Is the “Middle Class” disappearing in America? (1 Viewer)

[Jay Taylor]

I wonder if Mark hit on something by mentioning the massive debt that so many have acquired. Perhaps it only appears that the middle class is not shrinking because new neighborhoods with big beautiful homes continue to be developed in the suburbs at a decent rate.

A statistician may reveal that a significant percentage of families that buy those homes have very little disposable income. Many are living beyond their means with every major and even not so major purchase being made with borrowed money. Like the Lending Tree commercial with the guy showing his beautiful home, driving a lawn mower and stating “I’m in debt up to my eyeballs!”

http://www.lendingtree.com/

Perhaps the size of our middle class is only an illusion.

 

[RobertR]

Of course. So should any incompetent employee, from top to bottom. That's an issue of competent management, not income disparity.

 

[MarkHastings]

Bingo!

As I mentioned, I don't have any debt and live within my means...I consider myself middle class, but all of my friends and family consider me rich because I'm not struggling. I HARDLY consider myself even CLOSE to being rich, so there's definitely a lot of truth in peoples perceptions on what the class system is.

I mean, "no debt" automatically = rich??????

 

[Paul_Sjordal]

The ranks of the poor are indeed increasing, the middle class is shrinking, and the median income is lowering. The effect is probably too small to notice just from looking around, but it is identifiable in the demographics.

This has been happening since Reagan and reversed only briefly during the Clinton administration.

Donald Trump can talk all he wants, but the only thing that will reverse this phenomenon is something that no voter would support: removing all the Republican tax cuts on the rich and spending money on government programs again. Since the people don't want to do that, it would be political suicide for any politician to attempt it. There's really nothing that can be done about it.

As if that isn't bad enough, our fiscal policy is categorically insane when it comes to keeping jobs at home. The Republican congress passed a law that actually rewards companies if they ship jobs overseas. It's one thing to argue that the government shouldn't take extra steps to keep jobs at home, but it's quite another spend taxpayer dollars to ship jobs out of the country.

So our middle class will simply shrink until our way of life isn't supportable anymore, then we can become more like Mexico over the course of the next century or so. Enjoy your tax cuts while you can.

 

[Glenn Overholt]

I think it does Mark. Lets put this another way. If you added up all of your assets and subtracted all of your credit card/mort. etc debt, how far in the whole are you?

No, I don't mean you Mark, but if you end up with less than say $10k in assets, I'd say you're poor, even you're in a house that sits on a 1 acre plot.

Also, and this goes way back, I was once told that I'm supposed to be paying 1/4 of my income on housing. I have never made that much. I think that anybody that is doing that can probably consider themselves rich.

I think that the poverty level is just based on an annual income, but this has probably been rolled into what a family making that much has in assets as well, but I think it's $15k, and not ten. I think rich is probably over $100k.

So, everybody can get their calculators out now, and find out just how much in debt (poor) you are!

Glenn

 

[Buzz Foster]

What I find troubling is that American corporations outsource jobs to avoid paying living wages and benefits to Americans, yet expect those same Americans to shell out big bucks for their products. Huffy Bicycles have been in the news about this lately. I mean, from a moral perspective, this is just wrong. Cheap Chinese labor tends to be of the sweatshop variety, and environmental laws are quite lax in places like that. The retirement plan is death. You die, you don't have to work any more.

Americans should not have to compete with that type of labor. Anything outsourced for cheap labor and then shipped back tothe U.S. should be subject to a tariff that makes it more expensive to outsource than to stay home. The original idea of free trade alliances was supposed to make our products more available to foreign markets. But what has happened is that few in those foreign markets can afford our products, and the products that are now produced in those places are shipped home and sold for the same price as they were before.

This is, plain and simply, wrong.

 

[MarkHastings]

Paul, while I agree on your points, let's talk about the attitudes of the poor. From my perspective (which could be wrong) it seems like years ago (i.e. 50's and 60's) the poor people used to work hard to maintain their lifestyle and did everything they could to improve their lifestyle. But now, it seems like the poor don't want to work hard anymore. Instead of improving their lifestyle, they are trying to find ways to exploit it. They try to find the easiest ways to get by and don't want to do anymore than they have to.

Perhaps this is (as you say) because the opportunities aren't there anymore (like they were back in the 50's), but there is definitely something to be said about people just being down right lazy and giving up instead of helping themselves out.

It's this whole perception of "I can't, so I won't" attitude that you never really saw before.

I hope I didn't offend anyone with the above remarks. Again, it's just my perspective and may not be correct. But I also see the same trends in middle class people as well. I'm sure you've all seen and heard it before....someone gets fired or laid off and they'd rather stay unemployed instead of settling for a harder job. No one wants to work harder than they have to. The thought of having to work longer hours for less pay is so foreign to use that we will actually pass these jobs up and stay unemployed.Hmmm, what do they consider "Housing"? - Just the mortgage or do you have to include utilities, insurance, taxes, condo fees (if applicable), and such as well? If we're just going on mortgage, mine is 30% of my salary, but if you had to include all the others, then I'm WAYYYYYY off.

 

[MarkHastings]

Which goes to my point about the poor in the US. Most poor people wouldn't work in a sweatshop environment. Poor people don't like to work hard. That's why you can't get cheap labor in America. There's nobody here who will do it.

We bitch about it all the time here. Take the minimum wage employees at the fast food places and the B&M "CompUSA/Best Buy" type of places. Not even people making minimum wage are all that effective, so you take a company that wants to produce a cheap product, what do they do?

Do they pay minimum wage salary to a production line that will be full of lazy people who don't want to work...do they pay them more money as an incentive to work (making profits dwindle to practically nothing)...or do they go overseas where people are willing to do the work for cheap?

I don't blame the business in that respect. If no one in America is willing to do the work, then where else are the businesses going to go?

 

[RobertR]

This table doesn't show that. The percentage of what the government classifies as poor is less than it was in 1980. I don't believe at all that raising taxes will make me more prosperous, or lessen the ranks of the poor to a significant degree.

 

[mylan]

Housing includes utilities, condo/homeowners fees, taxes, etc. If you are at 30% already, then add marriage, kids, increased insurance and other associated costs that come with a family then you too will change your "tune" a bit. I'm not saying you are wrong about your comments, i've seen the poor quit, as you describe but I have also seen unforseen expenses (medical, etc.) take a middle class family and just wipe out their savings and put them seriouly in debt to the point that recovery is almost out of the question.

 

[MarkHastings]

So does this mean I am the only one who realizes this??? I know I'd never be able to afford my condo and have a family at the same time, so guess what, I'm not looking for a family while I am in this condo. So then why are people getting married and having kids when they can't afford to?

I've given up on looking for a girlfriend and a family because I know I couldn't afford it. That's my "tune" and that's what bugs the crap out of me about everyones bitching. My brother (again) wanted to buy a house and worked out all the expenses until he realized he never calculated for their 'expected' child. He lost the house and he and my sis-in-law are bitching about not having any money (or being able to afford a home).

I guess I'm in a league of my own, but if they want a house and can't afford one, why are they having a kid????

Why would anyone raise a family without being able to afford all of these things? Why do they do it? Why do they buy houses (they can barely afford) without thinking about the future and what expenses will come down the road????

This is why I went into a condo. I wanted a house BADLY, and while I could have afforded one, it wouldn't have left me with money for future "issues". I went into the condo because this allows me to have that extra cash for emergencies.

I did realize that the condo wouldn't allow me to have a family, so I did what most people DON'T do and I gave up on the family idea. I realized I can't have one, so I'm not going to put myself into a financially compromised position by getting one.

But again, no one else seems to do it this way. My brother does not want to settle for anything less than a big home....Everyone else buys a home KNOWING that it's going to be tough to afford it and they all say the same thing "We're going to have to buckle down" - I mean WHY are they going INTO a home this way? Going into a home knowing that it's going to immediately be rough, is just going to make future things even harder.

But that is the problem with the middle class. No one seems to think about debt as something they have to pay off. They think "We'll pay it off later" / "We'll make ends meet" - thinking that they'll be able to save money for it.

My brother says this all the time "Once she (my sis-in-law) gets into nursing, we'll be all set". Now that's fine and all, but what did they do in the meantime? They got pregnant... Ummm, how does this now help?

Does everyone seem to forget all the unexpected expenses that occur throughout the years? Does that even stop them from having yet another kid? from buying another car, from going on yet another vacation? Nah, they'd rather ignore the debt and just keep adding to it, forcing themselves into the poor house.

---Why does it seem like I'm the only one who thinks?

 

[drobbins]

I hadn't heard that Huffy was back in the news. I was hired in as a manufacturing engineer 1 month before Huffy announced that it was shutting down it's operations in Ohio. My job was to learn the processes, help move the equipment to Mississippi, and then train the new workforce. The Mississippi factory was open 9 months before they moved all manufacturing to China. In Huffy's defence I will say that the union workers in Ohio were not your stereo typed lazy workers. They worked their tail off. Also Huffy's move overseas was the only option that it had to stay alive as a company. Wal-Mart told Huffy what it would pay for a bicycle. Wal-Mart used it's size to get these low prices for it's customers. Remember that all these products manufactured overseas, you are probably buying because of the low price. How many of you would pay $50.00 - $100.00 more for a bicycle just because it was 100% made in the USA? Yes companies are profiting from cheap labor overseas, but the customers are also able to buy more for less. I saw a show on TV on China & Wal-Mart. I believe that it said that the majority of the product leaving China's busiest port was for Wal-Mart. When you talk about sweatshops over seas, think about who is buying the product and why.

 

[Patrick Sun]

It's weird, but somehow the phenomena of producing offspring can motivate you much more in terms of becoming more proactive in seeking job advancement, income increases, seizing upon real estate opportunities than just saving for a rainy day as a single responsible person. I've seen it with my own eyes.

 

[george kaplan]

Mark,

Your impression of the poor as lazy, is nothing more than stereotypes. You certainly can not have seen any more than the tiniest fraction of poor people. Most of them are almost certainly working harder, for less, than most of us on this board. This myth of the welfare queen comes from taking one example, and assuming it must be representative. It isn't. There are certainly more lazy poor people than lazy rich people, but that is only because there are so many more poor people than rich people. As a percentage, there are just as many lazy rich people as poor people. Many rich people work long hours, and in that sense they work hard, but they sure as hell aren't doing physical labor, with very few exceptions (e.g., pro sports).

If you have any scientific evidence about the laziness of poor people as you assert, please share it.

 

[Chu Gai]

With respect to the vanishing middle class, what metric and normalization does Trump use to define it that allows for various comparisons to be made across the decades?

Buzz, how do you feel about the foreign jobs that are outsourced here?

 

[Holadem]

IIRC correctly, Mark is from, and lives in the richest county in the US (and by extension, one of the richest on the planet). His opinions about poverty are therefore irrelevant .

--
H

 

[Chris Lockwood]

> So then why are people getting married and having kids when they can't afford to?

I've wondered about that, too. I guess people don't realize how expensive kids can be.

A better question is: why do they keep having more kids if they can barely support the first?

I notice when people talk about this they almost always make themselves sound like victims, as if the fact that they had kids they couldn't support just happened through no fault of their own... like they woke up one day & there were 3 kids in the house.

 

[MarkHastings]

Yeah, that's why I went off on that tangent. No offense to mylan, but I whenever I try to explain things to people, they always pull the old "Well, wait until YOU have kids and see how hard it is!!" - I agree with you Chris, they make it sound like their kids are the reason they are finding it hard to make ends meet - and while this is often true, it makes no sense to me why they keep having kids (or any in the first place). Are people really that dumb to not understand how expensive children are? Or do they just not care? I assume they just don't care about the expenses until it hits them hard. Then they prefer to blame everything else and not the underlying reason that they chose to ignore the facts.

A good friend of mine is always complaining about money. We were in a band together and we got into an almost "friendship ending" argument because each member was getting $100 each and I suggested that the 'left over' cash (which was about $200) be put into our fund for band related stuff. She got all pissed and wanted it split between the band members. It would have only been about $33 each and I tried to tell her that it would be better to put that $200 back into the band since the extra $33 (each) was nothing compared to the expenses the band was looking at in the future . These expenses would have been covered with this $200. She got all pissed and started telling me how hard it was for her to make ends meet (now that she had a kid and wasn't working, etc.) and how she'd love to have this extra cash so she could buy her husband a Christmas gift (blah blah blah) - She basically gave me the sob story. Anyways, only a few months later, she's telling me that they are trying to have another kid!!!!! Ummm, wasn't it just last Christmas you were bitching about $33 and how the lack of that $33 would make it difficult for you to buy presents??

So why is she planning another kid???? Why was she willing to take the $33 instead of putting the $200 into the band fund? She knew that the band was looking at a $200 bill in the future and needed the $$, but just like most Americans do with money; spend the now available cash and worry about the future when it comes (and how you're going to afford it).

It's this whole "I'll pay for it in the future" mentality that is killing the middle class. If you can't afford it NOW, how are you going to afford it in the future??? Why do we think that we'll be better off in the future??

 

[ThomasC]

*ahem*...the pleasurable process of conception with no protection (ooh, that rhymes!) and little or no regard for the consequences.

 

[Jeff Gatie]

Mark,

I warned you before about chicks and bands. Now you've gotten involved in a band with a pregnant chick? You have no one to blame but yourself.