My seven-year-old posed this question the other day, totally out the blue:
“So, I’m still wondering…are we rich or are we poor?”
I told him we were neither. “We’re in the middle.” His younger brother excitedly exclaimed, “We’re in the middle!” I thought to myself, actually we’re poor…but that’s not something a mother should tell her kids. Actually, we’re not poor…at least not compared to many, many people in this world. It’s all relative. Everything is relative. But I feel poor. We live in one of the most expensive areas in the country, which has a lot to do with the financial frustration I am feeling. Our dollars do not go far here…not far at all. If we had these same dollars and were living somewhere in the Midwest, or in Texas or Utah (in almost any “red” state, really), I would feel much better off. We would, in fact, be much better off. But we’re not. We are here, not because we want to be, but rather because the recession hit us personally in July 2008 and began a chain of events that are still unfolding for our family…the impact of which we will continue to feel for years to come.
I came across this U.S. News article (“7 Stressors Sapping the Middle Class”) the day after the above exchange with my boy. There has been a lot of talk in the past several years about the “shrinking middle class.” It’s a favorite line of politicians who want people to feel disgruntled and then look to them [the politicians] to help make things better. Well, I feel disgruntled all right, but I blame the politicians.
Politicians want to help, with dozens of proposals in Washington and state capitals to create jobs, subsidize living costs, and prove that elected officials care. But most governments are running out of money, and many of the political proposals are hollow, vote-seeking gestures. Americans, meanwhile, are relying more on themselves by cutting spending, saving more, changing their lifestyles, and re-evaluating their careers.”
Democrats have this funny way of thinking that if they bring enough people down from the upper class, you know…spread their wealth around a bit…it will preserve a larger middle class. In reality, though, the more these politicians do to “help” the middle class, the worse off everyone becomes. I believe the middle class is shrinking (or at least the classically defined middle class lifestyle), and I believe that overly aggressive government intervention in the economy is largely to blame. And I’m not happy about it.
For the past 40 or 50 years, Americans have lived by a series of unofficial tenets: A good education guarantees a good job, hard work will bring prosperity, and 40 years of 40-hour-a-week work earns a comfortable retirement. Then, maybe; now, not so much.”
I have long believed these very things, but sadly, I have lately had cause to rethink a lot of things I used to “know.” I have a good education. My husband has a very good education. But a good education does not guarantee a good job. It doesn’t guarantee anything. Thankfully, my husband has a good job; frankly, I am grateful he has a job at all in this economy (he went nearly five months without one back in 2008). We are still paying for his very good education, and will be for a very long time. What I wonder is, is the price of a good education financially worth it anymore? “College costs have risen about 43 percent since 1990, nearly twice the rise in median income.” At this rate, at some point it will stop making sense financially…if it hasn’t already…to pay for an education that cannot be reasonably justified by future income potential, won’t it? “A typical family with two kids should sock away about $4,200 per year to pay for college. That’s a tall order.” That is a tall order, especially when parents are still paying for their own educations…sometimes decades post graduation. Even those who snag great jobs with high salaries then get taxed through the nose…and that is only going to get worse. After all, they need to share theirs with those beneath them, according to Democrats anyway. Well, I don’t want theirs…I just want more jobs to go around. I want a viable economy that grows and provides prolific opportunity for all. I want the government to get the hell out of the way so we can achieve more on our own. I want people to be able to spend money on more than just debt payments (mortgages, student loans), rent and bills. Spending is what fuels economic growth after all…but you must have money before you can spend it (or at least you should, anyway). But either because they don’t have any money (or a job) or becuase they’re simply scared, people aren’t spending right now; things are stagnant.
…the housing bust is helping bring prices back down to manageable levels for many families, one break for those who escape the recession with their household finances more or less intact.”
We were hoping for that “break.” But the key is, “those who escape the recession with their household finances more or less intact.” How many people actually fall into this category, I wonder? From the time we first moved to Las Vegas, in the Spring of 2005, we hoped that the housing market would crash, that the bubble would burst. We’re not perfect, but we felt that we had made pretty good choices, that we had done the right things. We had only one car for the first six years of our marriage (people were surprised to find out that we were a “one car family” with two kids). We rented for four years (in Las Vegas; in all, we’ve been renting for almost nine) becuase it seemed irresponsible for us to buy in that market at the time. My husband started with a good job right out of school…not a “top” one, but certainly a good one…and our income steadily increased over the next three years. We were gradually, very gradually, moving up. We were middle class. And we were patiently waiting for the housing market to adjust itself so we could finally, responsibly, buy a home…which our income should have been able to support. What we didn’t anticipate was that with the inevitable correction in the housing market would come this nasty recession that would tag us to be among its first casualties. It doesn’t matter how affordable homes become if you’re out of a job and out of an income…you can’t afford anything.
We all know about keeping up with the Joneses. Now, the Great Recession and the jobless recovery have introduced a new socioeconomic phenomenon: slip-sliding with the Smiths.”
I know far too many people who have lost jobs, or who have accepted drastic pay cuts in order to keep jobs, and every one of them have good or great educations and fantastic resumes. Most of them are professionals. Off the top of my head I can think of two MBAs, an accountant, two engineers, and three attorneys who are included in this group of my personal associates…friends and family. That’s my short list. I’m sure you’ve got a list of your own. I am frustrated that even with a great education and fantastic work experience, our experience…and that of many of our friends…has been two steps backward for every one step forward financially. I am frustrated that we have such great company in this. I am frustrated that in far too many cases government work is beginning to look more appealing that private sector work. I am frustrated that it is our President and Congress’ intention for us all to lose our private sector health insurance plans in the coming years, only to be added to the growing government rolls. The best way…the only way, rather…for the government to provide…or rather preserve…plentiful opportunities in this country is to keep its tentacles mostly out of the private sector, and I am frustrated that our current leaders are doing just the opposite.
I am frustrated that I can’t provide the same opportunities for my children that my parents provided for me. I took for granted as a kid that music lessons and sports teams and fantastic family vacations, eating out as a family frequently and going to the movies often, cable television and fully funded (undergrad) college educations were the norm. Well, wasn’t it the norm, though? It was the norm for most people I knew growing up…certainly for those whose parents had graduate degrees anyway.
We were gradually moving up…on track to join the upper middle class…when slam, whack, the recession knocked the wind out of us…and we’re still just in survival mode nearly two years later. (And we would be a lot worse off if it weren’t for the support of faith and family). On paper, sure, we’re still very comfortably in the middle class, but factor in the cost of living in a seriously jacked up “blue” state (CA), the cost of job loss and subsequent career change, the cost of debt (mainly student loans for a graduate degree), and the cost of three kids, and I sure don’t feel middle class. At least not the idea of middle class that I have long had in my head.
Working harder for less is the new normal–for those lucky enough to have a job. Millions of families are giving up comforts they long took for granted, such as restaurant meals, new clothes, vacations, spacious cars, home improvements, and cable television. College funds and retirement savings have taken a hit, and some families have been forced to downsize their homes or, worse, submit to foreclosure. Little wonder that record numbers of Americans tell pollsters it’s getting harder to get ahead and that they worry their kids’ standard of living may fall rather than rise.”
My son told me he thought we were rich. I’m glad he feels this way, though it’s certainly not because I’ve given him that idea. I never want to project the attitude onto him that he is, or should feel, deprived in any way. He is very blessed. I am very blessed. We are very blessed. I am trying hard to focus on that, rather than on the financial frustrations that cloud my vision…but it’s not always easy.