky few who have wisely managed their careers in order to avoid such instability.

To illustrate my point about income fluctuations, let's consider a real life current event - the news that Toyota has now surpassed GM and Ford as the number one seller of vehicles in America.  What exactly does this mean for workers in this industry currently at GM or Ford ?  Well, the possibility of them being layed off is very real.  Where might they go work instead ?  I bet Toyota is hiring.  Why do you think Toyota is now number one in the industry?  I can almost guarantee you that their costs are less.  What does this mean exactly?  Well, for one, they are probably paying their employees less.  Hence, professionals in this industry can expect to be performing their work for less money if they wish to have a job.

Unfortunately, we in America make way more money than folks in other countries.  There is an entire planet out there prepared to do our work for a lot less money then we are.  We'll continue to see our jobs go offshore.  For those jobs that do stay here in America, the pay levels will continue to remain flat or decrease.