Tag Archives: middle class

“Is the American Dream dead?”

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President Obama was at a town hall meeting earlier this week where he fielded questions about some difficult topics. One question came from a law school graduate who is struggling at age 30: “Is the American dream dead?”

This is an interesting question. One response to this guy, which I don’t think would really placate him or be charitable, would be to say that one personal case of difficulties does not mean the American Dream has disappeared. On the other hand, this question could lead to the question of whether the American Dream will be redefined in the future because of present economic and social realities.

One part of the American Dream that could complicate the future definition is that Americans tend to want better things for their children. It is fascinating to go back to community studies like Middletown and see in the 1920s how parents wanted their wanted their children to get ahead, primarily through education. What if this is no longer feasible for many? Perhaps the American Dream will simply level off for a while rather than continue to expand. But this would mean parents (and children) would need to change their expectations about what the future might hold.

Job outlook: either high-paying or low-paying, few in between

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Perhaps adding to the bleak economic outlook, some economists are suggesting that future jobs will fall into two categories: high-paying or low-paying with few jobs in the middle.

This would have implications for the size of different classes within the United States. To have a high-paying job, employees will generally need higher-education or specialized degrees. Having a service job means struggling to make ends meet. In this scenario, what kinds of industries or sectors might provide more middle-class jobs?

The value of lawn mowing

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English professor Jerry DeNuccio discusses the value of mowing the lawn. In addition to being an important marker of a middle class lifestyle, he suggests it has additional value:

Cutting grass is transformative. Having finished, one can see, immediately, that the lawn is manifestly different than it was, manifestly better, improved, prettier. Mowing is applied art; in doing it, one edits the lawn, grooming the ragged, shearing the shaggy, making the unruly ruly. I value this transformation because it stands in such stark contrast to what I do for a living…

For me, cutting grass involves a kind of invisible growth. Ironically, the very routine of grass cutting, its essential mindlessness, clears mental space to fill with intentional, task-unrelated thoughts. I call it “the mull.” I experience regrets; weigh alternatives and make choices; plan upcoming events; sing songs I find meaningful, which almost always means songs from the 1960s…

But I find there’s another, less volitional mental activity that occurs while cutting grass, one that seemingly lowers a hook to snag things lurking beneath the surface of consciousness. Experts would call it “the incubation effect.” Most would call it “zoning out.” I call it “the dream-drift.” The mind wanders. Stray images and unkempt thoughts slipstream in from some far away cognitive Pacific…

This thinking aspect is intriguing. On one hand, DeNuccio suggests mowing the lawn is an accomplishment, giving the mower the ability to quickly see that one has “improved” the lawn. Man or woman has quickly tamed unruly nature with the force of a human-pushed machine.

On the other hand, the process of mowing the lawn grants one important time to let the mind wander. This sort of time seems to be in short supply in our modern world, particularly for younger generations where time tends to be filled with some kind of digital input. This time can be found in other places, such as driving on long car trips, but lawn mowing could provide a regular, uninterrupted place to mull.

Defining the middle class

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A Yahoo! article lays out six markers of being middle class, according to an unnamed government task force. As the article suggests, middle class is a nebulous term in America:

People earning 20% of the average income and people earning 80% all claim to be part of the middle class. More than a few millionaires make the claim too.

Here are the six markers according to the task force: home ownership, automobile ownership, providing a college education for children, having retirement security, having health care coverage, and being able to take family vacations.

Looking at this list, I’m struck by three thoughts:

1. It seems quite American with its emphasis on owning a home, owning a car, and being able to take vacations.

2. This sounds like a life that has to be, or at least typically is, lived in the suburbs.

3. This would take quite a bit of money. Particularly with the point on providing for college, the middle class lifestyle is going to take a decent amount of income. Would the US median household income of $52,029 (2008 estimates from the American Community Survey) cover this? I’m guessing it would be difficult and it means most families would have to have two good incomes. Critical to all of this (and it was not mentioned) is to have a fairly high-paying career.

Deciding who is really rich

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As the American government considers changes to the tax brackets, James Surowiecki of the New Yorker says this involves an important question: how much money does one have to make to be rich?

While the administration has suggested being rich starts at $200,000 income per year, Surowiecki describes why it is not so simple:

Judging from surveys of how Americans describe themselves, most of the privileged don’t feel all that privileged. Why is that? One reason is the American mythology of middle-classness. Another is geography: in a place like Manhattan, where the average apartment sells for nine hundred thousand dollars, your money doesn’t go as far. And then there’s a larger truth about how wealth is getting concentrated in this country. As the economists Thomas Piketty and Emmanuel Saez have documented, people who earn a few hundred thousand dollars a year have done much worse than people at the very top of the ladder.

Indeed, wealth and income is often relative: if you made $150,000 a year but lived in a neighborhood and mainly associated with people who made around $1,000,000 a year, you might feel poor. The same concept is used to describe various levels of poverty: the relative poverty of the United States versus the absolute poverty experienced in Third World nations. Americans are notorious for feeling like they are middle-class, even if they clearly are not.

At the same time, I find it slightly difficult to believe that $200,000 doesn’t make one rich. Of course, one has choices about how to spend that money. Making $200,000 in Manhattan is not the same as the making that money in Nebraska. However, it should cover all of one’s expenses. Those making over $200,000 are still part of a small and elite group: according to the Census Bureau, in 2006 3.5% of American households made over $200,000 a year.

Surowiecki suggests the solution is to create separate tax brackets for the rich and “super-rich.” If the tax rates are changed, this seems reasonable to me – though it complicates the tax code.

A disappearing middle class?

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Yahoo Finance has a story that contains 22 statistics to “prove” the American middle class is “radically shrinking.” Interestingly, some of these statistics don’t prove much of anything about the middle class even if  they do indicate something about America as a whole. The post does show that the wealthy have gotten wealthier but without more context (statistics to compare to from the past, rates from other nations, etc.), there are better statistics to use to make this argument. Some of the statistics are linked to the latest economic downturn such as a rising number of bankruptcies and a rising time for finding a job.

Some examples of weaker statistics:

-“36 percent of Americans say that they don’t contribute anything to retirement savings.” How does this compare to previous rates? Perhaps the Americans of today don’t save like people in the past?

-“More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.” Service jobs are often low paying – but we don’t know much more from this statistic.

-“For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.” Sounds bad – but since we now have more people in the country, a percentage would be a much better measure.

-“Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.” This is a shot at Wall Street more than an explanation about the middle class.

Other statistics do back up his point (even though they would all benefit from more explanation):

-“66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.”

-“Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.”

-“The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.”

On the whole, this seems more an alarmist piece. There is evidence to back up his argument – but the evidence here is not presented well and needs a lot more context.