Financial Times: The Crisis of Middle-Class America
Quite a long article, but worth every second spent reading it. Here are a few choice quotes which jumped out at me:
“If we lost our jobs, we would have about three weeks of savings to draw on before we hit the bone,” says Mark, who is sitting on his patio keeping an eye on the street and swigging from a bottle of Miller Lite. “We work day and night and try to save for our retirement. But we are never more than a pay check or two from the streets.”
Alexis de Tocqueville, the great French chronicler of early America, was once misquoted as having said: “America is the best country in the world to be poor.” That is no longer the case. Nowadays in America, you have a smaller chance of swapping your lower income bracket for a higher one than in almost any other developed economy – even Britain on some measures. To invert the classic Horatio Alger stories, in today’s America if you are born in rags, you are likelier to stay in rags than in almost any corner of old Europe.
Strictly speaking, Connie actually lives in a four-income household. “When Andy was two, I was told to buy a karaoke machine because autistic children sometimes respond well to it,” says Mark, pointing at what can only be described as a postmodern antique. “That’s how I got into my karaoke business. I get about $100 every Wednesday evening. And on Saturdays I manage the local liquor store. We need all four jobs to keep our heads above water.”
While incomes in America are stagnating, the cost of education is soaring. Since 1990, the proportion of Americans who are paying off more than $20,000 in student loans a decade after they graduated has almost doubled.
For us, the first and last quotes especially hit home. Unfortunately, it has been years since we were able to have a proper emergency fund, and as the bills for my student loans begin to arrive–faster and more substantial than the income which was meant to be the product of the loans, mind you–it has become even more difficult to get ahead. This week, because we need the extra cash on top of my wife’s full-time work as a home health nurse and my mostly administrative work in a law firm while I await my Bar Exam results, I’ll be headed out to a few local restaurants — somewhere, somebody is going to need a waiter.
I get the feeling that most Americans are a little like us — all they need is one little push and, if they’ve been smart enough to learn the lessons learned by scraping by, that little push will be enough to overcome the obstacles between “just getting by” and “going somewhere.” Nevertheless, that so many people are stuck in the same proverbial boat means, to me, that the problem in need of fixing is a systemic one.
We need to foster economic growth in this country, and we need to do so quickly and sharply, while the memories of the “Great Recession” are fresh in our mind. Those like us who learned their lesson will thrive, while those doomed to revisit their mistakes will suffer the same fate once again. Joanna and I often joke that we’ve become so gosh-darned good at managing so little that once we start reaching our earning potential, we won’t know how to be frivolous. Frankly, that’s what we need to see in this country, and such a systemic change–not only in the economic picture in America, but more so in the fiscal tendencies of the American people–will be the only thing that could save us all.