topic Re: "The Secret Shame of Middle Class Americans" in Community Chat

"The Secret Shame of Middle Class Americans"

lolakimono — Fri, 06 May 2016 00:25:17 GMT

The Secret Shame of Middle-Class Americans

Read the full article (LONG) here:

http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/

Here are some interesting excerpts:

Since 2013, the federal reserve board has conducted a survey to “monitor the financial and economic status of American consumers.” Most of the data in the latest survey, frankly, are less than earth-shattering: 49 percent of part-time workers would prefer to work more hours at their current wage; 29 percent of Americans expect to earn a higher income in the coming year; 43 percent of homeowners who have owned their home for at least a year believe its value has increased. But the answer to one question was astonishing. The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?

...

Financial impotence goes by other names: financial fragility, financial insecurity, financial distress. But whatever you call it, the evidence strongly indicates that either a sizable minority or a slim majority of Americans are on thin ice financially. How thin? A 2014 Bankrate survey, echoing the Fed’s data, found that only 38 percent of Americans would cover a $1,000 emergency-room visit or $500 car repair with money they’d saved. Two reports published last year by the Pew Charitable Trusts found, respectively, that 55 percent of households didn’t have enough liquid savings to replace a month’s worth of lost income, and that of the 56 percent of people who said they’d worried about their finances in the previous year, 71 percent were concerned about having enough money to cover everyday expenses. A similar study conducted by Annamaria Lusardi of George Washington University, Peter Tufano of Oxford, and Daniel Schneider, then of Princeton, asked individuals whether they could “come up with” $2,000 within 30 days for an unanticipated expense. They found that slightly more than one-quarter could not, and another 19 percent could do so only if they pawned possessions or took out payday loans. The conclusion: Nearly half of American adults are “financially fragile” and “living very close to the financial edge.” Yet another analysis, this one led by Jacob Hacker of Yale, measured the number of households that had lost a quarter or more of their “available income” in a given year—income minus medical expenses and interest on debt—and found that in each year from 2001 to 2012, at least one in five had suffered such a loss and couldn’t compensate by digging into savings.

Re: "The Secret Shame of Middle Class Americans"

Puzzle Piece — Fri, 06 May 2016 00:34:43 GMT

It's not NEW news. The trend has been going on for a while.

The real shame is that folks are expectin the government to always bail them out. Not how this country was set up - it was for those who wanted independence, meaning they could deal with things when they came up or around.

Granted that things are pricey but that is when sacrifices are made and saving for the rough times becomes part of everyday life. Spending on frivolities and non-essentials becomes dangerous and foolish when one has to work AND pay taxes for their survival.

Re: "The Secret Shame of Middle Class Americans"

Desertdi — Fri, 06 May 2016 00:41:06 GMT

ALL of my relatives live beyond their means............and then they have the nerve to call me "cheap"...............

Re: "The Secret Shame of Middle Class Americans"

gardensla — Fri, 06 May 2016 13:24:52 GMT

Wage stagnation is killing the middle class.

Re: "The Secret Shame of Middle Class Americans"

RoughDraft — Fri, 06 May 2016 00:50:14 GMT

This is not the result of people "expecting" the government to bail them out. We can't blame everything wrong with this economy on a literal handful of people who might be abusing the system. This is a complex, heavy load for the lower to middle class, most of whom haven't seen an increase in wages in years and suffer the stress of job security to boot.

If one is fortunate enough to have existed on this planet without a major illness/accident/household catastrophe that takes a giant bite out their income or savings...they are lucky. It takes a good long strech of "nothing going wrong" to be able to build a nest egg to fall back on.

Re: "The Secret Shame of Middle Class Americans"

IamMrsG — Fri, 06 May 2016 00:54:23 GMT

Love Roses wrote: It's not NEW news.

You are correct. This status came to light from 2013 data. The situation surely has not improved, but more likely has become more dire, since.

Edited to add, "• Only 48 percent of respondents said that they would completely cover a hypothetical emergency expense costing $400 without selling something or borrowing money" --Page 3 of Report on the Economic Well Being of U.S. Households in 2013

Re: "The Secret Shame of Middle Class Americans"

Ms X — Fri, 06 May 2016 00:52:41 GMT

Quite simply, this is what happens when companies would rather hire cheap foreign labor than Americans. Had enough of this? I have!

Re: "The Secret Shame of Middle Class Americans"

physicsnut — Fri, 06 May 2016 00:54:45 GMT

I don't think that many people are living above their means. I think most people are living paycheck to paycheck - especially the past 7 years. Good paying FULL TIME jobs with benefits are hard to find and rising healthcare premiums - food - housing expenses are outrageous. Most people are just trying to survive wihile others are living off ot those of us who are working 2 and sometimes 3 jobs. Food stamps - unemployment checks - are all being abused...by some - not by all - but we have more people on these than any other time in our history...

Re: "The Secret Shame of Middle Class Americans"

Mominohio — Fri, 06 May 2016 00:56:27 GMT

I believe the 'financial fragility' is due to (for most people, but certainly not everyone) overspending and desire for nonessentials that they can't pay for. Even the most modest income level members of our society expect (at a young age) to own the technology, better cars, and nicer homes, big vacations, that people generations ago took a lifetime to accumulate.

Regardless of the size of the paycheck, most people spend beyond their means, and think they can't save. Many were never taught to even put back a very small amount each week and build an emergency fund.

Re: "The Secret Shame of Middle Class Americans"

bri20 — Fri, 06 May 2016 00:57:31 GMT

I'm not surprised...

Re: "The Secret Shame of Middle Class Americans"

IamMrsG — Fri, 06 May 2016 00:59:19 GMT

@physicsnut wrote:
I don't think that many people are living above their means. I think most people are living paycheck to paycheck - especially the past 7 years. Good paying FULL TIME jobs with benefits are hard to find and rising healthcare premiums - food - housing expenses are outrageous. Most people are just trying to survive wihile others are living off ot those of us who are working 2 and sometimes 3 jobs. Food stamps - unemployment checks - are all being abused...by some - not by all - but we have more people on these than any other time in our history...

Living "paycheck to paycheck," is living above your means.

Re: "The Secret Shame of Middle Class Americans"

MacDUFF — Fri, 06 May 2016 01:00:25 GMT

@gardensla wrote:
Wage snagnation is killing the middle class.

@gardensla

Wage snagnation...this is when you live in a country where the powers that be snag your wages before you even see 'em.

Re: "The Secret Shame of Middle Class Americans"

RoughDraft — Fri, 06 May 2016 01:01:42 GMT

@physicsnut wrote:
I don't think that many people are living above their means. I think most people are living paycheck to paycheck - especially the past 7 years. Good paying FULL TIME jobs with benefits are hard to find and rising healthcare premiums - food - housing expenses are outrageous. Most people are just trying to survive wihile others are living off ot those of us who are working 2 and sometimes 3 jobs. Food stamps - unemployment checks - are all being abused...by some - not by all - but we have more people on these than any other time in our history...

Oh, I think it goes back farther than 7 years. It actually took about the last 7 years to pull our economy out of the abyss with what the banking and investment companies did to a lot of hard working people's savings and investments. But I DO agree with your first sentence.

Re: "The Secret Shame of Middle Class Americans"

Moonchilde — Fri, 06 May 2016 01:02:51 GMT

The purchasing power of the middle class wage-earner, the severely lowered amounts of cost of living wage increases, as well as heavy layoffs, much of which had started even before the recession but was worsened by it, have hurt this country's working heart so badly I don't really believe it will recover - not in my lifetime, and maybe never.

When you don't get, or get only a micro c-o-l raise for 10-20+ years while rents, food, clothing and utilities (not to mention the price of homes) continue to rise higher while income doesn't, many people have been close to drowning just keeping a roof over their head and food in their stomach. That's hardly living above one's means when any less "means" would be lining up at the soup kitchen. And try "saving for a rainy day" for 20 years while living in a figurative downpour.

Re: "The Secret Shame of Middle Class Americans"

Moonchilde — Fri, 06 May 2016 01:07:30 GMT

@Ms X wrote:
Quite simply, this is what happens when companies would rather hire cheap foreign labor than Americans. Had enough of this? I have!

Except that whether people have had enough of it is irrelevant. It's not going to change, in reality, no matter who promises what. Talk is cheap.

Re: "The Secret Shame of Middle Class Americans"

fuzzball76 — Fri, 06 May 2016 01:08:02 GMT

For those in the Sandusky Ohio area in relation to this topic...KBI factory shutting down end of 2016. Basically, they were on strike a couple of months ago, the workers "claimed" victory by getting their demands in. Translation: the veteran workers on the inner circle knew this was coming, got what they could, retire and move on. The union leaders and crooked city officials who are on the take get to "remain the middle class" while the rest are screwed.

Re: "The Secret Shame of Middle Class Americans"

lucymo — Fri, 06 May 2016 01:08:40 GMT

@RoughDraft wrote:
This is not the result of people "expecting" the government to bail them out. We can't blame everything wrong with this economy on a literal handful of people who might be abusing the system. This is a complex, heavy load for the lower to middle class, most of whom haven't seen an increase in wages in years and suffer the stress of job security to boot.

If one is fortunate enough to have existed on this planet without a major illness/accident/household catastrophe that takes a giant bite out their income or savings...they are lucky. It takes a good long strech of "nothing going wrong" to be able to build a nest egg to fall back on.

@RoughDraft Very well said.

Re: "The Secret Shame of Middle Class Americans"

Mominohio — Fri, 06 May 2016 01:10:15 GMT

@IamMrsG wrote:
@physicsnut wrote:
I don't think that many people are living above their means. I think most people are living paycheck to paycheck - especially the past 7 years. Good paying FULL TIME jobs with benefits are hard to find and rising healthcare premiums - food - housing expenses are outrageous. Most people are just trying to survive wihile others are living off ot those of us who are working 2 and sometimes 3 jobs. Food stamps - unemployment checks - are all being abused...by some - not by all - but we have more people on these than any other time in our history...
Living "paycheck to paycheck," is living above your means.

@IamMrsG

The portion I highlighted is a pretty bold statement to make and won't be popular. But it is very true.

I remember in the early years, when we couldn't make enough money for the mortgage (less than any rent in the area), utilities food gas and insurances, we got second and third jobs. We spent no money on anything that wasn't essential, were cold all winter to keep the gas bill down, wore clothing only from the thrift store, and ate a lot of hotdogs and mac and cheese. We didn't have TV (and all this technology didn't exist), we didn't ever eat out, we didn't travel. Our lives existed around work and taking care of the house and yard, with visiting local friends or family as our only social life.

Many people today won't cut back or work more. Some can't because of health reasons or total lack of skills or opportunity, but a good portion of the people who have no 'cushion' at all, are in that position because the choose to be, by the decisions they make with their money and their work (or not) choices.

Re: "The Secret Shame of Middle Class Americans"

deepwaterdotter — Fri, 06 May 2016 01:20:13 GMT

Guess I'll just be content living my shameless, lower-class lifestyle.

Re: "The Secret Shame of Middle Class Americans"

Ms X — Fri, 06 May 2016 01:25:20 GMT

@Moonchilde wrote:
@Ms X wrote:
Quite simply, this is what happens when companies would rather hire cheap foreign labor than Americans. Had enough of this? I have!

Except that whether people have had enough of it is irrelevant. It's not going to change, in reality, no matter who promises what. Talk is cheap.

Why don't you think it will change, Moonchilde? China has pegged its currency to the US dollar for decades as a way to make their products and workers more competitive. In this way, they have taken our jobs and undercut American products. This is currency manipulation. Even as our government makes trade agreements that flood the USA with Chinese products, China has not similarly opened up its markets to us. Why make such agreements if they are to our detriment?

In terms of taxes and regulations, the US is not competitive with much of the rest of the world. Do you think nothing can be done about this? If so, I strongly disagree.

This is a very complex situation involving taxes, regulations, currency manipulation, varying standards of living, the cost of transporting goods halfway across the world, and a number of things I haven't mentioned and probably don't even know about. Suffice it to say that more could have been done, CAN BE DONE about this than our "public servants" have seen fit to try.

Let's do something for the American worker and for American companies for a change.