Re: #578
Pretty sure you (and many other people posting here) can write a much more convincing and relevant piece about the downwardly-mobile economic situation of middle class people than Gabler’s piece was.
The middle class used to consist of a large number of well paying union member blue collar families. Those have been decimated by the changes in the workforce and the union busting of the past 30 years. Used to be you didn’t have to go to college to have a middle class existence. Now it’s mostly minimum or low wage jobs in the private sector for those without college education, and most of them don’t have retirement benefits or 401ks. State and local government jobs and benefits have significantly diminished. We really can’t have a healthy middle class without these blue collar jobs.
Yeah, I grew up in a state with lots of those well paying blue collar jobs. They all had boats, houses, cars, and pretty nice lives. It was all an illusion because the companies couldn’t afford those union wages or the pension plans. Now the union wages are gone and the pensions are all being administered by the PBGC because the plans were all insolvent. It was a blue collar ponzi scheme and it’s probably not gonna come back because like all ponzi schemes, they collapse under their own weight eventually.
I think the next possible shoe to drop re: the points @notveryzen has made are for local and state government jobs. Public sector benefits are often out of whack with the private sector and municipal pensions are seriously underfunded.
@doschicos Hello California! But let’s not worry about that. Let’s all celebrate the “surplus” Governor Moonbeam has generated and figure out ways to spend that too. And some day, the federal government will be administering our state pension plans just like they did for GM, Chrysler, Boeing, UAL, etc…
Read this excellent book: http://smile.amazon.com/While-America-Aged-Bankrupted-Financial/dp/0143115383/ref=sr_1_1?s=books&ie=UTF8&qid=1461974081&sr=1-1&keywords=general+motors+pension
It’s about the growth of pension due to unions, and how corporations didn’t have the money to honor those promises.
A problem is that people are living longer and sometimes retiring earlier, drawing longer from the pensions. Plus if they weren’t forced to adequately fund them, they didn’t.
Seems to be the same old not saving enough for retirement, except on a pension fund scale instead of an individual scale. When the employer (whether private or government, whether or not a union is present) which has promised pension benefits to retirees is looking for money for other uses, it deludes itself by optimistically assuming a higher rate of return and lower cost of retiree pension benefits than is actually likely to be the case, so that it need not contribute as much as it really needs to. Similar to how individuals often budget for their own retirement savings.
Also, the rapid rise in medical care costs has blown away promises made by employers with respect to top-up (on top of the socialized Medicare) retirement medical benefits (not to mention that rapidly rising socialized Medicare costs are an increasing burden on taxpayers and government finances).
I find it amusing that we’re all dissecting Gabler’s choices and saying what we’d do differently, when the entire point of the article is that nearly half of middle-class Americans are in situations very similar to his. Maybe CC isn’t typical, but clearly, there is an epidemic of bad financial decisions going on in the US.
Of course there is. He was just not a good poster boy because he wasn’t middle class. Middle class people don’t buy houses where he did. They live modestly and they budget.
The bigger issue is that for many, any growth in wages has NOT kept pace with growth in expenses for housing, education, and food, to name a few categories. This has created tremendous pressures and increasing numbers of folks are living in the edge.
I have friends who teach in the public school. They couldn’t afford to buy a place until very recently, and even then it was a small 2-bedroom townhome. Both of them have masters degrees and have both worked for decades, including summers, living very modestly. They drive cars until they no longer are worth repairing. The wife was injured at work and couldn’t afford to get replacement glasses until her parents offered to help lend the $300-400 until she was reimbursed by worker’s compensation. They have adult children. One is living with her husband in a converted garage at grandparents’ place and the other lives with his girlfriend halfway around the island where housing isn’t quite so expensive. Finances are tight for all three households. All 6 of them are in the teaching profession.
@Himom, There was a story in San Francisco. A teacher can not afford a single house in SF.
@Massmomm, I like your post.
This is the story with so many in HI. Housing is crazy expensive and wages are very low. It’s a bad mismatch. Wages for folks with masters and experience in many white collar jobs runs about $50K, give or take (if you can get these jobs). Housing here is $500k-1M for old fixer-uppers in decent neighborhoods!!
@Himom, yep. Local story today…
http://www.newsweek.com/bay-areas-middle-class-being-squeezed-out-droves-report-454178
I have a q about San Francisco housing prices. I hear how insane they are, that 20 somethings rent out bunks versus apartments, you can’t buy anything decent for less than a million, blah blah blah.
But like any major city, there’s a service economy behind SF. There are people who wait tables, work as janitors and fry cooks, drive cabs, teach preschool, stock groceries, run mom and pop grocery stores, are hairdressers, are dry cleaners, maintain the electrical lines, man the front desk at hotels, etc. If “nobody” can live in SF without a high 6 figure income, where do these people live? The moon?
@Massmomm, with all due respect, CC is clearly not typical. Gabler’s article tries to make the point you claim, but he fails spectacularly. There is not so much an epidemic of bad financial decisions going on in the US, but an epidemic of financial insecurity. These are very different things, and this precisely what Gabler is missing. His lame unsuccessful attempt at linking his own situation with the vast majority of other Americans who have not necessarily made bad financial decisions diminishes the very real problem many of us are facing month to month.
Walk a mile in someone else’s shoes.
I understand many people here at CC wish to understand the problem, and how nice it would be if we can neatly lay blame for this issue on bad decisions - then we don’t have to face the fact that it is far more complicated than we have to think about, so we can simply get on with our lives, move on to the next Atlantic article.
I am not asking people to feel sorry for me and my family. I know that despite our precarious situation, we are still fortunate because my DH is able to provide the basics for us. Despite my medical condition, I still manage to volunteer quite a bit, and every time I am reminded how fortunate we are. We have been able to make the best out of what we have been dealt so far, and I am optimistic that we have raised our pups well enough that if god forbid something terrible happens to one of us, there will be others to help out.
Recall the closing seen of The Grapes of Wrath, which too many folks have forgotten
“The bigger issue is that for many, any growth in wages has NOT kept pace with growth in expenses for housing, education, and food, to name a few categories. This has created tremendous pressures and increasing numbers of folks are living in the edge.”
Yes, definitely. Even in the lower priced areas. My only explanation of the rise of the “Everything sucks, it’s somebody else’s fault, and I’m going to fix it” candidates. Nothing else makes sense.
Where I live, which is nowhere near as expensive as HI or SF, local govt officials have started requiring new residential projects to incorporate a certain number units of workforce housing into their projects. It’s fairly new and doesn’t yet put a dent in things but its a step in the right direction of helping to insure that people like teachers can afford to live in the communities in which they work.
@3puppies --I have a lot of compassion for you and your family’s situation. but like others here, I don’t understand why you’re conflating it with NG’s. Your experience is what he should have been writing about. It’s the real story, and it needs telling. For the life of me, I don’t understand why you continue to be defensive, when everyone here has made it very clear how very sympathetic they are. 
Re: #594
For any given income range, people in San Francisco and nearby areas have to choose “lesser” housing (i.e. smaller, more run down, in a “worse” neighborhood, with a worse commute, etc.) than those with similar incomes in lower housing cost areas. They may also crowd more family or friends into one place than they would elsewhere.
Much of the housing that people in lower or moderately paid service jobs (like waiter, teacher, shopkeeper, etc., not services like physician, lawyer, software developer, etc.) live in would likely be considered unacceptable (too small, too run down, “bad” neighborhood, too long of a commute, etc.) by many posting on these forums.