Tag Archives: middle class

The effect of the economic crisis on the black middle class

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There has a lot of research in recent decades about the black middle class. Some new numbers suggest the black middle class has been hit harder by the economic crisis than the white middle class:

In 2004, the median net worth of white households was $134,280, compared with $13,450 for black households, according to an analysis of Federal Reserve data by the Economic Policy Institute. By 2009, the median net worth for white households had fallen 24 percent to $97,860; the median net worth for black households had fallen 83 percent to $2,170, according to the institute.

Austin described the wealth gap this way: “In 2009, for every dollar of wealth the average white household had, black households only had two cents.”

Austin thinks more black people than ever before could fall out of the middle class because the unemployment rate for college-educated blacks recently peaked and blacks are overrepresented in state and local government jobs. Those are jobs that are being eliminated because of massive budget shortfalls.

Since the end of the recession, which lasted from 2007 to 2009, the overall unemployment rate has fallen from 9.4 to 9.1 percent, while the black unemployment rate has risen from 14.7 to 16.2 percent, according to the Department of Labor. Last April, black male unemployment hit the highest rate since the government began keeping track in 1972. Only 56.9 percent of black men over 20 were working, compared with 68.1 percent of white men.

Even though more blacks may have joined the middle class in recent decades, this data suggests they are more vulnerable than their white counterparts. And, of course, this is all related to the still present large gap in wealth.

It would be interesting to see data on how the economic crisis has affected other minority groups.

A mostly middle-class world by 2022

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In recent decades, hundreds of millions of people in the developing world have moved from poverty to the middle class. These numbers are only expected to grow in the coming years:

The world will, for the first time in history, move from being mostly poor to mostly middle-class by 2022, the Organization for Economic Cooperation and Development projects. Asians, by some predictions, could constitute as much as two-thirds of the global middle class, shifting the balance of economic power from West to East. Already, some analyses of International Monetary Fund data suggest that the size of the Chinese economy could eclipse that of the United States in just five years…

But today’s middle-class boom is unlike the Industrial Revolution, in which rising prosperity became a catalyst for increased individual and political freedom. Those in the emerging global middle classes – from an Indian acquiring a flush toilet at home to a Brazilian who can now afford private school to a Chinese lawyer with a new car in the driveway – are likely to redefine their traditional roles, and in doing so, redefine the world itself.

“I would expect that as the global middle class gets transformed by the entrance of hundreds of millions of Indian, Brazilian, and Chinese families, the concept of what we see as the middle-class values may change,” says Sonalde Desai, a sociologist with the National Council of Applied Economic Research in Delhi (NCAER). “Historically, sociologists have defined ‘middle class’ as those with salaries…. I think ‘middle class’ is very much a state of mind.”

As the article suggests, it will be fascinating to see what this majority global middle class will act like: will they follow the individualistic and consumeristic American model or chart a new course? And might the American middle class also change in response to or in conjunction with these global changes?

It is interesting that this article contains very little discussion of why the global middle class is surging. Is it because of capitalism? Globalization? Specific policies from groups like the United Nations or the International Monetary Fund?

In an editorial on the same topic, the Christian Science Monitor argues there is a need to maintain social values and avoid a “moral vacuum”:

A moral vacuum can strike any rising middle class. Battles for status erupt in a competition for consumption. (In China, it’s Louis Vuitton that defines prestige.) Material goods are seen as a ladder to upward mobility.

A consumer culture can also leave young people with a lack of purpose, as China knows well. And youth often have bicultural identities: one in tradition and one in the global market of high-tech communications and Western media. They may feel no kinship to either and can easily become alienated.

So cheers for the newly well-off. But they need a spiritual foundation before they build those McMansions.

It is revealing that the McMansion is the exemplar here of a soulless middle class.

How social class might affect a family’s view of its pet

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Some sociologists have examined the relationship between people and their pets. Indeed, there is even an American Sociological Association section titled  “Animals and Society” (read their rationale here).  Here are the thoughts of two sociologists on this dynamic between pets and their owners:

Sociologist Elizabeth Terrien discovered in a study of dog owners that people from rural backgrounds view dogs more as guardians that should be kept outside. More affluent people tend to see their pets more as children and describe them in terms such as “child,” “companion” or “partner in crime.”

Terrien found that those with Latino backgrounds were more likely to use the term “protector” or “toy” to describe their pet’s role.

Carey also refers to sociologist David Blouin’s three main categories of pet owners:

“Dominionists,” who view pets as useful but replaceable helpers. Many of the people in this category in Blouin’s study were immigrants from rural areas.

“Humanists,” who pamper their pet much like a human child, let their pets sleep in their beds or leave money in their will.

“Protectionists,” who have strong opinions about how animals should be treated and decide what they think is “best” for an animal (untying a dog tethered to a tree, for instance, or determining when a dog should be put down).

I wonder if we could map these ideas on top of Annette Lareau’s ideas about class and parenting styles in Unequal Childhoods. Lareau suggests that lower-class parents practice the accomplishment of natural growth, a more independent view of children and not encouraging children to challenge external authorities, where middle- and upper-class parents practice concerted cultivation where children are encouraged to speak up and parents give children the activities and cultural tools to get ahead. These categories seem to line up with the idea of these two sociologists: pets are more replaceable and functional for lower-class people (“dominionists”) while pets take are much closer to family members in more wealthy families (“humanists” and “protectionists”).

I also wonder if there is work comparing the treatment of children in families to treatment of pets. What might the impact of this be on children?

Additionally, it sounds like there could be some value judgment regarding which of the three approaches is most appropriate. How do “humanists” and “protectionists” view “dominionists”?

Generation R(ecession)

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This isn’t the first article or commentator to suggest that the current generation of roughly 20-somethings will be profoundly affected by the current economic malaise. But sociologist Maria Kafelas provides some insights into what she terms Generation R:

[Generation R] were born between 1980 and 1990. They’re the children of the baby boomers…

Working class kids said to us, “Listen, we’re going to be the first generation of Americans to do worse than our parents.” One young woman said, “I just feel burned. My friends who didn’t go to college, they don’t have debt and they’re making more an hour than I am.”…

[A working class girl who went to college] actually said, “I don’t even know why I spent the money.” The middle class kids were saying, “It’s very tough, I am filled with anxiety. I can’t sleep at night, but I still believe in a college degree. I’m just going to have to work harder and it’s going to take longer.” And those elite kids said, “Is there really a recession? It’s more like — it’s just harder for me to get a job.” And they’re sitting out this recession in a lot of ways…

They now talk a great deal about not wasting money; conspicuous consumption they say has gone out of fashion. And they don’t want to be seen as throwing money around when their families are eating into their resources to keep them afloat, etc.

If these characteristics do mark this current generation, their beliefs and practices would affect a number of institutions: higher education (and the education system in general), the economy (with more measured consumption practices), the relationship between generations (perhaps being the first generation in a while whose life is not markedly better), and perhaps more (government – for letting this all happen, financial institutions – for helping to make this happen, etc.).

But these comments from Kefalas also highlight the class differences that are exacerbated in these difficult economic times. For the elite, not a whole lot has changed. The middle class may still believe in college and the value of hard work. But it is the working and lower classes that might really have a lack of hope as the ways to move up, such as a college education, seem to be further out of reach.

The current problems of mixed-income development in Chicago

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The challenges facing a new Chicago mayor are large. Within a story about how growing Chicago’s middle class will prove to be one of these challenges, the Chicago Tribune summarizes the progress of the mixed-income developments that replaced a number of public housing high-rises:

For years, miles of high-rise public housing buildings stretched across the city’s skyline, blocking off entire neighborhoods from any hopes of improvement and further defining Chicago as an urban failure.

Today, much of the city’s stability rides on the success of the $1.6 billion effort launched by Daley in 2000 to tear down those public housing towers, sending thousands of Chicago’s poorest residents to new neighborhoods.

As part of the Chicago Housing Authority’s Plan for Transformation, the mixed-income developments going up in those neighborhoods are meant to be cornerstones for further growth, luring urban pioneers whose presence there would then attract new stores, restaurants, better schools and even more residential development.

The plan has worked in some neighborhoods, most notably, the area near the Gold Coast that was home to the infamous Cabrini-Green housing complex. Synonymous for decades with urban despair, the community has been transformed to a bustling center of urban chic, even before the CHA began demolishing the last high-rise building there last month.

But in other Plan for Transformation communities, the weak economy has altered plans for new development, generating concerns about an effort that has been blamed for destabilizing some neighborhoods.

Unable to attract enough interest for the middle-income homes that are the linchpins of those developments, several developers have recently won approval to instead build more rental homes, including public housing units and other low-income apartments.

That has stirred worries that pockets of poverty are being re-created, though a federal judge overseeing the effort has emphasized the importance of including the mixed-income units.

“If you get too much rental, and too much of it is low income, the neighborhood can get fixed with an image that is hard to change, so that’s an ongoing concern,” said Alexander Polikoff, a director at Business and Professional People for the Public Interest, a law and policy group that has monitored the Plan for Transformation’s efforts as part of a federal court settlement stemming from a 1966 class-action lawsuit.

In a 2009 report, BPI criticized developers for the “slow pace” of building on middle-income homes that could have been sold when the housing market was still strong.

Some thoughts about this summary:

1. We will still need time to assess the full impact of the Plan for Transformation.

2. For sources like the Chicago Tribune, just getting rid of the public housing high-rises is an important enough feat. Because Chicago no longer has these high-rises, is it now not an urban failure?

3. The emphasis here is on neighborhoods, collectivities of institutions and individuals, and their status. What about the residents who left the public housing high-rises. What sort of neighborhoods are they in?

4. Within the Plan for Transportation, how much planning was there for harder economic times? When the Plan was conceived and put into practice (late 1990s-2000s), it seems imperative that middle-class professionals would want to purchase in the mixed-income neighborhoods. If this pool of buyers is not available or is not as big, then the neighborhoods can’t be what they were intended to be.

Limited American meritocracy and the importance of a college education

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A foundational cultural value in America is that residents should have equal opportunities and that if people work hard and grasp these opportunities, they will be able to get ahead. But academics have suggested for decades that while this might sound good, real chances to move up the social ladder are more limited. Some recent data suggests this is indeed the case: compared to other industrialized nations, being born into a poor American family is more limiting.

Among children born into low-income households, more than two-thirds grow up to earn a below-average income, and only 6% make it all the way up the ladder into the affluent top one-fifth of income earners, according to a study by economists at Washington’s Brookings Institution.

We think of America as a land of opportunity, but other countries appear to offer more upward mobility. Children born into poverty in Canada, Britain, Germany or France have a statistically better chance of reaching the top than poor kids do in the United States.

What’s gone wrong? Thanks to globalization, the economy is producing high-income jobs for the educated and low-income jobs for the uneducated — but few middle-income jobs for workers with high school diplomas…And Harvard sociologist Robert Putnam argues that thanks partly to the rise of two-income households, intermarriage between rich and poor has declined, choking off another historical upward path for the underprivileged.

“We’re becoming two societies, two Americas,” Putnam told me recently. “There’s a deepening class divide that shows up in many places. It’s not just a matter of income. Education is becoming the key discriminant in American life. Family structure is part of it too.”

Increasingly, college-educated Americans live in a different country from those who never made it out of high school.

This article only mentions a small bit of data and it would be interesting to see the mobility rates for all Americans.

But these findings present Americans with a contradiction: we talk about social mobility but reality is a lot harsher. What often happens is that certain cases of people who “made it” are trumpeted and held up as examples when really those people were exceptions rather than the rule.

Malcolm Gladwell’s book Outliers lays this out in a simple way: those born into more privileged positions accumulate advantages over time. One of these advantages in America today is a college education. For many in the middle and upper classes, college is a foregone conclusion: a young child is expected to accomplish this goal. But to get to this point, middle and upper class children have more financial resources, better schools, better health and nutrition, parental support (“concerted cultivation”), and more.

This gap between the college educated and those with less than a college education is an important one to watch in the coming decades.

Reduced American mobility

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One of the hallmarks of American life in the last 60 years is the incredible mobility. Even a few years ago, the average American family moved every 5-6 years.

But this has changed with the recent economic downtown:

“We’re seeing one of the lowest mobility rates in a century,” says Nathaniel Karp, chief economist for banking firm BBVA Compass. Karp says the recession has forced many people to stay put because they are unable to sell their homes, cannot find jobs or are unwilling to relocate for work if it means sacrificing a partner’s stable position.

The slowdown makes the question of who’s moving and why even more significant than in years past.

If people can move frequently, it leads to people being able to move to where the jobs are available, it means that the housing market has more people who are selling and buying, and it influences the middle-class and above ethos that you can determine your own destiny.

This psychological feeling that movement is possible might have a profound effect if the mobility rate stays low. In recent decades, the decently educated and paid American could expect that they would come out of school, move to where a job was available, move up to a house, and then continue a cycle of better job leading to better house and then going to a better job and so on. But this has changed somewhat: college graduates are returning home more frequently and there are many who are stuck in houses where they owe too much money.

Overall, this would impact what it means to be middle class: it would still lead to having certain levels of education and consumption but it wouldn’t mean the greater “freedom” of being able to move where one wants to.

Social class, meritocracy, and the latest Royal wedding

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Amidst all of the furor, one commentator explores the possible consequences of the marriage of the Eton-schooled Prince William and the middle-class Kate Middleton:

The Daily Telegraph published one of the more entertaining pieces about the intended wedding. Toby Young gave the new parents-in-law, Charles and Camilla, hints on how to behave at a middle-class dinner party (“bring a bottle of wine”). But Toby Young’s father was the renowned sociologist Michael Young. I doubt if he would have been amused by young Toby’s class-ridden article.

In a classic book, The Rise of the Meritocracy, back in 1958, Young père invented a new word. As the Oxford English Dictionary confirms, “meritocracy” is the only concept by a British sociologist to enter the English language since Darwin’s camp-follower, Herbert Spencer, back in the 19th century, thought of the phrase “survival of the fittest”.

Young didn’t welcome the prospect of an all-powerful meritocracy. He feared it would leave behind a disaffected, leaderless working class. He hoped for a revolt against the triumphant meritocrats. He never reckoned that Eton would help to man the barricades.

Could any sociologist have invented an apter surname for the bride-to-be than “Middleton”, with its undertones of Middle England and middle class? Till now, meritocracy has, in practice, surged ahead. Kate’s parents, Michael and Carole, are entrepreneurial examples. Politically, the marker was Tony Blair’s invention of New (ie Middle Class) Labour…

The upshot, as in the United States, is that an ever increasing proportion of the population will hold some kind of degree. Partly because of this, most Americans now think of themselves as “middle class”. In Britain, a sizeable segment still think of themselves as “working class”, because their fathers, or even grandfathers, were working class. But this curious nostalgia is fast fading.

The physical evidence of meritocracy is all around the commuter-land fringes of every town and city in Britain. In Berkshire, where Kate Middleton and David Cameron grew up, estates of “executive homes” have spread like Japanese knotweed. They are sneered at by those who can afford a bit more, just as the interwar pebbledash semis were sneered at. That’s how Britain is. Class obsesses the British, and especially the English, in the same way that race obsesses Americans.

Chalk one up for British sociology: the coining of the word “meritocracy.”

This commentary comes close to asking a question that I have always wondered about: what would society have to look like before it could truly be called meritocratic? This commentator suggests meritocracy has helped many people in England move up to the middle class but ultimately, Prince William from Eton, the symbol of upper-class England, will carry the day. Does a society need to be mostly middle-class? Do most of the citizens have to feel that they have an opportunity to make their way up the class ladder (which seems to be the thought in America)? Does it mean that a majority or a large number pursue and achieve a college education? Does it mean the reduction of blue-collar jobs and a rise in white-collar and professional positions?

This seems difficult to sort out. America likes to think it is meritocratic even as many people have fewer opportunities to move up. Perhaps we could settle on suggesting that America, at least in ideology, is more meritocratic than England?

Kotkin: election results “the smackdown of the creative class”

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Amongst pundits sifting through the election returns, I have only seen Joel Kotkin explore how votes broke down by broad location categories: cities vs. suburbs. Before the election, Kotkin suggested that both parties were fighting over middle-class suburbanites (and the Democrats were losing at this). Afterward, he continues this argument and suggests the creative class and bourgeois bohemians were overwhelmed by the middle-class, suburban vote:

More than anything, this election marked a shift in American class dynamics. In 2008 President Obama managed to win enough middle-class, suburban voters to win an impressive victory. This year, those same voters deserted, rejecting policies more geared to the “creative class” than mainstream America.

A term coined by urban guru Richard Florida, “the creative class” also covers what David Brooks more cunningly calls “bourgeois bohemians”–socially liberal, well-educated, predominately white, upper middle-class voters. They are clustered largely in expensive urban centers, along the coasts, around universities and high-tech regions. To this base, Obama can add the welfare dependents, virtually all African-Americans, and the well-organized legions of public employees…

But the real decider–to use George W. Bush’s unfortunate phrase–remains the much larger, more amorphous middle class. Given the economy of the past two years, the subsequent alienation of this group should pose no mystery. Suburban swing voters didn’t suddenly turn into racists or right-wing cranks. Instead they have seen, correctly, that Obama’s economic policy has to date worked to the advantage of others far more than themselves or their families. Until the Democrats and Obama can prove that they once again can serve the interests of these voters, they will continue to struggle to recapture the optimism so appropriate two years ago.

I would love to see some actual numbers on this. It seems like Richard Florida could post some maps like he has recently been doing on Atlantic.com that would correlate voting patterns with the presence of the creative class.

I wonder if Kotkin would suggest this is a continuation of the older “culture wars” idea (progressives vs. conservatives, religious vs. non-religious, etc.) or a new trend (the creative class vs. middle-class suburbanites).

More broadly, how big will the creative class in America grow to be? Is it possible, or even desirable, that a significant number of Americans become part of the creative class or the bourgeois bohemians?

Middle class cuts spending on alcohol, clothes, eating out

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In these troubled economic times, new data suggests the middle-class is cutting back spending in certain areas:

Households in the middle fifth of the population sliced their average annual spending to $41,150 in 2009, the Labor Department said Tuesday in its annual spending breakdown. That was down 3.1% from 2007 and 3.5% from 2008, the steepest one-year drop since records began in 1984. The drop came even as those households’ after-tax income remained relatively stable over the two years, at an average $45,199.

Middle-class households reined in spending mainly on discretionary items. On average, from 2007 to 2009, they cut spending 20.1% on alcoholic beverages, 15.2% on clothing, and 9.5% on restaurants and other food away from home. They also spent less on some groceries, cutting back on items such as fresh milk and cream, as well as seafood.

Some of the change in spending could reflect a shift to cheaper alternatives, such as picking McDonald’s over sushi.

So when middle-class families need to cut back on spending, this is where they limit their spending: alcohol, clothing, and eating out. Presumably, more positive economic climates lead to more spending in these areas.

This is interesting in that it provides some indication of what the middle class considers “luxury items.” These are not generally big-ticket things but having the ability to drink more alcohol, buy more clothing, and eat out more may be the height of middle-class enjoyment. To reach the middle class may mean that one is able to spend in these areas without worrying too much about the budget.