Who or what is the middle class? (a must read?)

[Deja Q]

http://www.msnbc.msn.com/id/21272238/

Orzechowicz says just about anyone living on $50,000 a year can enjoy a middle-class existence in his neighborhood, which is why he says he’s puzzled when he hears that it’s getting harder to maintain that lifestyle in America.

“You can have a house and pay the bills and put food on the table and save a little and take a little vacation once a year," he said. "To me, that’s maybe lower end of the middle class, but it’s better than 98 percent of the people in the world.”

Very true. We're better off than many. But as the usual song and dance of "pull yourself up by your own bootstraps go", how does that explain all the people getting into big debt and doing their part to find a job go? How about the people who just sit at home and breed all day? (I could go off on two tangents, none of them being particularly polite and both of which encompass problems on a global, rather than national, scale.)

But where are the $50k jobs; especially those struggling to get Bachelor degrees, which seem to be a minimal requirement for most work - the cost of which to get the B.S. degree (no pun intended) being rather more than $50,000 and a lot of these jobs are entry-level; whose wages ($12~$15/hr) wouldn't make the $50k "low-end middle class" benchmark, never mind trying to pay back the student loan.

(SNIP)

Despite income of $100,000, ‘We are squeezed tight’
But many Americans who consider themselves middle class told msnbc.com they do feel financially squeezed. One of them is Kathy McClain, a wife and mother of three teenagers in Westbrook, Maine.

McClain and her husband have a combined income of $100,000 a year, which leaves about $80,000 after paying income and property taxes. They have no credit card debt, don’t take expensive vacations, and she drives a 9-year-old car. Tuition for their oldest child, now at the state university, costs another $16,000. The family makes too much for her to qualify for work-study.

Only $80k when all the taxes? How big is their home? What's the cost they pay when the day is done; $60k/yr?! Is their home loan fixed or variable rate? And do they fear their jobs being offshored any time soon? Something about the McClain's situation does not add up.

(SNIP)

...The decline of unionized labor in the past several decades has given employers more flexibility to increase productivity and adapt to rapid technological change and increased competition. But it has also devastated those workers who have been displaced from high-wage jobs and don’t have the skills they need to find a new one with comparable pay and benefits.

Now globalization poses a similar threat to the financial security of American workers whose jobs are “outsourced” to lower-wage, developing countries. Much of the credit for the current strength in the global economy goes to the elimination of trade barriers and the increased interdependence of producing and consuming countries. But if the economic benefits of that global growth flow only to a smaller and smaller group at the top, the backlash from those left behind could threaten the continued expansion of global trade, according to Zandi.

Hmmm. Unions may have some negative part to play, but employers who pigeonhole people rather than training them (training and looking for specialized skills like how was done in the past to Americans and now with everyone else in the world instead of Americans) seem to be somewhat responsible as well. As are we, the workers; there is nobody who is exempt if you look at the whole situation objectively.

(SNIP)

“Globalization is a fabulous thing. It raises everyone’s standard of living — it’s a net benefit to the global economy,” he said. “But there are losers. And if we don’t take care of the losers — if we don’t allow their standard of living to remain within some striking distance of the winners — then they could very well short-circuit the entire process.”

The article has a lot more; more than I can copy'n'paste for this OP.

What say you?

[Marrah_G]

1. Mine is about 35-40k a year

That is the working poor in Massachusetts (for a family of 4). I might be middle class if I were married (to someone with a job).

Middle class truly depends on where you live. Some might see my income as being easy to live on. But the reality is the cost of living here has gone up SO much that it is very tough for working people.

[baldguy]

2. Unions gave America the middle class.

Now that the unions are gone, the middle class will go with them.

[question everything]

6. Unions and factories go hand in hand

Once we moved from a manufacturing based economy to a service one, there was no room for unions and we started migrating into opposite sides of the class system. The CEOs and investment bankers and brokers who reigned over the mergers and acquisitions of the Reagan "voodoo economics," who, win or lose, got their fat cut while millions lost their jobs.

At the same time we embraced the cheap Wal-Mart merchandise as the only one that we could afford, providing more incentives for the cheap manufacturing overseas, in a never ending Catch-22.

We have contributed to the developing middle class in India and in China that, in turn, is putting demand pressure on petroleum products... and so it goes.

Where will it end? I have no idea. Perhaps in a true "globalization" where everything cost the same and everyone gets paid the same across the globe. This may actually bring peace..

[Deja Q]

9. I agree. Cost of living equal to the wages to provide incentives. And abilities to pay back.

Unfortunately, some (not all outside the "We like globalization" camp) claim that's communism. Wait, communism is wrong yet we support communist countries by offshoring to them, is that it? (color me confused, again, and for a democracy, how the Indian 'culture' treats their women - how many women would, given a democratic vote, ultimately choose to be treated like that?...)

*sigh*

I do believe you're correct; once the US "corrects" itself, more opportunities will return. And if we're wrong, oops. Still, it does make sense that would be the case... the problem is not to worry about long term "maybes" and concentrate on "here and nows". There's always a way; a positive way. (I can think of a couple tinfoil theories too, but those are too asinine for even me to even hint at.)

[question everything]

15. I do need to correct, though

I don't have any problems with doctors and pilots and air controllers and nurses - in whose hands we put our lives - earn more than, say, a meter reader or a cafeteria worker. Human nature is such that we do want to excel, we do compare ourselves to the "Joneses."

What I was thinking was that while doctors and factory workers may be paid differently, the professions themselves would be paid the same across the globe.

[Deja Q]

16. Thanks for the clarification.

I knew what you meant (the more difficult and/or unpleasant the task, the more it should be rewarded - as means of encouragement).

But will such wages be equal across the globe? And the cost of living, this is how the 'developing world' has a tremendous advantage over the developed one right now.

[Cleita]

3. Degrees really don't guarantee middle class existence.

I know people with degrees who work as waiters and some who are even homeless. Ill health and other setbacks, not to mention lack of jobs in their field, can make a person poor and even homeless. It's our system that creates a middle class with unions and job and wage laws to protect workers, not degrees or a dog eat dog work environment where the meanest Pitt bull gets to the top.

[Warpy]

4. I say that the middle class historically has been the class

that still has to work for a living, but earns enough to live well, educate their children and save for a comfortable retirement while affording household help, whether or not they employ the latter.

Wealth means not having to work for a living, one's money does the work.

Working class means working for a living, not being able to educate one's children, and being able to save very little for retirement.

Poverty means working for a living but getting paid too little to live well on.

Destitution means working for a living but being unable to afford the bare necessities of food, clothing and shelter.

The GOP has defined poverty downward. What we call poor is now destitute, etc.

The middle class in this country has disappeared, something you discover when you start looking at net worth. Even those people fortunate enough to be making middle class salaries in the 6 figures are often drowning in debt: student loans, car loans, mortgages, and credit card debt. Net worth is miniscule or even in negative numbers, even though the lifestyle might still be comfortable.

That's why the numbers aren't adding up. The ability to leverage debt is what is affording most people a middle class lifestyle. Their wages have been inadequate for many, many years.

[Deja Q]

7. And like the commercial says, when

"When there's life, discover vista" or whatever the name of that credit card company is, people go and do it...

Who needs to enjoy life upfront when it can be done so on a multiple payment plan? Seemed fair at the time...

Times have changed. Now it's harder to pay back what the companies paid the media to say (commercials).

If all that isn't consistent proof media influences our kids (and ourselves), what is? (not to wander into the tangent of gratuitous violence and sexual frivolity in the media, et al, of course...)

[no_hypocrisy]

5. Annual salary is no indication of class status/caste status.

Anything above the poverty line depends on where you live. A small town in rural Montana vs. the Upper East Side of Manhattan determines how fast you can spend $50,000 (one day vs. one year).

[Hydra]

8. I didn't read the article

but anytime you see how globalization is a benefit to anyone but the greatly wealthy, you have to be suspicious. I don't see just the manufacturing jobs leaving, I see plenty of tech jobs and other education based jobs disappearing as well.

I love though that they think to give a sop to the people getting screwed by this so the powers that be don't end up with a French Revolution moment. I think that sums it up well- would you have to worry about that if this was actually working?

[Deja Q]

11. Given the mass influx of H1B people, who don't seem to have a gun to their foreheads,

and all the articles telling of India's and China's middle class booms, there is certainly some truth to the claim it's benefiting more than the wealthy. Though it's true, in America, they're getting the big end of the stick. I wonder how all 300 million of us could become CEOs... (I recall an old episode of Rush L's old TV show where he was praising the increasing number of wealthy citizens and wishing all of us were... that was from 1994 (or '95), of course... )

[Hydra]

14. I went ahead and read the article...not as bad as I thought

Though I think this says it all:

real reward for an hour of work has more than tripled," according to a February speech by Federal Reserve Chairman Ben Bernanke. In 1947, median family income, in 2004 dollars, stood at just $22,500, according to the Census. By 1973, that figure had doubled, and continued to rise to $57,500 by the year 2000.

Generally speaking, inflated price of goods has been 10x (and that's conservative). I hear how gas cost $.25 per gallon in the late fifties/early sixties.

If income has only tripled, no wonder things suck. That would mean in real world, your work is worth 1/3 of what it would have been had wages kept up.

Let's see...I make about $26,000 currently(my employer does not believe in good wages except for execs), at 3x that, it would be $72,000, which would work fine for me and my disabled relative, requiring no gov't support.

Welcome to the gilded age. Again.

[Crabby Appleton]

10. Look up the demographics here - 37K median HOUSEHOLD income

in my zip,

http://zipskinny.com/

[Yavin4]

12. The Middle Class Is Defined By The Net Asset Value of Your Assets (NAV)

It's the value of what you own minus the value of what you owe. What that number is determines your class. My rule of thumb is that $150,000 of NAV makes you middle class in America. I would further break down the rankings this way:

Less than $0 - Working Poor and/or Non-Working Poor
$0 to $150K - Lower Middle Class
$150K - Middle Middle Class
$150K to $300K - Upper Middle Class

Over $300K - Upper Class


What constitutes Assets? :
- Equity value of your home
- The value of your 401K
- Value of your savings and investments
- Generally, anything that you can convert into cash


What are your typical liabilities:
- What you owe on your home
- Credit Card debts
- Outstanding balance on your car lease or loan
- Educational loans
- Any other loans that can be called

[jojo54]

13. It's only hub and I but $65K just doesn't cut it.

It's the things that you can't buy or do that's the problem. We have all the normal bills; utilities, phone, cable etc.; 5 insurance policies (hub's and small ones for the grandbabies); 1 car payment & insurance, so forth and so on.

But we're going to need a new furnace soon, our little kitchen and 2 bathrooms need updating something terrible and we have only $7K in retirement so far, which is about 10 years away.

Wooptyf*ckingdoo. Now, guess which I fear more: another terra attack or poverty level after retirement?