What Happened to Widespread Economic Prosperity?
According to the US government, being middle class is defined more by your lifestyle than your income, more by your aspirations than your current situation. I’m not entirely certain what that means. From the graphic I found, it seems that if you own a home and a car, have health insurance and are saving money for retirement, can afford an occasional vacation, and plan to send your children to college (even if you have no idea how to pay for it), then you are certainly part of the “vanishing” middle class. Congrats! 🎉
When I benchmark my family to this picture of economic prosperity, I see that we are sort of middle class, but not completely. For example, we do own a home and a few cars. We are a sandwich family because my elderly father lives with us, and we still have school aged children living at home. We have three drivers and three cars presently. We LOVE our home and it’s location, but we bought it at a time when my husband and I were both working full-time. That’s no longer the case, and we find the annual taxes and HOA dues to be burdensome now. I mean, we’ve managed to keep the bills paid, but it’s not easy. We’ve had to sacrifice quite a bit of our previous lifestyle staples to maintain our living situation since I stopped working full-time, but so far, it honestly hasn’t been terrible.
Still, I’d be lying if I said we weren’t dreaming about moving to a more rural area with lower property taxes and no HOA dues. The only thing stopping us now is that everyone else in Houston area seems to be thinking the same; therefore, the prices of such properties in this market have risen to the point of being beyond our reach. Plus, God willing, we would like to stay in this area until our children finish school. In that case, we are likely to be in our present home for at least the next five years (if we can afford the tax increases due to property appreciation values until then).
When it comes to health insurance, we again only “sort of” have that covered. Every member of my household, except me, has health insurance. Even our oldest child, who has moved out already, is covered on our family health policy (courtesy of Obamacare, we can cover her until age 26!). I know it seems irresponsible to choose to remain without health insurance. I will certainly regret that choice if I ever become gravely ill. I’ve basically left myself the option of crawling into a ditch and dying or bankrupting my family if I do ever get catastrophically sick. The main reason I am not covered is cost. We’d have to sacrifice our standard of living even further for me to be covered.
The cost of health insurance through my husband’s company for ALL of my children is less than it would be to cover me alone. It ranges about 4-5% of his annual salary for the kids, plus another 5-6% of salary to cover me. I know – there are subsidies that may cover that last 1-2%. It’s just not enough to justify spending all of that money, especially if I consider that the amount we are discussing does not include one cent toward deductibles or prescriptions. If I have a health concern, I pay my expenses out of pocket. Oh, and I have to pay 2% of my husband’s salary to the government as a penalty for remaining uninsured, but it’s still cheaper than being insured (so long as I remain healthy. It’s basically a craps shoot!).
Also, because we started saving for retirement before we ever met and married, my husband and I do have some retirement savings to speak of. Recently, I heard on the radio that about half of American families have less than $20,000 saved for retirement. 😱 We are so thankful that we started saving when we were younger because we are not in that boat presently. When we married, nearly sixteen years ago, we did a financial analysis and determined that we’d like to save two million dollars for retirement. Based upon “modest” rates of return and “average” interest for the time period, we estimated that amount of money would provide the interest income we’d need to live on, supplemented by any pensions and social security monies we’d earn. At least that was our thinking.
The reality is that every seven years or so it seems our portfolio nosedives, effectively erasing most of our gains. Interest rates are near zero. Social Security is going bankrupt faster than initially estimated. We basically save the minimum amount of my husband’s salary required to receive his 401k match, and that’s it. Due to these “unforeseen” factors, our retirement portfolio reads more like a sad story rather than a tale of economic prosperity. Sometimes I think we’ll be retiring to a double-wide trailer in the foothills of West Virginia before it’s all said and done. I just pray we’ll be able to afford a snow blower so our old elderly bodies won’t be overtaxed digging our way out to civilization each winter. Seriously! 😲
In all honesty, when we first married, we did not envision ourselves barely hanging onto a middle class lifestyle at this stage in the game. We did everything our generation was told to do! Both my husband and I are college educated. We delayed getting married until our late twenties. We postponed having children until we could afford them. We have always scrimped and saved to buy most of our possessions so that we will not be burdened by crushing debt. It’s sometimes hard to believe how it all turned out, and it makes me feel a ton of compassion for so many Americans who are struggling with less than ideal financial circumstances than we are: paying child support from a previous marriage, having dropped out of college or taken out loans the size of a mortgage to pay for college (each seem equally detrimental), job layoffs, chronic illnesses, kids in and out of drug rehab, separation and divorce, bankruptcy and repossession, debilitating accident or injury. It sure does not take much for a family’s entire economic situation to end up pear-shaped in this current economy.
Perhaps the greatest distress of the situation is my very REAL memory that it was not always this way in America. For the Baby Boomer generation, full-time employment with benefits and a pension were the norm in their time (well, if you were a white male anyway). There was a sense that you took care of your company, and they in turn took care of you. Back then, nearly everything was “Made in America,” and the cost of housing, transportation, food, and healthcare were miniscule in their time as compared to today.
My parents, neither of whom graduated high school, likely lived a typical lifestyle for their demographic at that time. We had an apartment in Brooklyn, plus a country home for weekends and summer vacations. We owned a newer car. We ate out occasionally and sometimes went on vacations. My mother stayed home with her children. My father was a piece-worker in a clothing factory where he earned enough money to fully support his family, PLUS.
Now, if that’s all true (and it is), then surely people of my parents’ generation who were educated found they easily could afford a home, car, vacations, and whatever other extras their families desired. That’s why, from the sound of it, my college educated husband and I have approximately achieved the wealth level of my drop-out parents of yesteryear.
And looking forward to the potential our children have to achieve the same level of economic prosperity (that’s right – I said same level, not greater than, because I’m a realist) that we currently enjoy today, the prospects seem bleak. Unless they are exceptional in some way (and let’s face it – not everyone can be exceptional, despite what your mother may have told you) our children will have to compete with third-world workers earning slave wages and artificial intelligence (robots that can outperform them mentally, never need breaks, and never take unexpected days off) just to eek out a meager existence.
What this country needs is a plan to generate widespread economic prosperity for every sector of the economy. We must find a way to include people of every race, education level, and ability level in the story of America. No, we will not all have equal outcomes, and we cannot guarantee everyone equal opportunities. The playing field will never be equal for all people, and we shouldn’t want or expect it to be (read this short story: “Harrison Bergeron,” by Kurt Vonnegut Jr. to find out why), but it certainly can be more inclusive than it is presently.
Just don’t look to the current Democrat or Republic parties to lead the way, or corporate America either for that matter. Those entities are only interested in their own preservation, not our elevation. They will all be more than content to keep us moving in the wrong direction (and you know it’s wrong – you can feel it in your gut, can’t you? Me too.) so long as they keep making record profits. Make no mistake – none of them really care what happens to the 300 million Americans who are not in the top 10% of income (especially those of us in “fly over” country).
It’s time for America’s citizens of every stripe to work together to devise a creative new plan that will somehow raise the tide and thereby lift all our boats. We cannot as a nation sit idly by and wait for our current “elitist corporate and political leaders” to do the right thing by those of us who are not decision-makers. We can’t blame average people for ending up in worse economic circumstances than their parents when we’ve completely changed the rules of economic prosperity long after they were into the game. That’s just wrong in general. And we shouldn’t blame the poor for having no fish to eat when there is hardly anyone willing to teach them how to fish these days. Only by working together at the grass-roots level will we ever solve our economic and societal problems. If we wait for the government to save us, we’re dead.