What Should I Do?

Are You Middle Class?

Wednesday, May 11, 2011, 1:48 PM

This post appeared earlier today in our Forums. We've elevated it here because we think it a useful exercise for the CM.com community to engage in. How realistic is the dream of financial self-sufficiency for today's society?

Are you middle class? Surprisingly, most people who think they are middle class, are not middle class.

Being middle class is being able to afford what most would expect a middle class family of 4 or 5 can afford:

  1. Income (from job and/or investments) to financially support yourself and your family of 4 or 5 without resorting to government assistance when it comes to rental housing, food stamps, etc.
  2. Reasonable health insurance/health care for your family (with affordable co-pays and deductibles, assuming no major debilitating conditions).
  3. Reasonable dental insurance/dental care for your family (cleanings, the occasional crown, braces for a kid or two, etc. with affordable deductibles).
  4. Paid off all student loans within 10 years of graduating college.
  5. Savings for retirement, around 10% to 15% or more of income put into a 401(k), IRA, or other investments to cover retirement at age 65, medical expenses, possible nursing home care, etc. (With or without Social Security or Medicare, your choice, depending on if you think it'll be there.)
  6. Savings for both short- and intermediate-term goals (such as one replacement computer/notebook, television, or home appliance a year; a gently-used replacement vehicle every 7 years for each spouse).
  7. Savings for long-term goals (having a 20% down payment towards the purchase of a house near where you currently live within 10 years of entering the job market, having public college expenses at least half-covered within 18 years of each child's birth).
  8. Kids' stuff: school clothes, tricycles/bicycles, inline skates or other sports equipment, uniforms or musical instruments, allowances, help with a used car when they reach driving age, etc.
  9. A family vacation for a week, at least once every year or two; a family vacation for a week at least 2,000 miles away, at least once every 5 years.
  10. Taking the family out to a decent restaurant (not Denny's) at least once per week.
  11. Some new clothes and shoes each year - no need to shop for second-hand clothes.
  12. Debt-free except mortgage - i.e. credit cards completely paid off every month (or at most three months).

If you're on government assistance, if you've delayed health care or dental care because of costs, if you can't save 10% to 15% of your income towards retirement costs, if you aren't able to save the equivalent of a 20% down payment towards a house (yes I understand you may not want to own, but y'know what I mean), can't afford to take vacations, aren't able to pay off your credit card every month, etc. - then you're really not what traditionally would be defined as middle class. You're struggling or you're working class or lower middle class. Even if you might have an iPhone or some of the latest fashions, you're really deluding yourself.

This goes double if both spouses work and such a lifestyle still can't be afforded. Over 50 years ago, most middle class women didn't even work outside the home.

Feel free to share this. And feel free to mention some other things that would be expected of a typical middle class family, that many who think they are middle class, actually can't afford

Addendum:

After I wrote this, I thought back on a New York Times article I had read a month or so back. It had come on the heels of a study on how much was the minimal necessary for a family to be able to not just "meet basic needs without relying on public subsidies" but also to know the "thresholds for economic stability rather than mere survival, and takes into account saving for retirement and emergencies."

Many Low-Wage Jobs Seen as Failing to Meet Basic Needs
"According to the report, a single worker needs an income of $30,012 a year — or just above $14 an hour — to cover basic expenses and save for retirement and emergencies. That is close to three times the 2010 national poverty level of $10,830 for a single person, and nearly twice the federal minimum wage of $7.25 an hour."

"...and a family with two working parents and two young children needs to earn $67,920 a year, or about $16 an hour per worker. That compares with the national poverty level of $22,050 for a family of four."
http://www.nytimes.com/2011/04/01/busine...

Obviously, the thresholds from the study don't factor in luxuries like vacations and a lot of other things. But it does factor in saving for a down payment on a home, an emergency fund, children's college, etc.

- Poet

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53 Comments

macro2682's picture
macro2682
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True, but...

I think that list of middle class markers are still a bit too 'American.'  Many on this site agree that the standards of living in the United States need to fall, since they've been elevated by a bubble in credit.  Standards of living will need to fall back to a point that can be sustained by our trade balance.

Naturally the definition of middle class would need to adjust downwards during this process (if it is to remain "middle").  The size of the middle class always remains the same, but their quality of life is falling (as many of us are expecting).

I wonder how the middle class is defined in Africa, or India. 

America is still (but not for long) on of the very few places where the people "in the middle" have a pretty sweet life.

Just think about how other species have it... human's are the only species who's middle class isn't constantly flirting with starvation every day of their lives.

It's good to be human, and it's even better to be American, for now.

 

Poet's picture
Poet
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For The Record

Sorry, Macro2682, I wrote these things terms of the traditional middle class American family, because that's how it's been portrayed in the media, in movies, in commercials, etc. for many years now. And what was achievable for many in the past. In the 1950s, many arguably middle class American families could afford most of the criteria with just one spouse's income. Now most have both spouses working.

Rather than define middle class downwards to always be in the middle quintile of affluence in America (and Australia, New Zealand, Western Europe), I think it's important to instead define what constitutes the middle class and hold to those standards. That's how Brazil or China can be said to have an "emerging" or "growing" middle class. Or in this case, that's how we can chart (anecdotally, of course) our own situation in America, and see if there has been a decline in the standard of living over time, with wages stagnant and prices rising.

For the record, no I'm not what I would consider middle class. Probably lower middle class, since we do save for retirement and we do have an emergency fund and are not in debt (handling 8 out of 12 on the chart). I would say that I was middle class from about 2002 through 2009. What changed was marriage and then children (twins), with my wife now being fully devoted to taking care of our babies (whereas before, she was pulling in part-time income while going to college full-time). Hopefully within about 8 years, things will change with the kids in school and my wife finishing her degree and working.

Poet

rhare's picture
rhare
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Middle class - have standards risen considerably?

Thanks for bringing up the topic Poet, as I think it's worthwhile looking at some of the items that we seem to count as "Middle Class" today:

Poet wrote:

2. Reasonable health insurance/health care for your family (with affordable co-pays and deductibles, assuming no major debilitating conditions).

3. Reasonable dental insurance/dental care for your family (cleanings, the occasional crown, braces for a kid or two, etc. with affordable deductibles).

One of the issues which has been being discussed on other topics lately is insurance and health care.  If you look back prior to 1973 and the passing of the Health Maintenance Organization Act, families had traditional insurance or paid for the care directly.  That is the things you list above were not really part of middle class.  If you went to the doctor or the dentist for any routine stuff (non major surgery) you paid for it.   So does this mean that families had to have more disposable income, or does it mean we use the services much more often?

I believe the HMO act was the beginning of the unsustainable health care course we are on today where costs are distributed across a large percentage of the population with little visibility to the individual.  This has allowed physicians, health plans, hospitals to charge much higher rates that would otherwise be possible in a free market.

Poet wrote:

4. Paid off all student loans within 10 years of graduating college.

Very few people I know had student loans.  College was much more affordable and either you worked your way through college or parents saved enough to cover it.  However, college costs have risen dramatically. Why? Why are they substantially outpacing inflation?   Is it possibly due to the SLM Corporation (better known as Salle Mae) starting up in 1973?  The GSE has allowed students to become saddled with government encouraged debt.  This has allowed the universities to charge much higher than market prices given the massive subsidy of government guaranteed loans.

Poet wrote:

5. Savings for retirement, around 10% to 15% or more of income put into a 401(k), IRA, or other investments to cover retirement at age 65, medical expenses, possible nursing home care, etc. (With or without Social Security or Medicare, your choice, depending on if you think it'll be there.)

It used to be much easier to save since your savings were actually worth something.  Now a 10% savings w/inflation is really only 2-3% now and probably much less if you look at inflation rates throughout the 70's and 80's.  The long term debasement of currencies that came to a head in 1971 with the shutting of the gold window which was a sign that much of the "wealth" throughout the 50's and 60's was just an illusion created by subsidies from the federal government in the form of money printing with a foreign exchange supported by gold convertibility which hid much of the negative inflationary effects.

Poet wrote:

6. Savings for both short- and intermediate-term goals (such as one replacement computer/notebook, television, or home appliance a year; a gently-used replacement vehicle every 7 years for each spouse).

8. Kids' stuff: school clothes, tricycles/bicycles, inline skates or other sports equipment, uniforms or musical instruments, allowances, help with a used car when they reach driving age, etc.

9. A family vacation for a week, at least once every year or two; a family vacation for a week at least 2,000 miles away, at least once every 5 years.

Have we dramatically increased spending?  I certainly see kids with far more toys, people with cars rarely older than 4 years, fancy kitchens, appliances, etc.  I know I certainly felt we were in the middle class growing up, but even the richest families did haven't near the high class stuff I see people living with today. 

I think the we have dramatically increased the standard of living for what is consider middle class today.  We have made it an illusion that you can have 2-3 kids and not sacrifice the new car, the fancy house, or the new toys.  I don't believe that meshes with the reality of the middle class in the 50s, 60's, and 70s.  I believe this new "have it all" is a recent phenomenon from about 1990 onward. To me it seems that the "middle class" of today is a considerably higher standard of living than the middle class of the 1960s.

Poet wrote:

Even if you might have an iPhone or some of the latest fashions, you're really deluding yourself.

I certainly agree with you that the middle class is shrinking, but I'm not sure if it isn't somewhat of our own making as so many of  us have prioritized immediate consumption over savings.  We live the medium to upper class now for poverty later?

bsm20's picture
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Re: True, but...

The thing is, the entire concept of "middle class" is largely a 20th century American phenomena.  Prior to that period of time (coinciding roughly with the fossil fuel revolution), there really was no middle class to speak of.  People were either wealthy or poor/working class (or indentured in some form or another).  The rise of the American middle class is almost entirely attributable to cheap, abundant fossil fuels.  These energy sources were so energy dense that they allowed great amounts of excess energy (beyond that needed to simply sustain life and meet basic needs) to be applied to other things.  These things became the trappings of middle class America.  If/when cheap fossil fuels are no longer widely available, the middle class is going to lose access to their energy slaves.  A very few may manage to make the move up into the world of the wealthy, but the vast majority are likely to return, over time, to their more historically common place as working poor.

Plenty of people would argue (and pretty convincingly, I think) that this process has already begun.

nickbert's picture
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Re: Are You Middle Class?

Rhare's post I think brings up a very good point, in that the middle class expectations are rather different than they were 3 or more decades ago.  The part in bold from my post in the original thread (cross-posted below) outlines my own family's experience, in that the only way for us to truly be 'middle class' in the ways that count is to not live the idealized middle class lifestyle.  And to be frank, regarding income and savings we are still well above the median household levels for our age group... I cringe at the thought of those trying to live that life on the median household income.  This 'scope creep' in lifestyle or standard of living is a devilish thing, and I'm glad we didn't get caught up in it.  

Perhaps we should develop a middle class criteria list for a post-3E's world?  Poet's list I think is a good & reasonable definition for the current situation, but we know that's changing as we speak and will look a lot different in the future.

 

Cross post from the original thread:

------------------

Well I'd say your criteria are pretty spot on, at least in terms of American living.  With my old job I would say our family solidly met those criteria, and probably considered solidly upper middle class in terms of income, though some might say our lifestyle is/was closer to lower middle (simple 2-bedroom apartment with no garage, both cars are 5 years old or older, and we buy secondhand stuff frequently).

Now we are a one-income household, at least until my entrepreneurial efforts yield fruit which I realistically expect to take a long while.  Long story short we still qualify in all your categories except for two, and it's hardly a shock that one of those happens to be number 2... health care/insurance (the second is dental care/insurance, though that's not a concern for us until the little one is much older).  We had our insurance through my job, and while my wife's RN job pays well she does not get health insurance through her position.  In the short term we are continuing my insurance through COBRA (or as I call it, the Bend-Over-And-Squeal-Like-A-Pig priced health insurance), and while we can afford it, it hurts to pay more for health insurance than we do for rent and it'll only last for 18 months.  And there aren't any better options for us, as all comparable health insurance plans available for us to purchase are about as expensive or more so.  I don't mean to sideline the discussion into a health insurance debate, but the simple fact is that this is our biggest challenge or predicament in terms of the listed criteria.

One thing that I think is particularly telling though, is that if we had bought into the 'American dream of home ownership' and bought expensive cars and the other crap that is expected of our income level, we'd have little ability to save or might actually be running a deficit now.  Living frugally and below our means has made all the difference in not only keeping our heads above water (or staying 'middle class' if one prefers) but giving us the ability to continue to save and pursue our own business interests.

Poet wrote:

Taking the family out to a decent restaurant (not Denny's) at least once per week

Hey, don't be knocking Denny's!  Why, there's no better place for taking your special someone on your anniversary for a Super Slam or Moons-Over-My-Hammy breakfast (no regular Grand Slam breakfast will do for such a special occasion Laughing)

--------------

 

- Nickbert

wmarsden's picture
wmarsden
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Your version of middle class seems pretty wealthy to me.

First off, where I'm coming from: my husband and I are both professionals with advanced degrees and are earnings are in the top 20% of income in the U.S., so I'd say we're a few steps above middle class.

That said, I significantly disagree that "eating at a nice restaurant" once a week is a middle class behavior.  I think that's an astonishing luxury not at all what I recall from my upbringing in the middle class.

Furthermore, you also threw in their the astonishing luxury of not dying from cancer.  Seriously, you think that's a standard of middle class living through-out history?  On the contrary, we are now paying something like 20% of our wealth for health care which has become shockingly effective at keeping us from dying.  Each of us decides every day that we'd like to pay for health care expenditures that are equivalent elements of our budgets to food or housing, for the same reason we pay 20% of our budgets towards housing: there just isn't any other good or services we value as highly as health care.

But the average spending per American is well over $4K/year on health care now.  Do NOT make the mistake that this is a middle class right.  This is an enormous, absolutely UNBELIEAVABLE benefit to us, equivalent of moving out of a cave into Levittown.

-- Wendy

 

 

Travlin's picture
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It's a fact
Poet wrote:

Rather than define middle class downwards to always be in the middle quintile of affluence in America ... I think it's important to instead define what constitutes the middle class and hold to those standards. ... that's how we can chart (anecdotally, of course) our own situation in America, and see if there has been a decline in the standard of living over time, with wages stagnant and prices rising.

We can go beyond anecdotes.  Elizabeth Warren has done a very good factual study demonstrating this decline.  Even if you disagree with her political views, her rigorous study, based on hard data, is compelling, and controlled to compare the same factors over time.  The video is particularly good with eye opening graphs.  It was a real wake up for me when I first say it.  As I remember, housing, health care and day care were the biggest changes that account for the decline, along with income instability.

You did a nice job Poet in presenting this topic.

Article  http://harvardmagazine.com/2006/01/the-middle-class-on-the-html

Video 

Book  http://www.amazon.com/Two-Income-Trap-Middle-Class-Parents-Going/product-reviews/0465090907/ref=dp_top_cm_cr_acr_txt?ie=UTF8&showViewpoints=1

 

rhare wrote:

 

I certainly agree with you that the middle class is shrinking, but I'm not sure if it isn't somewhat of our own making as so many of  us have prioritized immediate consumption over savings.  We live the medium to upper class now for poverty later?

Warren's study of middle class decline was controlled to compare the same factors over time.  Same size house, etc.  However, your are right Rhare that for many people increased consumption is also a factor.  I see it everyday compared to when I grew up.  Young adults expect the world and expect it now.  A lot of the older ones aren’t much better.  The middle class has been burning the candle at both ends.  Now reality intrudes.

Travlin

wmarsden's picture
wmarsden
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Look the the 19th century

Edited to clean up threading.

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wmarsden
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Look the the 19th century
bsm20 wrote:

The thing is, the entire concept of "middle class" is largely a 20th century American phenomena.  Prior to that period of time (coinciding roughly with the fossil fuel revolution), there really was no middle class to speak of. 

I totally agree with you that the concept of the American middle class is tied to the American Century of cheap fossil fuels.  I was just discussing with someone that the sort of house that makes sense to buy is the sort of house that made sense to buy in 1900.  Could it function as a home without cars?  Without cheap oil?

But I disagree that there was no middle class.  Yes there were.  Merchants and professionals, educators and religious leaders, and of course government workers constituted the middle class and always have as far as I can tell from my readings of economics throughout history.

The things that are truly new in this century are communications and health care, in my opinion.   Used to be that only the wealthy could afford phones.  For example, there was a tax put on long distance charges at the turn of the last century to pay for the Spanish American War because it was viewed as only a tax on the wealthy.  And, of course, everyone died when they got cancer, poor and rich and middle class alike. 

So I'd say he's got quite a lot of scope creep in his definition of what middle class means if you go back before the era of cheap oil to see what that term USED to mean.

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Re: Look the the 19th century

Fair enough.  I suppose a more accurate position would be that the historical middle class was largely an outcome of the process of increasing societal complexity, a process that substantially increased with the advent of agricultural support of urban centers, but really went exponential (and unsustainable) with the discovery of fossil fuels.

The middle class would have originally consisted primarily of those specialized trades that sat in between nobility and peasant agricultural workers.  These people would mostly have lived in towns and villages and would have provided services mostly to the nobility, but also to each other.  Their lot in life would have been only marginally better than that of the peasants who worked the land.  They probably would not have owned any meaningful property, paying rent for the roof over their head.  Indeed, they would have been largely dependent upon the nobility.  The move towards urbanization and industrialization and their inherant added complexity increased the number of these people, and probably improved the standard of living (if not the quality of life) for many.  However, this version of the middle class had virtually none of the trappings of what we consider to be middle class.

In today's middle class, people have many of the same things as the wealthy... Flat panel TVs, A/C, cars, homes that they own (more or less), access to markets, air travel, and, as you point out, health care and personal communications, etc.  The wealthy have more of it, better quality, and undoubtedly access to certain goods and services that the typical middle class does not.  However, if you compare this to the period prior to the industrial revolution, indeed, in some respects, prior to WW II, the situation is very different.  The "middle" had very little access to most of the things that the wealthy (or nobility) had.  Their lives had much more in common with the working poor than with the wealthy.  Non-farm home ownership, auto ownership, and most of the other trappings of what we commonly think of as a "middle class" lifestyle really exploded on the scene after WW II.   And it was funded with cheap fossil fuels that provided enough of an energy surplus to allow a vast middle class to actually separate itself from the working poor and adopt a lifestyle that really was more in the middle between the rich and the poor.  Absent this energy surplus, the "middle" would be where they historically were, just barely above the poor and light years away from the wealthy.

rhare's picture
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Healthcare junkies..
wmarsden wrote:

On the contrary, we are now paying something like 20% of our wealth for health care which has become shockingly effective at keeping us from dying.

While this is a common belief, I'm not so sure that life expectancy gains are very related to our ever growing health care costs.   Access to clean water, food, and basic trauma care have done far more.  I believe we throw a lot of money at health care for very little return.  Other than trauma and basic dental cleanings, and OTC drugs, I don't believe most people would notice a significant change in their life expectancy if their was no other care available.  We have been trained to go the the doctor for every ache and pain and that we need the latest greatest drug or we will die!

It's why I put health care way down on the list of important things.  A good catastrophic high deductible plan to cover unlikely but large events and I have little worry.    Unfortunately we are trained we have to have it all, the latest and greatest drugs, diagnostic techniques and tests, and it all should be covered for everyone with no concern for costs or resource limitations.  It's insane....

No one sees the trade offs.   What choice would you make:

  • $300,000 ($4k/yr * 75 years) to spend and have fun, or
  • An extra 5 years of life potentially in a nursing home, hospital, potentially incapacitated - but most likely with failing eyes, joints, and other assorted old age ailments.

I know I would take the money, put 1/3 into catastrophic trauma insurance to age 70, and spend the rest enjoying life now!  It may actually be much more than $300,000, since I don't think the $4k/yr figure I found includes the extra $250,000 for each of us in unfunded Medicare liability.

Arthur Robey's picture
Arthur Robey
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My ego and the WC.

I sidestep the whole class thingy.

I collect grade A women. Naturely they would not glance at me if they are in fine fettle.

However, when they fall on hard times I scoop them up.

Here is the deal. I husband them to back to strength and when they are fighting fit and ready for the big bad world, off they go. What do I get out of it? A whole crop of grade A children, and a sound network of females who take me in (and get me to do things around the house) whenever I am in town. (And yes, I do support my children financially)

The down side is that I need to be emotionaly strong. It is so hard letting the little critters go. I do get quite attached to them.

And the WC? (Dunny, for the less coy Australians). That has been the single most effective life extending agent ever invented. The flushing toilet. Who ever would have picked it? Pretty obvious in hind sight.

All Hail John Crapper.

http://www.huliq.com/8059/90898/thomas-crapper-day-he-did-not-invent-toilet

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We need to redefine what it

We need to redefine what it means to be middle class and what it means to be comfortable and happy.

What has developed in America is this very rigid system where everyone is expected to provide monthly payments of various kinds in order to survive. Each month, we are expected to pay:

Rent/mortgage
Car payments
Insurance payments (health and home)
Cell phone payments
Utilities
etc. etc.

All of this is predicted on people having regular, non-stop income. As someone who has only once held a full-time "day job" in my entire life (right out of college), I always found it odd that our entire societal structure was organized around people paying things ridigly by the month.

There's no room to, for example, go to your mortgage lender and ask for a fluid system of payments that might give some leeway for up and down income fluxuations. The bottom line is, you are tied to your job and going on a sabbatical or otherwise taking a break isn't very easy (unless you have a job that include "sabbaticals").

I know people who gave up all material wealth to go volunteer in an ashram. There was a lovely yoga teacher I had in Los Angeles who was an older woman, very involved with the transition movement, who owned almost nothing and was supported 100% by the yoga ashram. She seemed very happy and well-adjusted.

As things break down I expect the monthly payments system to be one of the first casualties, and I wonder how large apartment complexes are going to deal with a sudden inability of most of their tenants to pay for rent each month on time. Will they do mass evictions? Or have to work with tenants? Or go out of business? Will people become squatters in their apartments?

Poet's picture
Poet
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I Thought These Were Rather Modest Criteria...

I feel that the criteria listed are rather modest expectations for a real middle class American family lifestyle with up to two income earners! (I believe it would also apply to Australia, New Zealand. Western Europe, etc.)

Y'know, people who don't necessarily spend or do all those things, but could afford it.

  • Like health and dental insurance, braces for kids.
  • Like being able to replace one home appliance or television, or computer/notebook per year. (Not one each.)
  • Like buying "gently used" (pre-owned) vehicles every 7 years per spouse. (I didn't mention size or model).
  • Like paying off student loans within 10 years, saving up with one's spouse for a 20% down payment on a house within 10 years, putting away for retirement and for half of kid's college at a public university.
  • Like a one-week vacation once each year or two years, etc. (notice I didn't mention an overseas destination or plane tickets).
  • Like not having to buy second-hand clothes.

If we are to think about whether we can afford to live what is expected of a middle class American lifestyle in the past couple of decades, then we have to think of what the expectations are that such a family can afford and provide and set that benchmark.

As the economy becomes more difficult (as they have over the past many years), we can compare to the previous benchmark, see how many Americans can still fit that definition. Maybe "vehicles" become glorified electric golf carts (like the Smart car) or perhaps a horse-and-wagon team. Maybe "health insurance" becomes being able to afford the town doctor's when little Timmy's ill rather than resorting to home remedies only, or affording a visit to the local dentist's when you have a toothache is "dental insurance" rather than resorting to whiskey and a strong-armed friend with pliers. But the financial resources distinction will remain, separating the working poor or lower middle class from what is considered the solidly middle class.

But I still think the criteria are rather modest. Ten years ago, GM's assembly line employees used to be able to afford the middle class American family lifestyle. The old-timers who still have GM jobs still can. Same with most teachers and nurses with several years of tenure.

But semantics aside, just look at the criteria or the money needed to afford them. Are you (or would you be) able to meet them all? If not, then maybe you are not middle class.

In fact, I suspect many who consider themselves to be economically middle class, but are brave enough to answer the question, would have to admit as I have, "No."

P.S. - Travlin, thank you for bringing up Elizabeth Warren. (Especially the video: Must watch!) Nickbert, while I do like Denny's and my wife and I have gone on occasion for a weekend breakfast (I am partial to the steak and eggs), I would like to say that the Olive Garden, Cheesecake Factory, P.F. Chang's, and Claim Jumper are superior.

Poet

 

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Poet
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I Think This Is A "Must Watch" Of Elizabeth Warren

I think this is a "Must Watch" of Elizabeth Warren. The data presented is just fascinating.

Real income with women in the work force, what middle class families really spend money on, bankruptcies more common, and more...

Note: If you want to skip the long introduction, click below instead (opens in a new browser window):
http://www.youtube.com/watch?feature=player_detailpage&v=akVL7QY0S8A#t=386s

Hat tip to Travlin for bringing it up!!

Poet

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Adam Smith’s quest for

Adam Smith’s quest for egalitarian distribution of wealth and mobility was based on the premise that unregulated free markets and capitalism were the answer to the conundrum of wealth and privilege locked up in 18th century landed nobility.

We can recognize now that this was and is false.

One of the significant identifying metrics of what is to be middle class is the notion that this was meant to be a transition state, a purgatory of sorts, as some and hopefully most, if desire were to exceed ambition, could secure passage to upper class status after taking advantage of the principles of mobility, and using grit, determination, and hard work elevate themselves (bootstrapping, in the vernacular) to a higher position. And if they choose not to participate, as mobility is in fact optional and dependent on the individual, then a comfortable and sustainable life awaited those who pride family and other values over risk taking, asking only a modicum of hard work in return. And if they choose to do nothing, than the venial sin of the lower class would await. Middle class is not about how much we consume and of what brands, but of the potential, realized or not, that greener fields await and are possible for those that desire (and want to work for it).

These simple definitions are now cast asunder, with a declining middle class, as any most any measure of data will show. Declining income, declining wealth, declining standard of living, declining purchasing power, and declining savings. But increasing lifespan, and of course increasing debt. Increasing hours in the work week, increasing wage earners per household. Increasing healthcare costs. The zealots wave their placards. Privatize everything. Let the free markets work. Exercise free will, liberty and responsibility.

Adam Smith’s bill of goods now fallow, has led us full circle to a world where once again the wealth is in the hands of a few, and mobility for the masses is all but extinguished. The process of this lengthy and much delayed cycle is as inexorable as it is repeatable, it is not the domain of excessive government intervention, it is not a crisis of monetary system, it is the artifact of a well known and perennially denied truth.

And yet the blood boils accompanied by the shrill and incessant admonishment that this is a morals problem, a problem of consumption, a problem of too much government or too little oil, a problem of excessive regulation, a problem of excessive taxation. If only they would remove the  __________ (insert slogan of choice) then all would be well. If only we could reinstate the good old days, when men recognized liberty, when real men were free. But nobody seems to know exactly when the goods old days actually were, any period subjected to close scrutiny was even worse, much worse, than today.

And those held unaccountable to history spin yarns and prosthelytize their fiction.

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bj-brown
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That's a little affluent for my 50's middle class

Three things I'd like to correct re mid dle class of the past

1) We shared a car, we ate out once a month, we didn't have cable TV. cell phones, etc

2) The reason housewives didn't work outside the home in 1950 was because housework was a full time job with 3-4 kids.  No dishwasher, no clothes drier (hanging them out in DEC is really fun.  My mom had an old washer with a hand crank wringer try that some time.  We planted a huge garden and canned/froze tons of food. So now I work at a comfortable, challenging desk job so that I can have these labor saving devices in my home.  If you men had been a middle class housewife in 1950, you'd be glad to trade the hard work for a nice cushy professional job. We did NOT go to work to keep a middle class life style, we traded up in the world.  The upper middle class, do-nothing trophy housewife portrayed in sitcoms of the late 50's and early 60's was a media created aberation. 

3)  We also ate real food in the 50's -- not McDonalds.  We played outdoors instead of watching TV 5-6 hrs a day.  No wonder health care costs are rising.  Obese, out of shape couch potatoes COST A LOT to keep alive (it would be a lie to say keep healthy, because they are not.) 

So some gains and some losses. 

That said, when I first went to work, I could afford all those things you mentioned, except no kids yet.  Every year, it gets harder and harder to keep up, and like you we don't waste a lot. 

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WTF

This discussion really ticks me off.  More talk about class - like the survey earlier this year.   WTF does any of this discussion have to do with "What Should I Do?"   What is it about discussing "class" that intrigues you people? 

After reading this article, is anyone better prepared to meet the physical, mental and spiritual challenges of the near future with this discussion?  Really I want to know.

Furthermore, look at what criteria you are measuring yourselves against.  It is totally friggin' meaningless.  With the way the world is changing, it is a total illusion.  Here, you tell me what friggin class Im in using your criteria...

  1. Income:  Zero - I quit a 6 figure job to pay off my debt and make prepare my homestead and family for a very rough future.  I have a BS and a MS in engineering. At one time, I had a 7 figure net worth.   I quit for many reasons but the main one is that money is meaningless.  It is just keystrokes.
  2. Reasonable health insurance/health care: Screw health care and health insurance.  I tried to get health care but I had to bare my finances to the State Family services.  Aint gonna happen.  We eat right using the wisdom of traditional diets. I  work safe.  I exercise daily.   Im looking for catastrophic insurance but even that is a charlie foxtrot.
  3. Reasonable dental insurance/dental care for your family.  See above and add flossing daily, brushing twice daily and no sweets. 
  4. Paid off all student loans within 10 years of graduating college:  Yeah that and $80K in medical debt but within 5 years after college.  I also poached and dumpster dived for food.
  5. Savings for retirement:  Everyone one of us is going to work until we are dead.  Get over it.   My savings for retirement are the materials, skills and equipment to have a sustainable, low input greenhouse/garden/orchard that produces a years worth of food, a rainwater collection system, 4Kw off grid pv system, a shop tools up to maintain equipment, gather 10 cords of wood, harvest an elk each year, a deer a year, enough pm buried in the wild frontier to pay for my daughter's education and enough hens to keep me in eggs. 
  6. Savings for both short- and intermediate-term goals:  see above.
  7. Savings for long-term goals: See above
  8. Kids' stuff: We buy all clothes 2nd hand.  The kid has a tree house, chickens, a dog and garden to play with.
  9. A family vacation for a week, at least once every year or two; a family vacation for a week at least 2,000 miles away, at least once every 5 years:  2000 miles away, WTF?  We can drive an hour in any direction to the most beautiful mountains in the lower 48.  We often do to fish, hunt, gather mushrooms and berries.  Ive got a world class trout stream just 5 miles away.  Everyday is a vacation when you love what you do.
  10. Taking the family out to a decent restaurant (not Denny's) at least once per week:  Screw restaurants.  I have better food coming out of the garden, the greenhouse and the coop.  I get raw milk from a local dairy - it's illegal but it is better for us.  Last time I went to a restaurant - I vowed never to go back.  I take along nuts, dried fruit and jerky when I travel.   I would eat the dirt out of my raised beds before I eat restaurant food.  I dont even feed that crap to my chickens.
  11. Some new clothes and shoes each year - no need to second-hand clothes.  Second hand clothes are better.  Better quality for the price if you know what brands to look for.  Already shrunk.  Already soft and worn in.  Just clean them and they are like the ones in your closet.  When I do buy new like socks, shoes and underwear, I buy quality, natural fibers  that last.  I wash them on gentle cycle with gentle detergents.   I have boots that are 20 years old.  I buy quality and take care of them. 
  12. Debt-free except mortgage: Screw debt.  That is what enslaves you.  

I don't get the class thing.  Not at all.  When you label someone, you negate them.   You fit them into a neat little compartment that helps your small, closed mind understand them.   And, that goes for labeling your self, as well.

 

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Travlin
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A broader perspective
mooselick7 wrote:

This discussion really ticks me off.  More talk about class - like the survey earlier this year.   WTF does any of this discussion have to do with "What Should I Do?"   What is it about discussing "class" that intrigues you people? 

Mooselick

I understand what you’re saying, but keep in mind that CM.com has a broader viewpoint than survivalist forums.  The first E is the economy, and the slow destruction of the middle class we are experiencing validates what Chris has been saying for years.  This is the proof for people who need convincing.  This deterioration of living standards for the backbone of the USA has become a very personal thing, and it is relevant to our understanding of what is happening and how things may develop.

Travlin 

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Survivalism?

Mooselick,

+1       Seems we are living parallel lives. Into detail.

Travlin wrote:

 a broader viewpoint than survivalist forums. 

This way of living has nothing to do with survivalism. Neither with economy (perhaps only local) and it certainly cannot be defined in any class. It is just what it is: a way of living. Most of us just hate being told what to do.

Regards, DJ

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What to do?

Well, first you have to analyze the situation.  Hence the discussion around "middle class" and affluence.  Once we identify the trend we can decide what to do about it.

As we see so clearly in the responses: 

--It's become harder and harder to maintain what my parents called a middle class lifestyle over the last 50 years.  The US grew and prospered as wealth gravitated toward the middle.  It's been re-distrubuted towards the top again in the last 20 years and the results are not pretty. 
--Part of the problem is that we've moved the goal posts in the middle of the game and most players didn't notice.  As a society, we clearly spend more today on "cheap garbage" and borrow for useless luxeries.  My grandparents thought that central heating, indoor plumbing, childred finishing high school, and a car that ran were middle class.  Fresh oranges were a luxury.  Now I hear complaints about the quality of fresh fruits and vegtables in Chigaco in Dec.  Give me a break.  No middle class mid-westerner expected fresh strawberrien in Dec in 1950.

So if two trends are causing the problems, then we need to work both fronts to reverse the decline - hence this discussion.

While your response will strike most in this forum as extreme, I will admit that I have a total collapse contingency plan that includes cultivating the Morman branch of the family and keeping friendship with the Amish family that bought the farm my ancesters homesteaded. (And yes, I do figure I could trade them protection for food - since they won't shoot starving looters from the dying cities and I could.)

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Whoa...

What's wrong with Dennys?  That's why Lipitor and Zocor were invented.

Aside from that I'm sorta thinking that the current "middle class" mentality is largely responsible for triggering this mess.  Not so sure I want to be numbered in that crowd.

Back to the gardens, the floricanes on our blackberries are so heavy with fruit they are almost on the ground - and that was after aggressive spring tip pruning and cutting last year's canes back to the ground.  Same with the currants.

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Sounds like ...
darbikrash wrote:

And those held unaccountable to history spin yarns and prosthelytize their fiction.

Isn't that kind of like what you are doing?

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More labeling...
Travlin wrote:

I understand what you’re saying, but keep in mind that CM.com has a broader viewpoint than survivalist forums.  The first E is the economy, and the slow destruction of the middle class we are experiencing validates what Chris has been saying for years.  This is the proof for people who need convincing.  This deterioration of living standards for the backbone of the USA has become a very personal thing, and it is relevant to our understanding of what is happening and how things may develop.

Travlin

I am not a survivalist. That is a label.   If all the sudden the world becomes a brighter and happier place of infinite growth and cheap infinite resources, I will still be doing exactly what Im doing. Why?  it is a good investment.  It is rewarding on many personal levels.  It is empowering.  It is enriching.  And it is the right thing to do regardless of what class you are in because the world changes - impermance is a fact of life.

Convincing and Deterioration of living standards:  This is exactly what Im talking about.   You arent in Kansas anymore, Dorothy.  This is the "What Should I Do? section of this site.  So, lets talk about what we should do:

1)  Drop your ideas about living standards based on abundant energy, fiat money and a dumpster environment. Get over it.  If you need convincing, do your own research - it is here.  It is on all over the net.  It is on the news.  Walk up to anyone on the street and they will verify it for you. 

2) Figure out what you need to be comfortable in a future with less energy, renewable energy, alternative methods of exchange and maintaining wealth and sustainable methods to heal the environment. 

3) Get to work manifesting what you need to be comfortable. 

Deterioration of living standards in the US being the backbone of the economy is an effect not a cause.  The deterioration of natural resources, ingenuity, work ethic, trust in leadership, trust in currency and the US agricultural/mining/manufacturing base is relevant to our understanding of what is happening and how things may develop.

 

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defining 'class'

mooselick-

I think in regards to the term 'class' there may be a disparity between us in how some of us perceive the term.  Perhaps its generational or regional.... for me (Gen-X growing up in both urban and rural Alaska) it's simply meant a measure of economic ability and resources.  I imagine some see the term as a social ranking or status symbol, but I very seldom see that (I'm guessing your experience and what you see may be different).  I don't have much use for labels either, but from my perspective this label is just a statistical yardstick more often used in describing economic trends and opportunities in society as a whole.  Or as the editor put it, a way to describe financial self-sufficiency.  The damage done by labels is more a matter of degree, overuse, and intent behind the label rather than their simple existence .

I entirely agree with you on the need to re-align expectations for whatever it means to be 'middle class', 'doing well', or whatever it's going to be called in the post-3E's future.  We need to look at what the past and current expectations are and see what can or should be kept, which are unrealistic and need to be changed or eliminated, and what might need to be added.  I personally expect the expectations regarding retirement, healthcare, travel, discretionary income, and household living arrangements are going to see the biggest changes.

- Nickbert

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what exactly IS "middle class"?

I'm originally from rural Pennsylvania. My paternal grandfather ran a general store until the Depression hit, and it folded due to people being unable to pay back their credit with the store. He started rasing chickens since he figured people would need cheap protien. When things got slightly better he bcame a rural letter carrier.

In any town, a man who ran a general store OR was a sucessful farmer OR was a postman was cosidered "middle class" - only sharecroppers or day laborers or certain factory workers were considered "poor". And my grandparents had a modest woodframe home, a coal furnace (this is PA; they had local coal), a large vegetable plot,  and a hunting rifle. I remember grandpa going out to get a pheasant for dinner, and a freezer full of deer meat he'd dressed himself. Grandma gardened and canned. She repaired things and made them last. They made it themselves, paid cash, bartered or did without.

My maternal grandparents--also in rural PA near Pittsburgh--were better educated and did not hunt and can. They were an engineer and a teacher. He was with Westinghouse but was blackballed for helping unionize a dangerous plant and died soon after from sucessive heart attacks (hear trouble runs in the family, sadly). His wife and older sons took in an elderly aunt who had enough money to help them get through the rationing and poverty of the Depression. They also lived in a very modest home and made things themselves, paid cash, or did without. They were big on community through their local church and eased the pain of a lower standard of living by helping others.

In anyone's estimation, a degreed engineer and a degreed teacher were solidly middle class, yet they did not eat out except at church suppers. Like my paternal grandparents, the family only had one older car that they worked on themselves. Vacations were visits to relatives for both families, with an occasional day trip to Pittsburgh for things like a museum or a circus or a trip to an ice cream parlor. (I still recall the midnight ride on a baby elephant when Ringliing Brothers was unloading their circus train!) So I read the earler so-called description of middle class and said, "Sez who?"

I categorically reject the definition of "middle class" at the start of this thread. But then, I rejected my compatriot's definitions of sucess and fiscal responisbility a long time ago. I was taught to only take out a loan for three things in life: to buy a house that was basic shelter (only when I could afford it! rent until I could afford it!), to buy a "basic transportation" car to get to a job if needed (I've commuted on a bicycle as much as 10 miles each way), and to get credentials (if required) or tools to make money. That's it. I've watched the madness of our society telling us we needed more, more of everything that makes us work ourselves to death as slaves to credit card companies and mortgages that are far beyind our means. I don't need a nice dinner out every week (and not at Denny's) - my grandparents and parents MAYBE went out to eat on anniversaries and nowadays my idea of a date is to go out with my sweetheart for an ice cream at McDonalds - I would rather eat my own cooking and spend my money on my garden. 

I don't NEED  vacations 1,000 miles away or more to feel as if I am a member of the so-called Middle Class. Those are wastes of time and money, and I say this as someone who worked for American Airlines for five years (flight benefits: $200 round-trip ticket to Africa, anyone?)  I was at a convention in San Jose two summers ago and in NY this year. Those trips were for my career and my family. Dad was a teacher and mom was a chemist, but the first time ever went to Disneyworld or Disneyland I was 50. I could have lived without it but one of my kids now lived nearby, so why not go to Epcot for a day?

So am I middle class according to the arbitrary defintion Poet quoted? Proabably not to some: even though I am a degreed engineer and my husband has 32 years doing techincal work with a Fortune 50 Company and clients that are lining up to hire him as a consultant when he retires. Do we save 15% of our income? That depends on your definition of "save" - I consider our sustainable lifestyle investments and our investments in our children as savings for our old age. We can some of our home-grown food and use solar hot water and a clothesline, and have a well (which just tested potable, yay!)  I invested in an airtight woodburning stove, a grain grinder, outdoor cooking facilities (a must in the deep south) and we are about to buy a treadle sewing machine.

One thing I do know. The "middle class" in the next 20 years will look very different than the "middle class" for during the last 20 years.

 

 

 

 

 

 

 

 

 

 

However if being "middle class" means not living paycheck to paycheck unless you have cheap credit...many of us are gonna be scr*wed.

All I can think of is Ferfal's blog and how the reasonably comfortable became the destitute. When the fiat money collapses, will you have a way to make a difference? Either we weather the storm or we do not, but lets; do what we can to up the odds that we will?  Something as simple as a clothesline instead of a dryer can makew a difference. Something as easy as planting a fruit tree adds to the positive momentum. Bulding relationships with neightbors, learning what wild plantsa are edible, making sure you have access to fresh water and a sanitary way to deal with human waste are essential skills.

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rhare wrote: I believe we
rhare wrote:

I believe we throw a lot of money at health care for very little return.  Other than trauma and basic dental cleanings, and OTC drugs, I don't believe most people would notice a significant change in their life expectancy if their was no other care available. 

Sorry, I disagree.  My three year old came down with a perforated bowel and peritonitis and LIVED.  Also, my first childbirth was three days of labor followed by a C-section.  My sister-in-law actually died on the table during labor - her husband was told she was dead and they were going to take her away to try to save the baby - and they saved them both.  I am a very abstemious user of Big Medicine, but when you need it it is a MIRACLE.  Women don't die in childbirth.  Infants don't die from every little bug that passes by.  If only 5% of us are alive today we touch 20 people in our immediate families.

Do not discount the worth of Big Medicine.  It's worth every penny we pay.  Which is why, of course, we pay it.

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Safewrite = psychic?

Think you're going to enjoy our next WSID post  :)

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ao
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wmarsden wrote: My three
wmarsden wrote:

My three year old came down with a perforated bowel and peritonitis and LIVED.  Also, my first childbirth was three days of labor followed by a C-section. 

Just  curious.  How does a 3 year old come down with a perforated bowel? 

Also, what was the cause of the prolonged labor?  Were you using midwife services?

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America's Declining Middle Class

Mooselick7, Safewrite, et al.

I think for me, this is really more about whether a person or family has the financial resources to enjoy all the things that constitute what are perceived to be typical and expected of a middle class American family lifestyle over the past few decades. Maybe they don't eat out because they use the savings for band camp for the kids. Maybe a family doesn't take vacations for a week, once per year, but they enjoy their Harley rides on the weekends. Maybe they don't save for their kids' college, but they sock away 20% to 25% of income for an early retirement. For those who are solidly and indisputably in the middle class, they can afford it if they want. That's my point.

But not everyone can afford it all, obviously. Many are slipping. And that was what I was trying to point out.

Though most people do not meet all of the above criteria - and that includes a lot of us, including me - they are able to get some or most of the "criteria" (or at least are able to meet a good number of personal financial self-sufficiency goals), by choosing wisely on how to spend their precious resources.

Maybe they don't eat out often and when they do, they limit it to Denny's or a church supper. (By the way, I have several co-workers who eat out at every lunch, typically spending $7 per meal. Heck, I used to do that! Shame on me! But note that the median income in my county is $71,601 per household, and $81,260 per family. It was nice for a while when my wife were DINKs.) Or they don't save for a middle class lifestyle in retirement (they plan on being healthy and working into old age, or cashing in the gold they bought at $300 per ounce). Or maybe they don't save for their kids' college education but have lined up practical apprenticeships with friends who are plumbers or carpenters or electricians. Or maybe they will depend on Social Security, or have credit card and debt that will eventually overwhelm them, or they take 20 years to pay off their student loans, and plan on always rent, etc.

But for many in the so-called middle class (whether by the criteria I listed or by other criteria), they are but an illness or divorce away from dropping out. The lecture Elizabeth Warren gave (click here for Youtube video link) really tells how fragile a middle class family existence is.

As Adam (or another CM staffer wrote: "...it a useful exercise for the CM.com community to engage in. How realistic is the dream of financial self-sufficiency for today's society?"

Isn't that why we need to prioritize what's most important to us and prepare for the coming hard times? Isn't the reason we are on this web site and community is because we care about preserving what we can (yes, pun intended) for the years ahead, about building resiliency?

P.S. - I am so glad this thread has generated so much thought, even if we don't all agree. I appreciate your contributions, here and elsewhere. Makes me think, broadens my mind. Thank you.

Poet

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Adam Taggart
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It was I

Poet - 

It was i who wrote that intro. And I think the ensuing discussion here has been as hoped: enlightening and (which I appreciate greatly) respectful.  I'm glad we elevated this post from the forums. Thank you for creating it.

In a few hours, I'm going to post our next What Should I Do? article, written by FerFAL. Think the American middle class is having it rough? Wait until you learn what the Argentinians have been living through since their hyperinflationary collapse in 2001.

Many of the same warning signs that led up to that crisis are blinking brightly on our national dashboad today, serving as sobering reminders that having time to build resiliency now while our systems still function smoothly is a gift not to be squandered.

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Poet
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FerFAL, FerFAL, FerFAL!
Adam wrote:

Poet - 

It was i who wrote that intro. And I think the ensuing discussion here has been as hoped: enlightening and (which I appreciate greatly) respectful.  I'm glad we elevated this post from the forums. Thank you for creating it.

In a few hours, I'm going to post our next What Should I Do? article, written by FerFAL. Think the American middle class is having it rough? Wait until you learn what the Argentinians have been living through since their hyperinflationary collapse in 2001.

Many of the same warning signs that led up to that crisis are blinking brightly on our national dashboad today, serving as sobering reminders that having time to build resiliency now while our systems still function smoothly is a gift not be squandered.

Adam

Thank you for elevating it!

Oh, wow! You got Fernando "FerFAL" Aguirre to contribute! Awesomeness! I've long been a fan of his practical (urban) Argentinian survival blog. Can't wait!

Poet

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Poet wrote: Oh, wow! You got
Poet wrote:

Oh, wow! You got Fernando "FerFAL" Aguirre to contribute! Awesomeness! I've long been a fan of his practical (urban) Argentinian survival blog. Can't wait!

Poet

+10!!  That's great, Adam!!!

Adam wrote:

Many of the same warning signs that led up to that crisis [in Argentina] are blinking brightly on our national dashboad today, serving as sobering reminders that having time to build resiliency now while our systems still function smoothly is a gift not be squandered.

+100!

pinecarr's picture
pinecarr
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Poet wrote: Oh, wow! You got
Poet wrote:

Oh, wow! You got Fernando "FerFAL" Aguirre to contribute! Awesomeness! I've long been a fan of his practical (urban) Argentinian survival blog. Can't wait!

Poet

+10!!  That's great, Adam!!!

Adam wrote:

Many of the same warning signs that led up to that crisis [in Argentina] are blinking brightly on our national dashboad today, serving as sobering reminders that having time to build resiliency now while our systems still function smoothly is a gift not be squandered.

+1000!

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Ferfal rocks!

Now, Ferfal is a fella geared to the "What should I do?" theme.   I will look forward to it!

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I took the child to Disney

I took the child to Disney World and he caught some exotic bug that ate holes in his small intestine.

I most definitely had a midwife and we tried natural childbirth until it was on the verge of killing me.   Childbirth used to kill a LOT of women, but I think people forget that or write it out of their narratives or something.  Quite often the "natural" method = "dead".

This is the thing that bothers me most about when people talk about sustainability.  They are editing away the benefits of Big Medicine.  Yes, I floss my teeth and exercise and eat nutritiously and play outside.  Doesn't mean I don't die in childbirth or our children don't die of things that can be cured with 10 days on a PIC line while the ileus heals.  (Gut wounds kill slowly.)

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wmarsden wrote: First off,
wmarsden wrote:

First off, where I'm coming from: my husband and I are both professionals with advanced degrees and are earnings are in the top 20% of income in the U.S., so I'd say we're a few steps above middle class.

That said, I significantly disagree that "eating at a nice restaurant" once a week is a middle class behavior.  I think that's an astonishing luxury not at all what I recall from my upbringing in the middle class.

Furthermore, you also threw in their the astonishing luxury of not dying from cancer.  Seriously, you think that's a standard of middle class living through-out history?  On the contrary, we are now paying something like 20% of our wealth for health care which has become shockingly effective at keeping us from dying.  Each of us decides every day that we'd like to pay for health care expenditures that are equivalent elements of our budgets to food or housing, for the same reason we pay 20% of our budgets towards housing: there just isn't any other good or services we value as highly as health care.

But the average spending per American is well over $4K/year on health care now.  Do NOT make the mistake that this is a middle class right.  This is an enormous, absolutely UNBELIEAVABLE benefit to us, equivalent of moving out of a cave into Levittown.

-- Wendy

 Wendy,

What the hell is your advanced degree in?  At least 2 word usage errors in those 4 paragraphs!!  Posers trying to get noticed or what?  Seriously, if you can't use good grammer and spelling, don't tell me you have advanced degrees unless they are from Diploma Mill State

[Moderator's note:  This post is a violation of our forum guidelines.  It is an ad hominem attack that does not pass the dinner table test.  Users are expected not to abuse the privelege of anonymity to say things that would not be said in person.  Corrective action with the user has been undertaken.]

 

wmarsden's picture
wmarsden
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I think it's MARVELOUS that

I think it's MARVELOUS that bankruptcies are mostly associated with unexpected catastrophes.  Isn't that what bankruptcy is supposed to be for?  It's a fresh start.   I'm not troubled by bankruptcy being caused by illness or job loss of unexpected family break-up.   It strikes me that bankruptcy is the SOLUTION.  What would she prefer, debtors prison?

Then she gets kind of indignant because people who do not have any of these things befall them do not stay in the middle class, they advance to be more like the wealthy.  Uh, is this BAD?  As someone else pointed out, middle class was ALWAYS the transition area between failure (marrying a drunk, becoming widowed, losing the farm) and success.

I am wondering where in history exists the stable middle class that was NOT affected by illness, death or professional failure.

wmarsden's picture
wmarsden
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Yeah, that was

Yeah, that was embarrassing.  When I read it over it was too late to edit.  :-) 

My advanced degree was not in English.  My husband's advance degree is not at issue. 

Thanks for the spelling flame, though, it's great to raise the conversation to this pinnacle!

mwn560's picture
mwn560
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Posts: 2
Are you middle class?

An excellent article with a lot of great comments!!! Growing up I was told I was middle class, my Mom did not work a job, my parents shared a station wagon. Me and my brothers would would have to ride along to drop Dad off at work, Now it costs me 400.00 a month for cable, internet, and phones. Maybe we spend differently these day. I almost never eat out, but that's because I once worked in a resturant. I think the structure of how people are paid is whats wrong. Some bankers and CEO's make millions at the expense of paying the bank tellers and cashiers less. The corporation wants to deleiver to it's stock holder's the biggist profits they can, which is done by paying the workers as little as possible. Maybe some sort of profit sharing with the workers should be considered.

maceves's picture
maceves
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Posts: 281
The more you have , the

The more you have , the higher that bar is set to decide who is rich (as in richer than you) and who isn’t.  Of course we had a middle class a hundred years ago; they just weren’t as rich as us.

They didn’t have a house full of electric gadgets, but they still liked gadgetry, especially labor saving devices.   Few children had rooms full of toys, but they had some.

The middle class had enough to eat and to invite strangers to the table, and keep a deep pantry.

They owned their homes and generally paid cash for most things.  They could afford to hire someone sometimes, but usually did their own work themselves.  Maybe they did try to impress with the house.

They had decent clean changes of clothes for whatever it was they had to do.   For some, maybe a little extra was invested in the wardrobe.

They had money enough for the doctor and to bury the dead.  They didn’t expect to go to hospitals. They didn’t have gym memberships either; they walked a lot.  Family transportation was more the norm, and it didn’t cost so much.

There was money for family, church, and charity.  Maybe Grandma or Aunt Agnes lived right there in the house, helping in the kitchen and with the children.  Who could send her away?

Maybe because I lived so much of my life outside the U.S., or perhaps because I was raised away from the credit mentality, I would never have calculated middle class in the terms originally set forth here.

I know the middle class is getting carved out, but I was a single parent and then a grandmother head of household for so long, just barely making ends meet from month to month.  Now that the kids are grown and gone I feel a whole lot richer on the same salary.

fandango's picture
fandango
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Posts: 53
DNA

I never really thought about the class situation.  I think my 1/4 Scottish (side) DNA played a big role in money decisons. My husband and I are fairly young and have zero debt (including the house) and various savings acct's.  I really couldn't help but invest/save---my DNA made me do it.  Don't know what the Irish, Dutch, German or Scandanvian parts did for me, but the Scottish side paid off... 

Lucky for me, I found a great husband who could put up with my frugality and my talk of peak oil and prep's.  I've started to dial back the (when the) SHTF talks---sometimes everyone needs a break.Sealed

ralfy's picture
ralfy
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Posts: 60
Worldwide, only around 15

Worldwide, only around 15 pct of human beings earn 10 to 20 dollars a day or more. Costs for various goods, from food to medicine to petrol, are roughly the same as that of the U.S. or higher (esp. petrol). Also, wages are much lower than those of the U.S.

In addition, tax rates in various countries are roughly the same as those of the U.S., but the latter may receive better government service (there are no food stamps or unemployment benefits in some poor countries) and tax cuts.

Finally, the same 15 to 20 pct of the global population is also responsible for over 60 pct of personal consumption.

Given that, I'd say that the middle class consists of those worldwide who receive 10 to 20 dollars a day or more, with a small group earning more than 20 dollars daily and making up the top one percent of the global population. Around 60 pct of the same global population earn only around two dollars daily.

 

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Resources Regarding The Decline Of The American Middle Class

If you are in search of resources for talking points, discussions or e-mails with your friends about the declining American middle class, here are some links:

It's the Inequality, Stupid
Charts and graphs of income and wealth disparities. Also: "A Harvard business prof and a behavioral economist recently asked more than 5,000 Americans how they thought wealth is distributed in the United States. Most thought that it’s more balanced than it actually is. Asked to choose their ideal distribution of wealth, 92% picked one that was even more equitable."
http://motherjones.com/politics/2011/02/income-inequality-in-america-cha...

Disturbing Statistics on the Decline of America's Middle Class
"...a good number to start with is 42,400. That's the total number of factories that the U.S. lost between 2001 and the end of 2009. Put another way, this translates into the outsourcing of 32% of all manufacturing jobs in America."
http://www.dailyfinance.com/2010/10/17/disturbing-statistics-on-the-decl...

War Against The Middle Class
"...the American middle class was created in the space of just a few years by New Deal legislation that established Social Security and other safety-net programs, implemented a highly progressive taxation of income and estates, supported unions, and raised the floor on wages to narrow the wealth and income gap between the upper and lower economic classes."
http://www.presstv.ir/usdetail/167875.html

18 Sobering Facts Which Prove That The Middle Class Is Not Being Included In This "Economic Recovery"
"Even during this time of relative economic stability, the U.S. middle class is still being ripped to shreds.  If there are those among your family and friends that are somehow convinced that the U.S. economy is recovering nicely, you might want want to show them the following 18 very sobering facts...."
http://theeconomiccollapseblog.com/archives/18-sobering-facts-which-prov...

Becoming a Third World Country
"I say 'finish the process,' because we are already most of the way there. What distinguishes the Third World from the privileged industrial minority of the world’s nations? Third World nations import most of their manufactured goods from abroad, while exporting mostly raw materials; that’s been true of the United States for decades now. Third World economies have inadequate domestic capital, and are dependent on loans from abroad; that’s been true of the United States for just about as long."
http://thearchdruidreport.blogspot.com/2010/02/becoming-third-world-coun...

So Long, Middle Class: Dreams of average Americans dashed by taxes, higher costs and little job security
"25 statistics..."
http://www.nypost.com/p/news/opinion/opedcolumnists/so_long_middle_class...

Elizabeth Warren: Lecture on the Dire Straits of the American Middle Class
Some alarming statistics about middle class wages since the 1970s, the effect of women in the workforce, what middle class families spend most of their money on and why they can't get ahead, etc. One fascinating point: Since the late 1990s, more families with children file for bankruptcy each year than file for divorce. You don't hear about it because people hide it from their parents, their siblings, kids, etc.
http://www.youtube.com/watch?feature=player_detailpage&v=akVL7QY0S8A#t=386s

On The Way Down: The Erosion of America's Middle Class
"While America's super-rich congratulate themselves on donating billions to charity, the rest of the country is worse off than ever. Long-term unemployment is rising and millions of Americans are struggling to survive. The gap between rich and poor is wider than ever and the middle class is disappearing."
http://www.spiegel.de/international/world/0,1518,712496,00.html

Poet

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Higher Education And The Middle Class

Various aspects of higher education are under assault, by itself and by outside interests, undermining the future of students and graduate students alike. An in-depth look at a slow death.

Faulty Towers: The Crisis in Higher Education
"A few years ago, when I was still teaching at Yale, I was approached by a student who was interested in going to graduate school. She had her eye on Columbia; did I know someone there she could talk with? I did, an old professor of mine. But when I wrote to arrange the introduction, he refused to even meet with her. I won’t talk to students about graduate school anymore,' he explained. 'Going to grad school’s a suicide mission.'"
http://www.thenation.com/article/160410/faulty-towers-crisis-higher-education?page=full

Poet

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1325
Higher education costs
Poet wrote:

Various aspects of higher education are under assault, by itself and by outside interests, undermining the future of students and graduate students alike.

The NIA, Petershiff and Ron Paul all have a bit of a different take on the problem in higher education. Tongue out Poet, I just have to keep providing the Libertarian viewpoint to your Progressive view points to keep things in balance. Wink

Peter Schiff and Ron Paul have both talked about the problems with government guaranteed student loans in high education driving up the costs of education.

 

 

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Subsidies Lead to Inefficiency And Waste

Rhare

That's fine. I agree with some the libertarian view, too. Subsidizing widespread, needs-based (rather than merit-based) for public education is the same as offering money for military contractors or providing an increasing budget for bureaucrats. I think everyone who has a point, has a point. The truth is usually somewhere in the middle.

Poet

rhare wrote:
Poet wrote:

Various aspects of higher education are under assault, by itself and by outside interests, undermining the future of students and graduate students alike.

The NIA, Petershiff and Ron Paul all have a bit of a different take on the problem in higher education. Tongue out Poet, I just have to keep providing the Libertarian viewpoint to your Progressive view points to keep things in balance. Wink

Peter Schiff and Ron Paul have both talked about the problems with government guaranteed student loans in high education driving up the costs of education.

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
In Times Of No Growth, The Young Face Great Challenges, Too

There just aren't enough good-paying jobs out there.

In Italy, they're called bamboccioni or "big babies" - 59% of those 18 to 34 still live at home with parents.

The same can be said for the U.S. - 85% of 2011 college grads said they'd move back in with parents and 44% of Baby Boomer women report helping adult children financially. A Rutgers University study of a nationally representative sample of over 900 young people who graduated college between 2006 and 2010 found only 53% had full time jobs.

In Spain, they young are protesting...
http://www.independent.co.uk/news/world/europe/down-but-not-out-the-plig...

Poet

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
The Middle-Class Trapdoor

Circumstances change. Countries default or undergo austerity.

The Middle-Class Trapdoor
"When you fall through the trapdoor you tend to lose your belief in capitalist values like hard work and saving. Many Americans still believe that if you work hard and save, by the age of 50 you could be a millionaire. But in Argentina if you worked hard and saved, then at 50 you could be destitute. In Congo, you could be dead of cholera."
http://www.ft.com/cms/s/2/7accf8b0-a785-11e0-beda-00144feabdc0.html#axzz...

Poet

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