America's new poor: The end of the middle-class dream The men clustered in the shade of trees, in the 32°C heat of a car park in Atlanta, form the lowest layer of America's so-called middle class. They stare, alert like greyhounds, at the vans leaving the hardware store. When one pulls up they rush, 15 or 20 together, to the driver's window to negotiate. The hired man leaps in with his bag of tools: he'll earn $10 an hour, cash, for basic building work. But even the lowest layer has layers within: the Hispanic men are recent migrants; mainly young. The African Americans are older, gaunt. "They're only hiring Mexicans," one tells me, and gives a hard-faced stare when I ask why. At Goodwill, a charity-run job centre in Atlanta, you can meet the next layer up: former legal clerks, accounts secretaries, computer technicians -- the whole story of black self-advancement is present in this room. But now it's all one story: most have been out of work for months, some for years. Go to the pristine cul-de-sacs where this supposed middle class lives and you will find, every couple of streets, a lawn as high as a wheatfield, indicating a home that has been repossessed. Even the survivors hang on by a thread. Juan and Kenyoda Pullen have been renting here since their home was repossessed. Sometimes the rent does not get paid. When they lost their jobs -- as postman and bank clerk -- their combined income dropped from $75 000 to $14 000 a year. Do you still feel middle class, I ask them. They do, they say, "though we're not really certain what that means any more". America's "middle class" was always a construct of ideology, indeed the expression of a dream. For the black and Mexican casual workers in the car park the dream is the thing they have in common: they are there because they prefer work to welfare. They believe themselves to be entrepreneurs and will battle against the economic headwind to the point of self-abasement to avoid admitting otherwise. Can it ever come back? Yet America's middle class is disappearing. A lifestyle sustained for 30 years by rising debt is dissolving as the credit dries up. And the question beyond the crisis is: can it ever come back? Figures released last month by the US Census Bureau show it will be hard. Middle incomes are lower, in real terms, than in 1999. The median income, stagnate for a decade, fell by 4,2% once the crisis hit. Since December 2007 more than six million Americans have been pushed below the official poverty line. It is dawning on millions that the term middle class might be a misnomer. But the label "working class" does not fit either: in the US it denotes a lifestyle choice involving trade union activism or support for the grittier baseball teams, not a sociological category. This sudden collapse in lifestyle will have economic and psychological impacts long after the crisis is over. Since the 1980s US growth has been driven by the spending power of the salaried workforce. In turn the consumer has been the dynamo of global growth. To get things back to the way they were the US has to find a way to create nine million jobs, plug the gap in disposable incomes and reopen the personal credit system to the millions excluded from it. Judged against that, the Obama fiscal stimulus has failed. The credit system, having created the crisis, compounds the agony: the "payday loan" stores -- shameless and neon amid the closed-down high streets -- do brisk business. So do the credit reference agencies: Juan Pullen told me he'd actually been refused a job because the employer had checked his credit score: "They think credit indicates character; bad credit equals bad character," he shrugs. Unable to borrow or earn, a whole generation is being shut out of the American lifestyle. Meanwhile, some states have begun a race to the bottom: slashing welfare, labour regulations and local taxes to attract investment. High-wage companies close and relocate to low-wage states, and foreign investment flows to the towns where labour costs are lowest. These states are being transformed by the arrival of low-waged Hispanic migrants even as the right-wing politicians who support the economics rail against the demographics. Unhappiest place in America As a result the so-called Sun Belt, identified by Republican strategist Kevin Phillips in the 1970s as the new political bedrock of conservatism, now feels like the unhappiest place in America. Median incomes in the south are, on average, $8 000 lower than in the north-east; poverty rates are higher than anywhere else in America -- and so are the racial and religious tensions. In the midterm elections politicians have promised to "do something" for the middle class. The kindest thing they could do is tell the truth: Americans have been living a middle-class lifestyle on working-class wages -- and bridging the gap with credit. And it's over. In a free-market society the real middle class is always a minority: if your street has a gate and a security camera at the end of it then you are middle class. A real middle-class kid can afford a college education, not a web-based degree. The real middle-class family does not skip meals or find its cars trapped in the repair shop because of unpaid bills. And even in America, if you are standing in 32°C heat, jostling with 30 other guys for a few hours' work, it is the man in the station wagon curling his finger at you that is middle class -- not you. - guardian.co.uk © Guardian News and Media 2010 PAUL MASON http://mg.co.za/article/2010-10-13-americas-new-poorthe-end-of-the-middleclass-dream The original of this article was here http://www.guardian.co.uk/commentis...oct/12/end-of-the-middle-class-american-dream. the original was recently removed
"Dreams will get you nowhere, a good kick in the pants will take you a long way." -- Baltasar Gracian "Living in dreams of yesterday, we find ourselves still dreaming of impossible future conquests." -- Charles Lindbergh "Take everything easy and quit dreaming and brooding and you will be well guarded from a thousand evils." -- Amy Lowell "The most pitiful among men is he who turns his dreams into silver and gold." -- Khalil Gibran "The best way to make your dreams come true is to wake up." -- Paul Valery "People are so busy dreaming the American Dream, fantasizing about what they could be or have a right to be, that they're all asleep at the switch. Consequently we are living in the Age of Human Error." -- Florence King
Americans need to learn to live without debts. Individuals cannot just spend their ways into prosperity. Same go to nations. Long term growth and welath are determined by saving and invetsments. I am still optimistic. America is still a very resilient country. Ours strength and potential are those that cannot found on the balance sheet.
Somebody in Russia, commenting on an article from the UK about how the US is crumbling. And I should take this seriously?
Well, your "serious" me a little worried. If to you will be ordered to lie down, you will lie down. Like most of modern age "heroes" were in Iraq ,U.S. "proud" of you. Paper soldier. I'm more concerned about the health of my country.
The article (linked to in the OP) is inaccurate and misleading. One passage seems to ignorantly declare the free market as the problem. "The credit system, having created the crisis, compounds the agony" That is shallow, stupid thinking......It was the Federal Government and their 'affordable housing' programs that lowered borrower qualification and mandated that credit be granted with the 'hammer' of the Fair Housing Act. This had the effect of loans being granted to insolvent folks. However those loans were backed by Fannie Mae (the creator of those programs) which lent them undue viability to be bundled into investment securities. When folks could not afford their payments, the foreclosures ensued causing banks to 'dump' their Real Property assets at lower than market prices. Suddenly, a lot of folks were 'under water' on their home mortgages (mortgage worth more than their equity). The bottom fell out of those mortgage-backed investment securities causing a general down-turn in the economy. Blaming the 'credit system' is irresponsible at best and a lie at worst.
Thanks for the insults, especially since you do not know me or what I believe. This entire problem was already existing, and was only worsened because of the Mortgage Crisis. This economic downturn was already comming even before this happened. Business crisis in Japan and large areas of Europe were already affecting things in the US. We were in a minor recession, then the man-made Mortgage Crisis hit. The problem was not credit. The problem was that the "sub-prime" mortgage system tried to make homeowning affordable to those that could not qualify for a standard loan. These loans were set up with a low down payment, and then low payments for 5-7 years. And the ability to pay them off was configured on the assumption that the economy would continue to grow at the rates it was in the first 5 years of the 21st century. But the downturn prevented that from happening. Then suddenly you had a lot of people that could not afford it when their mortgage payments increased. They knew when they took the loans out that this would happen, but a lot did not plan. In reality, only around 10-15% of people with those loans defaulted, but this created waves through the property market, causing decreased home prices which often times made the propert worth less then the mortgage (something known to all car buyers). The OP might have had a point, if this was only a crisis that affected the US. However, it is a global problem. England, Greece, Portugul, Mexico, this is a world wide issue. And trying to place blame the way it has, it is entirely incorrect and written from people who really do not seem to understand the global economy.
Lots of good high-paying jobs here in Canada. You don't have to give up your U.S. citizenship to work here.
There are good jobs in the US also. The problem is that many are in places where people do not want to live. Here in El Paso there is no shortage of jobs. There is still a lot of construction going on, but how many people want to live here?
Yes, and the US has large investments in Europe too. Remember, the housing crisis affected the securities market as well which is/was liquid and global. No this crisis sits squarely on the shoulders of liberal-socialist political wonks 'tweaking' the 'system' to give handouts to their constituents.
