“The Morose Middle Class”: At Best, Treading Water And At Worst, Sinking
The Middle Class is in a funk, its view of the future growing dim as fear rolls in like a storm.
An Allstate/National Journal Heartland Monitor poll released Thursday found that while most Americans (56 percent) hold out hope that they‘ll be in a higher class at some point, even more Americans (59 percent) are worried about falling out of their current class over the next few years. In fact, more than eight in 10 Americans believe that more people have fallen out of the middle class than moved into it in the past few years.
The poll paints a picture of a group that is scared to death about its station in life.
By the way, 58 percent of respondents in the poll viewed themselves as either middle class (46 percent) or upper middle class (12 percent).
According to the poll, Americans see a middle class with less opportunity to get ahead, less job security and less disposable income than the middle class of previous generations.
Respondents were most likely (52 percent) to say that losing a job would put them at the greatest risk of falling out of their current class, followed by an unexpected illness or injury in the family.
Most of those polled believe that higher education is the key to staying in the middle class, but many worry about its prohibitive cost and inaccessibility.
And who did most of them say is responsible for making it worse for the middle class? Congress, chief executives of major corporations and big financial institutions.
Of those who blame politicians, there is some evidence that Republicans get more of the blame than Democrats. A CNN/ORC poll released last month found that 32 percent of respondents thought that Democrats favor the middle class compared with 27 percent who believed the same of Republicans. Sixty-eight percent of those polled believed that Republicans favor the wealthy, compared with 24 percent who believed that Democrats do.
This anxiety about a shrinking middle class is understandable.
A Pew Research Center study, “The Lost Decade of the Middle Class,” released in August, found that “since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some — but by no means all — of its characteristic faith in the future.”
According to the report, “Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living.”
The report continued:
“Their downbeat take on their economic situation comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers. But the middle-income tier — defined in this Pew Research analysis as all adults whose annual household income is two-thirds to double the national median — is the only one that also shrunk in size, a trend that has continued over the past four decades.”
It’s important to note that many of the people who describe themselves as middle class would not be placed under that rubric by most objective observers. For instance, the Pew study found that 35 percent of people making $30,000 and under and 46 percent of those making $100,000 and over self-identified as middle class. (Meantime, six percent of those making $30,000 and under self-identified as upper class, and six percent of those making $100,000 and over self-identified as lower class. Go figure.)
As Pew pointed out, over the last decade, “middle-tier median household income” fell and median net worth plummeted, and people in the middle class said it was becoming harder to maintain their lifestyles.
To add insult to injury, another Pew report, released this week, found that “during the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7 percent of the wealth distribution rose by an estimated 28 percent, while the mean net worth of households in the lower 93 percent dropped by 4 percent.”
As The Washington Post reported in September after the release of a frightening Census report: “The vise on the middle class tightened last year, driving down its share of the income pie as the number of Americans in poverty leveled off and the most affluent households saw their portion grow.”
The wealthy have come surging back, riding record stock market highs, but many in the middle class are at best treading water and at worst sinking.
In his State of the Union speech in February, President Obama said that the “true engine of America’s economic growth” is “a rising, thriving middle class.”
It certainly looks as if that engine has stalled.
By: Charles M. Blow, Op-Ed Columnist, The New York Times, April 27, 2013
“The Stealth Sequester”: Americans Are Starting To Feel The Pain, They Just Don’t Know It Yet
So far, the much-dreaded “sequester” – some $85 billion in federal spending cuts between March and September 30 – hasn’t been evident to most Americans.
The dire warnings that had issued from the White beforehand – threatening that Social Security checks would be delayed, airport security checks would be clogged, and other federal facilities closed – seem to have been overblown.
Sure, March’s employment report was a big disappointment. But it’s hard to see any direct connection between those poor job numbers and the sequester. The government has been shedding jobs for years. Most of the losses in March were from the Postal Service.
Take a closer look, though, and Americans are starting to feel the pain. They just don’t know it yet.
That’s because so much of what the government does affects the nation in local, decentralized ways. Federal funds find their way to community housing authorities, state unemployment offices, local school districts, private universities, and companies. So it’s hard for most Americans to know the sequester is responsible for the lost funding, lost jobs, or just plain inconvenience.
A tiny sampling: Brandeis University in Waltham, Massachusetts is bracing for a cut of about $51 million in its $685 million of annual federal research grants and contracts. The public schools of Syracuse, New York, will lose over $1 million. The housing authority of Joliet, Illinois, will take a hit of nearly $900,000. Northrop Grumman Information Systems just issued layoff notices to 26 employees at its plant in Lawton, Oklahoma. Unemployment benefits are being cut in Pennsylvania and Utah.
The cuts — and thousands like them — are so particular and localized they don’t feel as if they’re the result of a change in national policy.
It’s just like what happened with the big federal stimulus of 2009 and 2010, but in reverse. Then, money flowed out to so many different places and institutions that most Americans weren’t aware of the stimulus program as a whole.
A second reason the sequester hasn’t been visible is a large share of the cuts are in programs directed at the poor – and America’s poor are often invisible.
For example, the Salt Lake Community Action Program recently closed a food pantry in Murray, Utah, serving more than 1,000 needy people every month. The Southeast Alaska Regional Health Consortium is closing a center that gives alcohol and drug treatment to Native Alaskans.
Some 1,700 poor families in and around Sacramento, California are likely to lose housing vouchers that pay part of their rents. More than 180 students are likely to be dropped from a Head Start program run by the Cincinnati-Hamilton County (Ohio) Community Action Agency.
Most Americans don’t know about these and other cuts because the poor live in different places than the middle class and wealthy. Poverty has become ever more concentrated geographically.
A third reason the sequester is invisible is many people whose jobs are affected by it are being “furloughed” rather than fired. “Furlough” is a euphemism for working shorter workweeks and taking pay cuts.
Two thousand civilian employees at the Army Research Lab in Maryland will be subject to one-day-per-week furloughs starting on April 22, for example, resulting in a 20 percent drop in pay. The Hancock Field Air National Guard Base is furloughing 280 workers. Many federal courts are now closed on Fridays.
Furloughs spread the pain. The hardship isn’t as evident as it would be if it came in the form of mass layoffs. But don’t fool yourself: A 20 percent pay cut is a huge burden for those who have to endure it.
Bear in mind, finally, the sequester is just starting. The sheer scale of it is guaranteed to make it far more apparent in coming months.
Some 140,000 low-income families will lose their housing vouchers, for example. Entire communities that depend mainly on defense-related industries or facilities will take major hits.
If you thought March’s job numbers were disappointing, just wait.
With the sequester, America has adopted austerity economics. Yet austerity economics is the wrong medicine at exactly the wrong time. Look what it’s done to Europe.
By: Robert Reich, The Robert Reich Blog, April 8, 2013
“Joining The 21st Century”: The GOP Can Learn A Thing Or Two From The Catholic Church
The cardinals of the Roman Catholic Church are hardly a liberal lot. They’ve doubled down against abortion and gay marriage (or even acceptance of gays). Church hierarchy has verbally slapped down nuns who have gently challenged the priorities of the church. So it really says something when the GOP last year nominated a white guy named Mitt to run for president, while the cardinals—who could be described as the tea party caucus of the Catholic faith—picked a South American guy named Jorge.
Cardinal Jorge Mario Bergoglio is from Argentina and speaks Spanish. That alone makes him a more 21st century choice for leadership (although he is a staunch social conservative, being vocal in his opposition to gay marriage). And it may well be as much about demographic strategy as it is about merit; the Roman Catholic Church, after all, does a better recruitment job in Latin America than in, say, the U.S. But the very fact that such a conservative group would pick a Latin American to be the public face (not to mention the spiritual leader) of the worldwide faith shows that they are way ahead of the U.S. Republican party.
Bergoglio, notably a Jesuit, took the name Francis, after St. Francis of Assisi, who was known for his vow of poverty. House Republicans, on the same day Francis became Pope, pushed through a bill to ban the granting of waivers on the work requirement for welfare—in other words, toughening up rules on the poor whom St. Francis wanted to help.
Many Republicans realize they need to do a better job with outreach. Louisiana Gov. Bobby Jindal, one of the young stars of the party, noted humorously in a dinner speech last Saturday night that he was hamstrung by his image. How could a skinny guy with dark skin and a funny name ever dream of becoming president?, Jindal quipped, as President Obama sat nearby. It was meant to be a joke, but the Republican candidate slate last year was, mainly, a slew of white men. The voter outreach and get-out-the-vote strategy was similarly ill-focused. The heavily traditional and old-fashioned church has made a move to join the 21st century. The GOP ought to consider following suit.
By: Susan Milligan, U. S. News and World Report, March 14, 2013
“When Common Sense Becomes Impermissible”: Among The First To Suffer The Pain Of Sequestration Will Be Hungry Children
The difference between a natural disaster and a disaster caused by politicians is that the latter will almost always hit the poor and the obscure most heavily, while a hurricane or a flood will at least sometimes spread the suffering more evenly.
As the “sequester” unfolds in Washington, we see this same old pattern holding firm: Republican leaders, now hustling to shirk responsibility for the catastrophe they predicted, insist those automated budget axes won’t do any damage at all.
Has anyone felt any pain yet?
Not during the first few days, of course, but when the cuts begin to bite a month or so from now, the first to feel it will be the unemployed and the destitute, for whom a few dollars of government support mean so much in their daily survival calculation. A decent policy would seek to spare them the brunt of political mistakes made by other, far more comfortable people, but this process permits no such choices – and the most vulnerable will by definition be hurt most.
According to the Center on Budget and Policy Priorities, which began to warn of sequestration’s very real impact weeks ago, the government will have to turn away as many as 775,000 women and children who qualify for WIC, the “highly effective” national nutrition program. Back when there was bipartisan opposition to letting people starve, legislators of both parties worked to ensure that WIC funding was sufficient to enroll every qualified family. Everyone seemed to agree that the program’s cost was trivial compared with the social, moral, and yes, economic benefits of properly feeding all hungry infants and children.
Not under the sequester, when common sense and compassion become impermissible. Not under the sequester, which not only enforces the cruel cuts but allows their perpetrators to deny ownership of the specific consequences.
What makes the automatic cutback in WIC funding even worse is that the amount involved is small in modern terms. The WIC budget will have to be reduced by about $699 million compared with 2012, or the same amount as the projected price of one “Littoral Combat Ship,” the Navy’s latest vessel project.
Evidently a principle is at stake that can be vindicated only by taking food from the mouths of pregnant women, breastfeeding women, and infants, however. Enforcing this decision – and it is a decision – are men and women who will assure voters of their fervent religious piety as well as their absolute devotion to America’s beleaguered families.
Or some of America’s families.
By: Joe Conason, The National Memo, March 5, 2013
“Welfare For The Rich”: What If The Outrage Over Excessive Welfare Extended To The Tax Code?
Senator Jeff Sessions (R-AL) has created quite a stir with his estimates that every household below the poverty level receives an average of $168-a-day (or about $61,000-a-year) in government welfare.
Sessions’ calculations are extremely controversial and overstate the amount of government assistance for those in poverty. But for the sake of argument, let’s assume he’s right. How would $61,000 in direct government spending and refundable tax credits for the poor stack up against tax subsidies for the rich?
It isn’t even close. Indeed, my colleagues at the Tax Policy Center figure that in 2011 households making $1 million and up got that much in average tax benefits from just two deductions–for charitable gifts and state and local taxes. Add a fistful of other preferences–such as deductions for mortgage interest and exclusions such as the one for employer-sponsored health insurance– and top-bracket households got far more in tax benefits than the poor got in means-tested assistance.
These estimates exclude low tax rates on capital gains and dividends which are, arguably, very different from, say, subsidies for mortgage interest or employer-sponsored health insurance. If you include preferential rates on investment income, households making $1 million or more got an additional $119,000 in tax benefits, on average, in 2011.
Keep in mind that tax rates on ordinary income were relatively low in 2011. Now that the rate for high-income households has gone up significantly, their tax subsidies will be even more generous.
I readily admit that on one level, this is a fairly silly exercise. But there is an important point here: In much public discourse, direct government aid for the poor is easily dismissed by the pejorative “welfare.” Yet, spending-like subsidies administered through the revenue code provoke far less outrage. This is true even though many of these tax preferences are economically indistinguishable from direct spending and often add far more to the deficit.
Take housing, for instance. CBO figures that the lowest-income 20 percent of households get an average of about $1,100-a-year in means-tested rental housing assistance. TPC estimates that the lowest-income households got no benefit from tax deductions for mortgage interest and real estate taxes in 2011. But those in the top 20 percent, who make more than $100,000, got an average tax benefit of $2,900. Those in the top 1 percent, who make an average of $1.5 million, did even better. They got an average tax break of $5,700, more than five times the benefit the government provided low-income renters.
As with so much of the tax code, these homeowner tax benefits are upside down. On average, the more you make, the more you get. This seems an odd design in an era when fiscal restraint is all the rage. Yet politicians still recoil when tax expenditures—the vast bulk of which go to middle-class and high-income households—are described as subsidies.
In recent years, both Democrats and Republicans (including their recent presidential candidates) did talk about capping or limiting tax preferences for the highest income households. But so far, at least, that talk has come to nothing. It would be helpful if Sen. Sessions directed some of his outrage to the more than $1 trillion in tax expenditures that litter the revenue code—much of which go to those who need help the least.
By: Howard Gleckman, Tax Policy Center, February 26, 2013
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