78roadrocket

It seems to me that the American middle class is beginning to disappear. A widening gap is becoming noticible between those with expendible income and those struggling to make ends meet. I am basing this mainly on my own observations, and wish I had statistics to back it up, but I do not.

I am very curious to get Vintage input on this matter. Do you agree that this is beginning to occur? If so, how long do you think the trend will continue? To what extent do think it will go?

-Doug

ralper

Rocket

Like you, I don't have the statistics to back up my opinion, but like you, I also think the middle class is disappearing and the gap between those with extra disposable income and those struggling to make ends meet is widening.

I believe that this has been going on for quite some time, at least since the late 70s. I think that there are two (possibly more, but two that I can think of) forces at work.

First is the loss of our manufacturing base here in America. Those reasonably well paying jobs have been lost. Those were some of the jobs that created the strong middle class in America.

Secondly, the price of necessities such as health care, health insurance, gasoline, education have gone up faster than income. This of course, has a greater impact on the middle class than it does on upper class wage earners. The increased cost of these items has taken a lot of middle class disposable income.

Unfortunately, I think this will continue to go on for quite a while, especially if health care, health insurance and energy costs don't stabilize.

78roadrocket

Rob, do you think the condition will worsen?

ralper

Yes I do. Especially if the prices of necessities continue to increase so rapidly.

JonasM

Actually, from all the studies I've seen, the entire concept of class is not very applicable to America. We have more class mobility than any other place on the globe. According to a 1995 Annual Report of the Federal Reserve Bank of Dallas, only 5 percent of those in the bottom 20 percent category of income earners in 1975 were still there in 1991. What happened to them? A majority made it to the top 60 percent of the income distribution, middle class or better, over that 16-year span. Almost 29 percent of them rose to the top 20 percent. Also, the very definition of poverty is a bit suspect: Based on a number of government reports after the recent Census, 46 percent of poor households actually own their homes (a large percentage are valued over $75K); seventy-six percent have air conditioning; the typical poor American has more living space than the average non-poor individual living in Paris, London, Vienna, Athens and other cities in Europe; nearly 75 percent of poor households own one car and 30 percent own two or more cars; 97 percent have at least one color television; 62 percent have cable or satellite reception and 25 percent have cell phones.

Poverty for the majority is a temporary condition, such as newly gradualted students, people who just lost their jobs and are having trouble finding a new one, etc.. The percentage that is truly poor is vanishingly small (though definitely not zero). One recent report from Michigan found that over half of the measured poverty spells lasted four months or less, and 79.6 percent were over within a year.

Everyone has anecdotes of people who are having trouble making ends meet, but the hard data doesn't support the existence of a large number of people truly in poverty. Since many of us are obviously not rich, I guess that leaves a pretty big middle class.

JonasM

paS2K

Another factor is the 'base level' expectation of young people. Today, many folks assumes that they are entitled to: a new car, a cell phone w/1000 min per month, new furniture, trips abroad every year or two, a condo with a pool and health club, dinner @ a neat place 1-2x per week....

I grew up in the 60s/70s when there were still parents/ grandparents who lived thru the Depression of the 1930's. Many older adults preached 'frugality', independence from credit-card living, etc.

Our children and grandchildren do not see that example in their vintage generation parents/grandparents.....who do things like buy sports cars

paS2K

Jonas, I fear that you're living in a bubble Come into any 'rust belt' city and you'll understand poverty.

More to the point, those 'poor' people who have a house, car, cell phone, color TV w/ cable, etc....are supporting those goods on: 2 or even 3 jobs, 105% mortgages, extraordinary credit card debt, etc. They have NO 'rainy day' fund. They are in big trouble as soon as a major expense or job loss comes along.

paS2K

IMHO, if Vintage member can afford a nice home, college for their kids, AND a $33K weekend fun car......

.....then you ARE 'rich' in a relative sense. I doubt that many folks on the Vintage forum are truly 'middle class', with a family income of $40-50K

(Sorry to pick on you, Jonas....but I think there may be a lot of rose-colored glasses in Euclid OH )

ralper

In many cases poverty is not a temporary condition. When the factories shut down, and business leaves town, poverty moves in. Read about Camden, NJ, once a proud, middle class/working class town across from Philadelphia. Today it is "America's most dangerous town". This article appeared in today's New York Times.

http://www.nytimes.com/2004/12/29/nyregion...mden.html?8hpib

78roadrocket

Our area might go the way of Camden if out aluminum plant closes. They've already filed for Chapter 11 and the workers are on strike, so it seems like only a matter of time.