'Wage"ing a war on standard of living

A couple of days ago, students in one of my classes discussed the potential for a lower standard of living for their generation. While this is a distinct possibility, the students' argument is that wages in the U.S. will come down due to global competition. However, this does not take into account deflationary pressures on certain goods and inflationary pressures on others, not to mention the policies of the governments. If, in the aggregate, prices come down at a rate that is faster than the drop in income, standard of living might not be unduly affected.
Another consideration is that the U.S. enjoys a standard of living that is not commensurate with the underlying education, skill level and work ethics of the current generation. Like a pendulum that overshoots, the standard of living, often supported by wild credit and binge borrowing, has far out-shot the limit supported by underlying income generation, for the masses. A correction is underway, and it is likely that the pendulum will go the other way. The key question is whether the current young generation has learnt lessons from the past, and whether it is willing to buckle down and work hard and get a solid education. Some of us are trying- we have to wait for more evidence.