Falling Out Of Middle Class Into A Life With Less - WaPo

[WillyT]

Falling out of middle class into a life with less
By Annys Shin
Washington Post Staff Writer
Friday, January 14, 2011; A01

<snip>

Five years ago, an automated voice on the phone would not have reduced Sondi Moore to tears. But five years ago, she was not behind on her electric bill.

A couple of days after Christmas, Moore, 63, called Dominion Virginia Power to pay her bill, which was overdue - again. She was desperate to avoid having her power cut off, which is what happened in November after she racked up a tab of $1,026.

Not so long ago, Moore and her husband, Seymour, 46, made more than $200,000 a year, vacationed in Fiji and thought nothing of picking up a $400 dinner tab with friends.

But then Moore left her property management job to set up a cat-sitting business, and her husband lost his job as an IT consultant nine months ago. They now scrape by on Sondi Moore's Social Security checks, her husband's unemployment benefits and a trickle of money from her nascent business. Total income for 2010: $30,000.

More than a year into the recovery, the economy is starting to show signs of improvement. The stock market has rebounded. Corporate profits are soaring. And yet, for millions of Americans, the lingering legacy of the Great Recession is a Great Slide, as job losses, declining home values and decimated retirement savings have knocked them down the socioeconomic ladder. For the formerly middle class, this slide plays out in big and small ways, from a loss of identity to the day-to-day inconveniences of life with less.

<snip>

Much More: http://www.washingtonpost.com/wp-dyn/content/article/2011/01/13/AR2011011306705_pf.html

:kick:

[Patchuli]

1. Sadly, that scenario is all to familiar

to this family...

[dixiegrrrrl]

2. Lots of BS in this ariticle.

"More than a year into the recovery".......there are LESS employed people now than ever.Foreclosures are up.
business bankruptcies are up.

"The stock market has rebounded".... yeah, but not by any rational or even legal means. The stock market does not now nor has for a long time reflect reality.It is being artificially propped up.

The TRUE statement in the article is: "Corporate profits are soaring."

[upi402]

17. + 1,000 ^

The 2x4 of truth hurts and you wield it well!

[Statistical]

24. 1.3 million more people employed Dec 2010 compared to Dec 2009.

ftp://ftp.bls.gov/pub/suppl/empsit.cpseea3.txt

[Exilednight]

27. That's not what the table says. The tables say that there are

1.3 million more jobs, but that does not equate to more people being employed.

This country needs to create 125,000 (and that number is on the conservative end) jobs per month just to keep up with people entering the workforce.

Basically, we have job growth but we also have rising unemployment. Even if we create 70,000 jobs this month, unemployment will increase by 55,000.

That 55,000 will never be reflected since those entering the workforce do not qualify unemployment insurance. In order to qualify, you have had to work for 420-700 hours over the past two years to qualify.

[Statistical]

28. No the tables showed the number of persons employed.

There were 1.3 million more persons employed in Dec 2010 than 2009.

Also there is nothing correct in the rest of your post. UI benefits have nothing to do with unemployment statistics.
You can be unemployed and received no benefits, you can receive benefits and no be unemployed.

[Exilednight]

29. People who give up, and those who have no work experience

do not get counted in the unemployment numbers. A true reflection of unemployment, by most economists standards, is double the reported number.

In order to shave real unemployment, not the number the government releases, by 0.1% (this is Krugman's estimate) we need to create nearly 250,000 jobs per month.

The unemployed includes those people who don’t have a job, have looked for a job in the last four weeks, and who would take a job if it were offered. The unemployment rate is determined by dividing that number by the number of people in the labor force – which is equal to all the employed people + all the unemployed people.

Let's also not forget, if you work at least 15 hours a week, you are not considered unemployed.

Now let me ask you this, how many people are left out of this formula?

And again, just because 1.3 million more people are employed, it doesn't mean that unemployment dropped by 1.3 million people from the past year.

If you want an accurate number then you should at the LFP.

[Statistical]

30. I never said unemployment dropped 1.3 million.

I only corrected a false statement. This statement "there are LESS employed people now than ever."
1.3 million MORE people are working in Dec 2010 cmpared to Dec 2009. The statement is false. That was the only claim I made, and it is valid.

"Now let me ask you this, how many people are left out of this formula?"
Depending on which stat.

The govt provides 6 unemployment stats. U-1 & U-2 aren't very useful.

U-3 = persons unemployed, willing & able to work, has looked in last 4 weeks.
U-4 = U-3 plus those who didn't look due to not believing there are jobs or they won't get a job (discouraged workers)
U-5 = U-4 plus all others not looking for work
U-6 = U-5 plus all persons working less than full time because they can't find full time work.

[Exilednight]

31. Those numbers are not that useful. The most useful number is LFP.

There's no way to actually prove 1.3 million people are working. It's an averaged out number, but bears no real meaning.

According to a random survey, they are guessing that 1.3 million more people are working.

LFP is the best number to use, and not even that number is completely accurate.

[Statistical]

34. Sorry I will use the official stats.

LFP is based on a survey also. So one survey is a "guess" and that other survey is "gospel".

1.3 million more people are working compared to Dec 2009.

[Exilednight]

37. Yes, but the LFP

gives you a better number as to how many people are unemployed. It includes everyone that is left out of a standard unemployment survey.

It's not a truly accurate number, but it's a lot closer.

[Statistical]

40. There is nobody left out. You simply need to look at the right metric. U3 to U6. n/t

[sendero]

35. The "recovery".

.... is the epitome of the "big lie". There is no recovery and there is not going to be one for the foreseeable future.

[Trajan]

3. Sounds so familiar ...

My family went through that ... twice ....

Not as much money ..... In the $90,000's until 1993, then BAM .... one layoff and we're on the fast track to poverty ....

We rise up again, on sheer guts and wherewithall ... Only to go through it again 10 years later in 2003 ...


It took two years to get back on track ... but I am still working at reduced wages, and learning to live with less ...

We still struggle ...

Can anyone show me any instance where conservative economic principles have been used in a society that went on to develop a decent standard of living for citizens and families ?


What country at what time ? .....

The only time I know of was the 1930's through 2000, when the efforts by conservatives in the 1990's to wipe out 'New Deal' thinking eventually bore fruit, and wages took a different, less steep climb than prices ... and wages had less and less ability to raise and nurture a family ....

[XanaDUer]

4. I earned a little more than that as a public librarian not that long ago

So, yes it's sad, but you do what you gotta do.

[Shagbark Hickory]

5. $1026 for power bill???!!! $400 dinner tab?!!?!

IMO, $200k/yr is borderline wealthy, not middle class. Therefore they slid from being wealthy into the middle class, probably.
What I want to know is are they growing MJ or something? That's a big power bill.

[Alenne]

7. It's probably from them not paying it for months. nt

[Fumesucker]

8. I know people with circa $1000 monthly power bills

A fairly modest McMansion with a pool can run that much a month to keep the AC on and the pool pump running during the summer, particularly if you live somewhere hot and humid like much of the South.

With the sort of income these people had it's extremely likely that they had more house than they really needed.

[Shagbark Hickory]

10. Do you think they need to run the AC lately in VA?

MAybe the article was from a while back.

[Fumesucker]

12. Electric heat can be expensive too..

Most heat pumps don't work efficiently if it's below about 40 F, then the auxiliary or emergency heat cuts on and the electric meter spins like a helicopter rotor.

[Shagbark Hickory]

18. Do you think a mcmansion in VA is using heatpumps?!? Not to be a nitpicker about facts. I think they

are growing MJ, personally.

[Fumesucker]

21. Heat pumps are the most efficient electric heat..

But as I pointed out, when the outside temp drops below about 40 F most heat pumps are not very effective.

Depending on your electric rates total electric heat can be extremely expensive, straight resistance electric heat is the least efficient central heating there is.

A commercial grow house is going to have a bill well over $1000, that amount just isn't all that unusual for a largish house these days, it would put me into shock but I know several people that wouldn't blink at a $1000 electric bill, I'm surrounded by new developments of McMansions that probably come close to that on a regular basis. A large poorly built and insulated house can be a real money pit to heat and cool.

[Shagbark Hickory]

26. I am far south of VA (that's GA in my avatar), 3300 SF, lots of uncovered windows and drafty doors..

The house has two electric heat pumps, both run 24/7 this time of year. Never catching up to the target of 68 degrees for very long unless it's above 40 or so outside of very sunny. Also electric water heater. Last month, the bill was like $158. The worst bill I remember is the winter was around 250, last year when we went about 10 straight days without getting above freezing.

In the summer, I think the worst bill was around $300. Running the A/C when it's high 90's consistently is very expensive.

But not over $1000. Nowhere close to it.

[sendero]

36. One thing is for sure..

.. these folks, like a LOT of Americans, assumed the good times would roll on forever and didn't bother to build up any savings.

While I understand why a family making $50K cannot save much money, families making $200K could have but they didn't.

Oh well.

[datasuspect]

6. a population is much easier to control when it is desperate and without hope

if you break people down enough, you can get them to do or believe anything.

i wonder how many of these people self-identify as republicans?

[Urban Prairie]

9. Maybe the wealthy should be given tax-cuts to create more jobs here in the US

The trickle-down effect of tax-cuts for the weathy has been proven to work, right?

But hey, it turned out that the Reagan-era Rethugs were just pissing on our collective legs and telling us that it was raining.

It was also long before NAFTA, and those other global "free" trade agreements were signed, as well as prior to when the broadband internet era began.

So why do the rightwing continue to insist that tax-cuts create jobs, when the fact is that peasant wages...as well as the complete lack of any FLSA laws, reduced overhead/legacy costs or providing ANY fringe benefits, is FAR more attractive to the global corporate capitalists than mere tax-cuts or "incentives" are, not that multi-national corporations have paid much, if any federal taxes to begin with, due to the US' leaky and loophole-filled tax code.

The REAL reason that the Rethugs continue to push the tax-cuts meme, is much more devious in intent, as what they really want to happen as a result of reduced federal tax income, is to force the federal government to drastically reduce, if not ultimately eliminate all social services funding. Doing so would inevitably cast tens of millions more into deep poverty and homelessness. A homeless person can not vote, having no permanent address. Most who recieve federal/state assistance vote Democratic. A win-win scenario for the reichwing and GOP.

[Little Star]

33. Yes. They should have to work for their tax cuts by creating...

jobs here in the US that have to stay in the US. Why should they get money with out working for it? I am sick of the welfare rich.

[Rage for Order]

11. The people in this article aren't very sympatheitc

"Not so long ago, Moore and her husband, Seymour, 46, made more than $200,000 a year, vacationed in Fiji and thought nothing of picking up a $400 dinner tab with friends. But then Moore left her property management job to set up a cat-sitting business, and her husband lost his job as an IT consultant nine months ago. They now scrape by on Sondi Moore's Social Security checks, her husband's unemployment benefits and a trickle of money from her nascent business. Total income for 2010: $30,000."

Maybe when they were making $200k a year they should have saved for a rainy day instead of spending like there was no tomorrow. And a cat-sitting business? Who thought that was a viable business proposition? I've got news for them: there are millions of retired people making do on much less than $30,000 a year.

"Shortly after she and her husband, Shawn, lost their jobs within two weeks of each other in 2009, Katherine Thorne, 29, found herself waiting in line to fill out applications for welfare and food aid in Prince William County. In the course of a summer, that double whammy dropped the Thornes from a combined income of about $80,000 to public assistance. She had been an office manager for a Federal Aviation Administration contractor in Herndon; her husband was manager of a Foot Locker store that closed.

"Once one thing happens, everything snowballs," she said. "We went from living comfortably and happy to everything was wrong."

As they entered financial free fall, the couple split up. She stayed in their townhouse with their three children, now 13, 3, and 2, struggling to pay the $1,300 rent. One by one, the utilities were cut off. She fell behind on the rent and soon found herself staring at an eviction notice.

She also got help with child care, but not without some doing. When she was working, she paid her mother $600 a week to watch her two younger children. But for Thorne to get assistance with child care, her mother had to be certified and take child development and CPR classes."

$600 a week for child care? That's $30,000 a year. Their combined income was $80,000 a year, or about $40,000 each. It would have been cheaper (and probably better for their kids) for one of them to stay home than to pay someone else one of their annual salaries to watch their kids.

"When Tawana Eason lost her administrative job with a large federal contractor six months ago, she went from making $60,000 to eking by on $400 a week. She has downsized from a $1,300-a-month townhouse in Germantown to a $600-a-month apartment in Laurel that is half the size of her old place.

Eason, 44, no longer shops at Nordstrom and Lord & Taylor, although she likes to window-shop sometimes at the Mall in Columbia. She has traded down from the Grill from Ipanema to Olive Garden and had to content herself with giving her sister a CD for Christmas, a far more modest gesture than the cruise she sent her mother on a few years ago."

Once again, you're making $60,000 a year and spending like there's no tomorrow: Nordstrom, Lord & Taylor, buying cruises as presents, frequenting restaurants where http://thegrillfromipanema.com/Meats.html">a single meal is $40 - $50 per person.

And then, a little more on the couple who used to make $200k a year:

"When she was a property manager of high-end apartment buildings such as the Watergate, designer duds were practically her uniform. She'd think nothing of spending $250 on a pair of shoes or buying a new blouse every week."

Tell me again, why are we supposed to feel sorry for these people?

[Fumesucker]

13. We are supposed to feel sorry for them because they are suffering..

Suffering at least according to the standards of the person who wrote the article.

For those of us who have made do with much less for far longer it sounds ludicrous as you point out.

[Kat45]

16. Not only $600/week for childcare, but paying her mother that $600 for it.

In the working class world I come from, one's parents and relatives provide free childcare. Grandparents love spending time with their grandchildren.

I agree that cat-sitting is likely not a viable business, but oftentimes if one spouse has a good income, it gives the other spouse the opportunity to pursue something her or she would love doing. I have often envied married people for having that option.If I had a spouse with a good income, I could have pursued a career as a freelance writer. Being single, I could not do that because it didn't pay enough money to support myself.

I think these stories about people slipping down in class are stories that need to be told, but it's unfortunate that the examples used are usually people who were originally quite well off, often UPPER middle class, not just middle class. It's tougher to feel sorry for them when they are reduced to living at a level that perhaps a majority of people are at.

[madinmaryland]

23. People fall on hard times. I see nothing about her and her husband being pukes.

Also, it states they had blown the $100K when they were both unemployed earlier.

Living in Maryland between DC and Balmer, we would be FUCKED if I lost my job. Fifteen years we have been married and our only vacation was our honeymoon to Cape Cod in January.

[lapislzi]

14. Everyone goes broke at different levels

I'm going to get flamed for this. I know it. I earn six figures. But: on Dec. 14 of last year, before I received my (generous) bonus check from my company, I had $232 in my checking account. I was paying for groceries with a credit card.

Don't feel sorry for me. (You won't; I know, and I won't feel slighted). I make my own decisions, some good, some bad.

Some good: bailed a friend out of debt so he could get an apartment. Therapy for daughter (necessary, and not covered by insurance). Vacation (necessary) with fiance. Wedding. Home repairs.

Some bad: expensive spa and hair treatments (unnecessary), flights to visit fiance, good wines (debatable).

Some non-negotiable: school and property taxes, mortgage payments, insurance payments, car payments.

All of which left me with $232 and a big Visa bill.

If I had less to work with, I would have done with less. But I used what I had, and I used it up. More than. Now I start again. I'm going to be more cautious this year, but no guarantees. Still NEED that vacation with the husband. I work hard for that. Kid still needs therapy (you can argue that I messed her up, and you might be right about that).

Flame. But we all go broke at different levels, and some of us are just plain bad money managers. Like me.

[MissB]

19. No flames.

You do what you have to do, but most importantly everyone gets a chance to learn from their mistakes.

Kids are a never ending investment, and I'd do practically anything for mine. Up to and including medical care/therapy/drug rehab. So no flames.

[Name removed]

22. Deleted message

Message removed by moderator. Click here to review the message board rules.

[angstlessk]

15. The middle class does not 'FALL' they are 'PUSHED' into poverty

[Name removed]

20. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Exilednight]

32. Here's the funny (not haha funny) part

I never hear anyone call themselves poor. Everyone finds a way to call themselves middle-class.

I think this is part of the problem with our society. There should be defined standards for middle class and poverty.

[PassingFair]

43. I call myself "working class".

I have to work, or I can't pay
basic bills.

[Statistical]

25. Horrible money managers.

I mean $200K in income. Save 15% = $30K in cold hard cash a year. Build up a nest egg. Savings account.

When you have a family making $30K a year combined I can see not building up an asset base but at $200K that is just ridiculous.

[Nye Bevan]

38. Yes. The stupidity was in assuming that the $200K per annum would continue for ever.

Sounds like they were very well off but frittered it all away instead of saving for a rainy day.

[sendero]

39. A much more interesting article.

... would cover what is happening to families making $40K who fell into this abyss.

[Earth_First]

42. +100

I'm sick and tired of hearing stories of six figure incomes having to 'adjust' their lives to "survive" on $30,000

[Raine]

41. Saving is not really encouraged in America

spending and being CONSUMERS (not citizens any longer) is what passes for being a good American. I guess that as long as it helps business it's just fine. :eyes: Unfortunately it doesn't do much for the people themselves to spend EVERYTHING they have on stuff they don't need. x(