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Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: FINate on April 19, 2016, 10:41:16 AM

Title: The Secret Shame of Middle-Class Americans
Post by: FINate on April 19, 2016, 10:41:16 AM
http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/

Nearly half of "middle-class" America would struggle to come up with $400 to cover an emergency.  Whatever savings we do have goes to things like weddings ("We have no retirement savings, because we emptied a small 401(k) to pay for our younger daughter’s wedding.")

Not scolding the guy - he admits that he's made the mistake of living beyond his means for too long and it seems he's working hard to correct this. At the same time, he's giving people an out by putting blame on banks/CC companies, universities, etc. Now, I'm no fan of these entities, I think they're all blood suckers. But the sad reality is that no one *really* cares about your finances other than you. Politicians only care about getting reelected, and no one wins elections by talking about responsibility and financial independence. Besides, all the politicians are in cahoots with these industries. So I don't see much hope of this being solved at a policy level.

Perhaps the overarching problem is that the "middle-class lifestyle" has inflated beyond what we can afford, and people just assume this is how they're expected to live. You don't need to send your kids to expensive universities, or drain your retirement account to pay for weddings, or put your kids in private schools, or buy cars on credit, or pay for cable or expensive phone plans. It's unfortunate that he doesn't advocate for a different perspective on our lifestyles and instead ends the article with a defeatist tone: "What so many of us have been suffering for so many years may just seem like a rough patch. But it is far more likely to be our lives."
Title: Re: The Secret Shame of Middle-Class Americans
Post by: MgoSam on April 19, 2016, 10:45:40 AM
47% of Americans? Must be the same people that Romney was referring to.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: RFAAOATB on April 19, 2016, 11:20:25 AM
The Middle class life is not available to 60% of Americans.  So now in order to have a decent retirement and not be drowning in debt, I'm pretty much living like a poor most of the time.  I don't really WANT to live like a poor, but have the ability to defer gratification to a certain degree.  Telling people not to live above their means or reduce their desires doesn't seem to help for the majority for some reason.  It also doesn't help that it seems to take a lot more means to have a good house, two good cars, vacations, kids, and a safety net these days.  Right now I only have a meh house, one car for two adults, a small safety net, and working on yearly vacations and trying for a kid.  I am living less large than my parents and it sucks.  How the majority deals with this problem is going to be a struggle.

Two different goals/questions:
Are you living more or less large than your parents at your age? 
Do you have a better net worth than your parents at your age? 

If the rich keep getting richer, and that ain't you, then how rich do you need to be to be in that positive feedback loop?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ShoulderThingThatGoesUp on April 19, 2016, 11:39:39 AM
If you want to live a 1972 lifestyle it would really be quite cheap.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: infogoon on April 19, 2016, 11:42:20 AM
TL;DR version - "It's expensive to live in the Hamptons, and you probably shouldn't try to do it as a freelance writer with unpredictable income."
Title: Re: The Secret Shame of Middle-Class Americans
Post by: RFAAOATB on April 19, 2016, 12:14:41 PM
Another way to look at it.  It's easy to be poor.  You don't have money to worry about.  It's easy to be rich.  You don't have to worry about money.  How do you be middle class?  How do you know what's reasonable for houses, kids, cars, college, vacations, retirement, and everything else?  If you base it on your peers, and most of your peers are putting up a happy front, then you get an unrealistic baseline.  If you base it on your parents, and your economy is worse than theirs was then you get the feeling you are falling behind.  We may be smarter than average, but these average numbers are pretty dumb.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheAnonOne on April 19, 2016, 12:22:30 PM
The Middle class life is not available to 60% of Americans.  So now in order to have a decent retirement and not be drowning in debt, I'm pretty much living like a poor most of the time.  I don't really WANT to live like a poor, but have the ability to defer gratification to a certain degree.  Telling people not to live above their means or reduce their desires doesn't seem to help for the majority for some reason.  It also doesn't help that it seems to take a lot more means to have a good house, two good cars, vacations, kids, and a safety net these days.  Right now I only have a meh house, one car for two adults, a small safety net, and working on yearly vacations and trying for a kid.  I am living less large than my parents and it sucks.  How the majority deals with this problem is going to be a struggle.

Two different goals/questions:
Are you living more or less large than your parents at your age? 
Do you have a better net worth than your parents at your age? 

If the rich keep getting richer, and that ain't you, then how rich do you need to be to be in that positive feedback loop?

This is horribly full of self-pity.

Am I living (at age 25) a better or worse life than my parents at 25? Through technological advancements I carry around the sum of human knowledge in my pocket. So I would say better.

 
The "Middle Class" lifestyle is a ridiculous notion. In the 40s->60s it was a small house (900sqft) and one car (if you were lucky) Mom couldn't work because it wasn't right and minorities had a rough time doing basically anything.

You have an awfully rosy picture of the past.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Drifterrider on April 19, 2016, 12:25:10 PM
.  If you base it on your parents, and your economy is worse than theirs was then you get the feeling you are falling behind.

My parents had one TV, one phone, no cell, no computer, no internet.  We seldom went out to eat.  They didn't always have two cars but my father did buy a new one for my mom in 1967 because he left for View Nam and wanted to have something reliable (no A/C).

My mother made and still makes a lot of her own cloths.  My father bought a house in 1956 then rented it to someone else because he could turn a profit and live in a less expensive place. 

My parents saved.  Both worked.  They SAVED.  That is the key.  One can always save something and, if one job doesn't provide for what you need, get a second one (they did that too).
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metric Mouse on April 19, 2016, 12:28:22 PM
Another way to look at it.  It's easy to be poor.  You don't have money to worry about.  It's easy to be rich.  You don't have to worry about money.  How do you be middle class?  How do you know what's reasonable for houses, kids, cars, college, vacations, retirement, and everything else?  If you base it on your peers, and most of your peers are putting up a happy front, then you get an unrealistic baseline.  If you base it on your parents, and your economy is worse than theirs was then you get the feeling you are falling behind.  We may be smarter than average, but these average numbers are pretty dumb.

Maybe you should base your lifestyle upon your income, and not on what your parents make or what your peers live like.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ohana on April 19, 2016, 12:52:52 PM
It's hard not dismiss what he's saying because 1) he's full of self-pity and 2) he did decide to live in the Hamptons (the poor Hamptons, as he points out, but the Hamptons nonetheless).  Plus if you're on this site you know it's possible to save on a middle class income.  But he's right in pointing out that income is pretty much stagnant for the majority of Americans.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: RFAAOATB on April 19, 2016, 12:58:43 PM
Maybe you should base your lifestyle upon your income, and not on what your parents make or what your peers live like.

Another way I'm living less large than my parents.  Not making as much (not even inflation adjusted!) means I got to stretch pennies into piano wire to have some semblance of comfort and security.  The subset of forum members here is smarter about money than the general population and can react well to the economic climate. Despite that, aside from technological innovation, it seems things in general are getting worse.

We are equipped with the knowledge and discipline to make financial improvement a reality.  I've got a slightly above median income and a significant above median net worth.  This is more to the fact that median net worth numbers are embarrassingly low than any extraordinary wealth on my part.  What is the general population to do?  All at once improve their discipline and ability to defer consumption until future income can sustain it?  Although that's my plan I don't see it happening on a large scale.

So.... What do we do about the secret shame of Middle-Class Americans?  Unfortunately most people would rather learn from their own mistakes like the author than from anyone else.  I sure did when I had my money problems a few years ago which makes me super risk averse today.

Another long term thing to think about... If the middle class is backsliding, what happens when the middle class shrinks to such a degree that we just have a poor society and a rich society?  Can such a land exist without social upheaval?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: golden1 on April 19, 2016, 01:15:22 PM
Quote
TL;DR version - "It's expensive to live in the Hamptons, and you probably shouldn't try to do it as a freelance writer with unpredictable income."

Yes, this guy is the prime example of what NOT to do in almost every respect.  Part of his problems were just bad luck, but a LOT was bad decisions. 

1) Choosing to be a writer and live in NY.
2) Buying a house in the Hamptons
3) Mortgaging 401K for a wedding.(!!!!!)
4) Having his wife quit her job and become unmarketable. 
5) Insisting on his parents paying his kids college tuition. 

This guy made some really bad choices, and he knows it.  I hope that expensive education that the kids got will help them bail him out when he hits retirement age, because that is about his only option.

What I got out of this article is how easy it is these days to make these bad choices and dig yourself into a hole you can't get out of.  It is very easy to over extend yourself to the point where a minor emergency will drown you.  Everything in this culture pushes you to make terrible choices.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Warlord1986 on April 19, 2016, 01:28:59 PM
The Middle class life is not available to 60% of Americans.  So now in order to have a decent retirement and not be drowning in debt, I'm pretty much living like a poor most of the time.  I don't really WANT to live like a poor, but have the ability to defer gratification to a certain degree.  Telling people not to live above their means or reduce their desires doesn't seem to help for the majority for some reason.  It also doesn't help that it seems to take a lot more means to have a good house, two good cars, vacations, kids, and a safety net these days.  Right now I only have a meh house, one car for two adults, a small safety net, and working on yearly vacations and trying for a kid.  I am living less large than my parents and it sucks.  How the majority deals with this problem is going to be a struggle.

Two different goals/questions:
Are you living more or less large than your parents at your age? 
Do you have a better net worth than your parents at your age? 

If the rich keep getting richer, and that ain't you, then how rich do you need to be to be in that positive feedback loop?

You can't hear it, but I'm playing you a note on the world's tiniest violin.

You have a home, a vehicle, a safety net with the opportunity to grow, and you take yearly vacations. You bring in more than a median income, and you have more than the median net worth. You're not 'a poor.' 

I don't know how much my parents had when they were my age. I do know they started out with nothing. Mom's wedding dress was $50, and Granddad and Grandmother gave them $200 to make rent that month. Now they have over a million dollars in assets. If I'm frugal then it's very likely that I can do the same.

Your comment about things getting worse is bullshit. In December of 2009 the unemployment rate was 9.9%. In March of 2016 it's 5.0%.  Source: http://data.bls.gov/timeseries/LNS14000000

Things are getting better. The secret shame of the American Middle Class is that they listen to people telling them 'it's not your fault' too much.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 19, 2016, 01:33:42 PM
Although household income is basically flat, we are better off today as compared to the 1970s. It's not just the advances in computing and that we carry the sum of the world's information around in our pockets, though that plays a large role. We get much more value for our money these days. Let's take automobiles as an example.

In 1972 a new car cost around $3800. Adjusted for inflation, that's about $20,000 in 2016 dollars. MSRP for a Honda Fit is just under $16,000. However, the Fit is a *way* better vehicle. The autos in 1970s were piles of garbage: poor design, unsafe, poor gas milage, bad workmanship (check out the huge gaps in the body on "classic cars"), very very bad operational lifespan before needing MAJOR rebuilds/maintenance. I remember riding around in several year old vehicles back then and I could see the road passing under me through the rusted out floorboards - it was fun to throw stuff through those holes! Nowadays cars are so well built: extremely safe, great fuel economy, long lasting (should get hundreds of thousands of miles), just so much better all around...for about the same amount of money. The low cost and long operating lifespan means that cars actually cost much less now. The same thing can be said of most appliances, building materials, bikes, computers, and so on.

I think the primary culprit is that we are steeped in mass media which 24x7 projects an aspirational image of "middle-class" that is beyond the means of people who would previously be considered middle-class. So people feel poor if they don't drive new cars, or don't take a fancy vacation every year, or don't have the latest clothing styles, or the latest gadgets.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: RFAAOATB on April 19, 2016, 01:56:54 PM
I think the primary culprit is that we are steeped in mass media which 24x7 projects an aspirational image of "middle-class" that is beyond the means of people who would previously be considered middle-class. So people feel poor if they don't drive new cars, or don't take a fancy vacation every year, or don't have the latest clothing styles, or the latest gadgets.

This is something.  It's a lot easier to look up for inspiration than to look down.  Houses, cars, and schools are some of the fastest ways to lose more money than you planned to.  Curating social media makes the bigs seem normal, which makes normal seem small.  Like most people, I pretty much can afford anything, I just can't afford everything.  Right now although I want the big house, BMW, and Rolex my priority is being a millionaire, which means saving more than spending and living like I'm on the lower side 80% of the time.  The other luxuries are pushed off in the future to "some day" where most other people are pushing their retirement planning.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: BlueHouse on April 19, 2016, 02:23:27 PM
The author still doesn't realize the extent of the damage he has done and is continuing to do.  The fact that his daughter allowed him to pay for her wedding, even after knowing that her college costs wiped out both her grandparents and her parents retirement savings, astounds me.  But that is clearly a product of her upbringing and she has obviously been taught that the American Dream comes packaged with a bow and a price tag attached. 

I wish he would come on here and do a case study and then implement some of the suggestions that mustachians would give him.  I would enjoy a follow up article if he really tried to make some differences in his life.  I bet he even has cable!

Quote
I know what it is like to subsist for days on a diet of eggs
Boo-hoo, so do I.  I do it every time that I'm left with a carton of eggs that is about to expire because I can't stand the idea of throwing them away.  It's funny what a difference in attitude can do.  When I go days eating the same thing to avoid waste, I think I'm badass.  Unfortunately, the author things he's pitiable for doing it.  Hey, at least you have food with protein! 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on April 19, 2016, 02:36:32 PM
The Middle class life is not available to 60% of Americans.  So now in order to have a decent retirement and not be drowning in debt, I'm pretty much living like a poor most of the time.  I don't really WANT to live like a poor, but have the ability to defer gratification to a certain degree.  Telling people not to live above their means or reduce their desires doesn't seem to help for the majority for some reason.  It also doesn't help that it seems to take a lot more means to have a good house, two good cars, vacations, kids, and a safety net these days.  Right now I only have a meh house, one car for two adults, a small safety net, and working on yearly vacations and trying for a kid.  I am living less large than my parents and it sucks.  How the majority deals with this problem is going to be a struggle.

Two different goals/questions:
Are you living more or less large than your parents at your age? 
Do you have a better net worth than your parents at your age? 

If the rich keep getting richer, and that ain't you, then how rich do you need to be to be in that positive feedback loop?

This is interesting, and I think it would be even more interesting to look at massive statistics.  I had a discussion with someone about this about fifteen years ago.

When I was a kid, my parents:
- Had a small-ish house with one bathroom (1300 sf?) on an acre in the country
- Dad worked, mom stayed at home
- We had 1-2 cars, always old and in some amount of disrepair
- Generally 3-4 kids at home
- We never ate out.  We had a garden.  We never vacationed.  We had one vacation when I was 7, drove to NC to visit an uncle.  2-3 times we went camping (borrowing camping gear) to Lake Erie (1.5 hours away).
- There was no cable TV, only 3-4 stations.  Only hand-me-down clothing.  Never went to movies.
- Socialization was at my grandparent's camp on the weekends
- We had one phone.  No cell phones or internet.
- Regular vacations were not for the middle class.  Only a few friends went on vacation.  Everyone else just drove to go camping.
- The safety net was family and social security
- We did not have health insurance

We were probably poor, but maybe considered lower-middle class?  Looks like for a family of 4, we were making $12k a year, and the poverty level was about $10k.

My husband's family was middle class, and they went on a vacation to Europe every other year, to visit family.


Compared to us - it's kind of hard to pick when to make the comparison.  15 years ago husband was in grad school, I had a job, and we had no kids.  Now we have 2 kids.
- Two engineers with good jobs
- a meh house - much smaller, older than my parents' but in a better location
- meh cars
- an annual vacation or two, but generally keep it to driving/ camping.  Once every other year fly to visit family
- Health insurance (double covered)
- Dental insurance (I rarely could afford the dentist at a kid)
- Vision insurance
- a 401k apiece
- cable internet, two cell phones and even more electronics at home

I guess even with being frugal, I'm way ahead of my parents, but it's kind of an unfair comparison because we both have degrees and are engineers (my dad was a mechanic, my mom was a SAHM and then went back to work as a bank teller)

A more fair comparison would be my brother and SIL who still live in my home town.  Two decent jobs (prison guard and at a bank), vacations to Disneyland, a house with a crappy kitchen that they cannot "afford" to upgrade, lots of nice new clothes.  New cars.  State pension.  They live pretty large though, and eat out a ton.

While I don't disagree that times are, in many ways, tougher than they used to be.  I must admit that *most* people I encounter aren't comparing apples to apples.

Cell phones and internet for one thing.  I would never suggest that someone not have these items (though five years ago, I did not have a cell phone).  But it seems like people are used to a better quality of things.

But even past cell phones and internet.  Cars are bigger.  They use more gas.  They are newer.  My parents once owned 2 Fiats!  Nobody had a truck, SUV, or minivan.  Every car was bought used.  Every one.  New clothing?  I got my first new winter jacket in 10th grade.  I owned 2 pairs of shoes, hand me downs were gathered FIRST.  And we never ever ate out.  Maybe once a summer we would get soft serve ice cream at the burger place.  And during "back to school shopping" (where we would each get 1 shirt, new socks, and 1 pair jeans), we would have lunch at McD's.  Except for those 2-3 years where we were not even allowed to go shopping with mom, because we couldn't afford McD's.

And health insurance - we didn't have any.  We paid cash for the crappy dentist and the doctor.  But paying for our own health care came before "wants" like vacations, TV, etc.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: fattest_foot on April 19, 2016, 02:41:04 PM
The economist quoted pretty much summed it all up, despite missing his own point:

"According to Johnson, economists have long theorized that people smooth their consumption over their lifetime, offsetting bad years with good ones—borrowing in the bad, saving in the good. But recent research indicates that when people get some money—a bonus, a tax refund, a small inheritance—they are, in fact, more likely to spend it than to save it. “It could be,” Johnson says, “that people don’t have the money” to save. "

People spend money they don't have, and then say "I don't have money to save." Yeah, no kidding...you spent it all on discretionary goods.

I can almost guarantee if you ask any 20 or 30 something on the street if they have money to save and they say no, that they also have an iPhone.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on April 19, 2016, 02:43:02 PM
Although household income is basically flat, we are better off today as compared to the 1970s. It's not just the advances in computing and that we carry the sum of the world's information around in our pockets, though that plays a large role. We get much more value for our money these days. Let's take automobiles as an example.

In 1972 a new car cost around $3800. Adjusted for inflation, that's about $20,000 in 2016 dollars. MSRP for a Honda Fit is just under $16,000. However, the Fit is a *way* better vehicle. The autos in 1970s were piles of garbage: poor design, unsafe, poor gas milage, bad workmanship (check out the huge gaps in the body on "classic cars"), very very bad operational lifespan before needing MAJOR rebuilds/maintenance. I remember riding around in several year old vehicles back then and I could see the road passing under me through the rusted out floorboards - it was fun to throw stuff through those holes! Nowadays cars are so well built: extremely safe, great fuel economy, long lasting (should get hundreds of thousands of miles), just so much better all around...for about the same amount of money. The low cost and long operating lifespan means that cars actually cost much less now. The same thing can be said of most appliances, building materials, bikes, computers, and so on.

I think the primary culprit is that we are steeped in mass media which 24x7 projects an aspirational image of "middle-class" that is beyond the means of people who would previously be considered middle-class. So people feel poor if they don't drive new cars, or don't take a fancy vacation every year, or don't have the latest clothing styles, or the latest gadgets.
This is a very good point.  I can't remember which book it was "The Way We Never Were", or "The Two Income Trap" or ???

Anyway, a book I read at some point talked about how it requires 2 incomes to be middle class now.  In some ways, we spend more - housing is more expensive, particularly if you want a decent school district.  Entertainment is cheaper, and cars are a much better deal.  Cars didn't used to survive past 100,000 miles, for example.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: fruplicity on April 19, 2016, 02:43:49 PM
In my field of work (college finances), I talk to these people every day and it's extremely shocking how much denial there is, and lack of consideration for everyone's future financial security. People look at me and say, "how do people pay for this?" At first I answered honestly with, "well they usually have saved a bit, they lower their expenses and don't put as much in retirement while they're paying for college, and a lot of people borrow loans too." But no matter what I say there is a defensive answer about whatever situation/s befell them to cause their current financial circumstances, and how impossible it is to use ANY of their current income or savings to pay for college, or to put their child in a position to have to work or borrow loans while in school. WTF??? I just want to scream at them, "I pay more than my MORTGAGE annually for childcare and I am STILL saving 15% of my income and paying down my student loans early!! And my coworkers in single-income families have STILL managed to max out their retirement savings years in a row!!!"

It's also getting hard because some of my absolute closest friends seem to be setting themselves up for these situations too. They've bought more house than I imagine they can possibly afford, they have all relied on credit cards, family assistance, and/or borrowing from retirement to make adulthood work (both due to emergencies and lifestyle choices). And most of them have made offhand comments about the comparative modesty of the house we chose to buy. They don't ever talk about money with me although they know my attitude about it. So I know it's really none of my business and we are lucky in our own way, but I can't help fearing for their future, especially when it comes to paying for their kids' educations and retirement. 

One final thought - did anyone else completely not identify with this:
Quote:
"But, without getting too metaphysical about it, these are the choices that define who we are. We don’t make them with our financial well-being in mind, though maybe we should. We make them with our lives in mind. The alternative is to be another person."

Ummm.... huh? My definition of "who I am" is directly intertwined with my financial well-being. Isn't that... the way it should be????
 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Warlord1986 on April 19, 2016, 02:55:31 PM

One final thought - did anyone else completely not identify with this:
Quote:
"But, without getting too metaphysical about it, these are the choices that define who we are. We don’t make them with our financial well-being in mind, though maybe we should. We make them with our lives in mind. The alternative is to be another person."

Ummm.... huh? My definition of "who I am" is directly intertwined with my financial well-being. Isn't that... the way it should be????

That's the grown-up way of saying: "But I waaaaaaaaaaaaaant it and if you say I made bad choices then you're a meanypants who is denying how special I am!"

That article was disgusting. -.-
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Cranky on April 19, 2016, 03:34:38 PM
What it takes to be middle class is a lot more stuff than it did when I was growing up - because both my parents and my in-laws were definitely middle class (my family, an engineer and a teacher, once my mom went back to work in the mid-60's) (dh's family, an engineer and a sahm.)

We both grew up in small houses. We had one car families until we were in our teens. We took occasional vacations, mostly to visit relatives, though dh's family made trips to Mexico as they lived in the west. People bought furniture when they got married and pretty much stuck with it, through thick and thin - "decorating" was an upper class thing.

Our parents were able to put all the kids through college and retired comfortably, though quietly, in paid for houses.

And dh and I are the same. We were really broke when we were in our 20's, because we were young. Dh graduated from college with a degree in science and worked in retail. I guess there were some people who got super great jobs right out of college, but we were not them. I worked at a grocery store.

I think that the bar has been raised awfully high, and the more you watch tv, the higher it seems to be. Plus, I suspect that the Hamptons idea of middle class is pretty elevated.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: pachnik on April 19, 2016, 03:45:13 PM
What it takes to be middle class is a lot more stuff than it did when I was growing up - because both my parents and my in-laws were definitely middle class (my family, an engineer and a teacher, once my mom went back to work in the mid-60's) (dh's family, an engineer and a sahm.)

We both grew up in small houses. We had one car families until we were in our teens. We took occasional vacations, mostly to visit relatives, though dh's family made trips to Mexico as they lived in the west. People bought furniture when they got married and pretty much stuck with it, through thick and thin - "decorating" was an upper class thing.

Our parents were able to put all the kids through college and retired comfortably, though quietly, in paid for houses.

And dh and I are the same. We were really broke when we were in our 20's, because we were young. Dh graduated from college with a degree in science and worked in retail. I guess there were some people who got super great jobs right out of college, but we were not them. I worked at a grocery store.

I think that the bar has been raised awfully high, and the more you watch tv, the higher it seems to be. Plus, I suspect that the Hamptons idea of middle class is pretty elevated.

+1  I had a similar upbringing.  My parents have the same furniture they had when I was a kid 50 years ago.  It is a nice Scandinavian design and they get it recovered every once in a while. 

I agree though that the bar has been raised higher.  It takes more to be middle class now then it did a generation or so ago.  I also think TV/advertising has something to do with it. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Taran Wanderer on April 19, 2016, 04:50:58 PM
Cry me a f&$@ing river...
Title: Re: The Secret Shame of Middle-Class Americans
Post by: iris lily on April 19, 2016, 04:53:27 PM
TL;DR version - "It's expensive to live in the Hamptons, and you probably shouldn't try to do it as a freelance writer with unpredictable income."
Spit wine, its wne and jokes time!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FireLane on April 19, 2016, 05:34:43 PM
I hate to say it, but I have a hard time feeling bad for this guy. Nothing that happened to him was an unpredictable crisis that came out of the blue. He didn't have an expensive health problem, his house didn't burn down or flood, he didn't get sued. All of it was because of decisions he made.

He chose to be a full-time writer, a job with an unpredictable income at the best of times. He chose to live in the NYC region, a high-COL area to begin with, and compounded the expenses by sending both his daughters to private school. He got himself sunk in credit card debt and was making only the minimum payments. When he wanted to move, he refused to slash the price of his current home in a down market, was unable to sell it, and got stuck paying two mortgages for a while. When his wife offered to go back to work, he told her not to and kept her in the dark about their financial situation. He even emptied his retirement account to pay for his daughter's wedding (!!).

There are people who are in bad situations through no fault of their own. This guy just wanted to live like a rich person without the income to match. I live in NYC too, and I'm confident I make more money than he ever did, but I would never take on all the expenses he did.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Noodle on April 19, 2016, 06:49:57 PM
I think part of what happened to this family, and probably many others, was considering all these decisions in isolation instead of as part of the big picture. I mean, individually these decisions (other than paying for the wedding with the 401K, and not communicating openly with his wife) are not so bad--I mean, plenty of people choose to have a stay at home parent, or a job with irregular income or private school for the kids, but the author and his wife should have said OR instead of AND.

Along with all the other forces changing middle class financial behavior in the last couple decades, I wonder if having children later in life makes it harder for some people to accumulate assets. Theoretically, of course, you could accumulate like mad in your twenties and early thirties, and then compound interest takes over to work on your retirement funding while you are spending your current income on day care and piano lessons. But I think many people invest whatever assets they have into their kids when they come along (college tuition being the obvious one, or buying a house in the best school district available). Whereas my parents were younger and poorer during the kid phase, but done with paying for college early on...so everything they accumulated in the last 15 years of working, when they were making good salaries, was available to fund their retirement and also a nice life for themselves. (My parents do not believe in subsidizing children past the bachelor's degree, though, outside of some modest gifts for wedding costs.)
Title: Re: The Secret Shame of Middle-Class Americans
Post by: SeaEhm on April 19, 2016, 06:56:24 PM
I think the primary culprit is that we are steeped in mass media which 24x7 projects an aspirational image of "middle-class" that is beyond the means of people who would previously be considered middle-class. So people feel poor if they don't drive new cars, or don't take a fancy vacation every year, or don't have the latest clothing styles, or the latest gadgets.

Yup

People surround themselves with social media.  People only project "coordinated" posts on social media that portray a certain positive image.  Therefore, when you look at your feed of your "friends" you think everyone travels, eats out, gets new cars, etc. all the time.  however, this photo pretty much sums this up.

(http://media1.popsugar-assets.com/files/2014/09/08/967/n/1922507/e22d44998dc04895_thumb_temp_cover_file32304521410210684.xxxlarge/i/Instagram-vs-Reality.jpg)

Plus people could be leveraging themselves up to their eyeballs or they could be saving heavily in one area of their life to spend in another.

I feel bad for today's society growing up especially those who are not 100% secure and confident within themselves. 


Title: Re: The Secret Shame of Middle-Class Americans
Post by: Tjat on April 19, 2016, 07:21:29 PM
To bastardize a quote, "life is a small series choices, the time in between is the consequences"

To me, the author's choices are admittedly poor but rationalized each time in a complainypants fashion.

Title: Re: The Secret Shame of Middle-Class Americans
Post by: SwordGuy on April 19, 2016, 07:59:14 PM
The only thing I feel really sorry about is that the author (a) STILL doesn't get it and, more importantly, is (b) misleading others into thinking they can't get ahead either.

Houses are now HUGELY bigger than they were in my parent's day and have way more features.   If we needed something done to the house we tended to do it, today's middle class tends to hire things out (and thus pay more).

We rarely ate out.   I'm sure we most have gone out to eat sometime as a family, but I honestly can't remember ever doing it unless we were traveling somewhere.

The modern middle class buys new cars that cost more than twice what a perfectly good new car costs.   And they buy one for each parent and each child over 16, too.   My parents bought low mileage used cars and I bought my first car from them (for a fraction of its market value).  It was a hand-me-down that I had to put skin in the game for, instead of a new car I got for being born.

Buy few cars that are less expensive, and smaller houses, and do without premium priced cellphones and data plans, and the average middle class budget would start to look a whole lot better.

Title: Re: The Secret Shame of Middle-Class Americans
Post by: Cassie on April 19, 2016, 08:29:41 PM
So I graduated HS in 1972 and within a few years got married and had a family.  We rented for a few years, my DH worked 2 jobs and we saved for a down payment on an old, crappy house that we could afford the mortgage. WE had 2 old cars and was lucky if one was running.  No eating out, hand me down clothes, only vacations drive to see family, etc.  By this time my parents were doing well but their early years were tougher then ours and managed to do fine as did we.  By age 31 I attend college on $ we saved. Plus we were saving for retirement too.  We took the kids on 1 real vacation for a week to Wash DC. YOu can bet that was a big deal.  People do not want to wait for things-they want all the nice stuff now.  It takes years to obtain them.  My best advice is to hang out with people that are living like you and are not in debt.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: calimom on April 19, 2016, 10:47:12 PM
Is it just me or does anyone else find the willful ignorance of the writer's wife rather curious? They have made financial mistakes on top of financial mistakes: expensive private schools they couldn't afford, the purchase of a house with an unsold coop, penalties on an 401k (for a wedding!), and yet she doesn't do more than go out and stick her head in the expensive sand by the Atlantic Ocean. Even when heating oil is running out and money has to be borrowed from one of the adult daughters. What are they going to do when the transmission drops on the many-miled Avalon?

I get that the author and his wife are super-special very educated people with high expectations. And as a former film executive, she obviously is not going to get a job at the mini mart this late in life - are they in their 50s would you guess? But is there NO job she can get? Working in a non profit? For the state? Substitute teaching? Something that would live up to their educational specialness and keep the wolf that is pounding on the door?

How do women like this justify their behavior?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on April 19, 2016, 11:19:53 PM
Is it just me or does anyone else find the willful ignorance of the writer's wife rather curious? They have made financial mistakes on top of financial mistakes: expensive private schools they couldn't afford, the purchase of a house with an unsold coop, penalties on an 401k (for a wedding!), and yet she doesn't do more than go out and stick her head in the expensive sand by the Atlantic Ocean. Even when heating oil is running out and money has to be borrowed from one of the adult daughters. What are they going to do when the transmission drops on the many-miled Avalon?

I get that the author and his wife are super-special very educated people with high expectations. And as a former film executive, she obviously is not going to get a job at the mini mart this late in life - are they in their 50s would you guess? But is there NO job she can get? Working in a non profit? For the state? Substitute teaching? Something that would live up to their educational specialness and keep the wolf that is pounding on the door?

How do women like this justify their behavior?

With tears, whining, and an appeal to Tradition. The tradition part is historically inaccurate, but you can't expect a super-special very educated person to read history.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: jengod on April 20, 2016, 12:49:46 AM
This is the author's Wikipedia page, FYI:

https://en.wikipedia.org/wiki/Neal_Gabler
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Squirrel away on April 20, 2016, 01:17:29 AM
Wow, that was long.:D

It seems obvious to say, but if you are scraping by like that you are not middle-class.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Ann on April 20, 2016, 02:02:43 AM
Some economists attribute the need for credit and the drive to spend with the “keeping up with the Joneses” syndrome, which is so prevalent in America. I never wanted to keep up with the Joneses. But, like many Americans, I wanted my children to keep up with the Joneses’ children

How.... Is that not the same?

That was a decent piece of schadenfreude.

Also, I don't get why in this age anybody just expects parents to pay for their wedding.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: HenryDavid on April 20, 2016, 07:27:10 AM
"He knew it and did it anyway."

Without THIS, we would have no novels, no King Lear (!), no entertaining thought-provoking self-created tragedies.
Life would be calm, smooth, zen.
On some level, people always DO know it, and do it ANYWAY.
They go home with that person, they postpone that call, they buy that car, they marry that person, they take that job, they let their kids get away with that one thing . . ..
There is a small voice inside saying NOOOOO, but it's surprisingly easy to shut that voice UP.
"Pipe down, voice of reason!"
And then it gets harder to hear it the next time.
People gotta turn off the phone/internet/what have you and settle down by themselves long enough to hear that voice. But they don't.
So they "know it and do it anyway." Very human.

Title: Re: The Secret Shame of Middle-Class Americans
Post by: Eric222 on April 20, 2016, 07:37:18 AM
This article provoked a profound sense of cognitive dissonance for me.  I've been at the "shit, I don't have enough money - what do I do now point," so I understand the sense of self-pity entangled with embarrassment that oozes from the article.  I had a wife that was willfully ignorant of our financial situation and I tried to think about it as little as possible.  I was financially literate - I just couldn't make myself spend the amount necessary to live on what I had.  That being said, it was all a result of choices I had made, then failed to learn from, and continued to make.  I wasn't able to own up to the fact that it was my responsibility until about a year ago. Once I was able to do that, things started improving.  But as long as you are blaming flat wages, being in a HCOL area, university tuition, etc, nothing is going to change. 

Now I see things like this and I want to yell at the writer - IT ISN'T TOO LATE!  He seems so defeated and resigned. You can always turn things around.  Past is prologue, but it isn't absolute destiny. 


Title: Re: The Secret Shame of Middle-Class Americans
Post by: dude on April 20, 2016, 07:58:29 AM
Quote
The Bankrate survey reported that nearly half of college graduates would not cover that car repair or emergency-room visit through savings, and the study by Lusardi, Tufano, and Schneider found that nearly one-quarter of households making $100,000 to $150,000 a year claim not to be able to raise $2,000 in a month.

WTF???
Title: Re: The Secret Shame of Middle-Class Americans
Post by: partgypsy on April 20, 2016, 08:28:55 AM
I'm glad to read this article. Husband and I live in a smallish bungalow (in a nice neighborhood) with 1 used car surrounded by big new houses and each household having 2 new vehicles, with the kids enrolled in multiple expensive activities. So yes sometimes I wonder, how are they DOING it? How can they afford all that? So, maybe for some of them, this is the answer.

While we don't have as much material things our mortgage balance is 65K, have 5K in savings and a net worth around 300K. Not as good as many on this forum, but at least we are solvent. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: golden1 on April 20, 2016, 09:15:09 AM
Quote
"He knew it and did it anyway."

Without THIS, we would have no novels, no King Lear (!), no entertaining thought-provoking self-created tragedies.
Life would be calm, smooth, zen.
On some level, people always DO know it, and do it ANYWAY.
They go home with that person, they postpone that call, they buy that car, they marry that person, they take that job, they let their kids get away with that one thing . . ..
There is a small voice inside saying NOOOOO, but it's surprisingly easy to shut that voice UP.
"Pipe down, voice of reason!"
And then it gets harder to hear it the next time.
People gotta turn off the phone/internet/what have you and settle down by themselves long enough to hear that voice. But they don't.
So they "know it and do it anyway." Very human.

Wise words and very true.  Information is no longer really the problem.  The problem is one of will, self discipline and character.  Or if that isn't really workable in a broad societal level, we need to make systems that encourage us to hear and listen to that voice of reason. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: dude on April 20, 2016, 09:22:22 AM
Bloomberg columnist discusses the article:

http://www.bloombergview.com/articles/2016-04-20/parents-are-bankrupting-themselves-to-look-adequate
Title: Re: The Secret Shame of Middle-Class Americans
Post by: onehair on April 20, 2016, 09:29:40 AM
I just read that article and my jaw is still dropped open.  I confess it has taken me over a year to save nearly $400 but I had done it in the past before I had to take on the debt so no facepunches please???

But the whole article seemed to be complaining and making no plans to either save or invest even small bits to improve his situation.  Given he's a writer and their incomes can be unsteady but still...

Title: Re: The Secret Shame of Middle-Class Americans
Post by: celticmyst08 on April 20, 2016, 11:35:59 AM
Yeah, I mean, I keep hearing people complaining about how hard it is to be "middle class" now, compared to previous generations. But everyone seems to forget that the definition of middle class has changed. Several decades ago, middle class didn't mean you had a huge house, 2-3 cars, kids in private school, yearly vacations, multiple televisions/smartphones/computers/consoles, etc.

There are valid arguments with how ridiculously the cost of education has risen (although that can still be somewhat mitigated by choosing in-state tuition, community college, working through college, etc), but other than that... I just don't feel terribly bad for people who cry about how hard it is to be middle class.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on April 20, 2016, 11:39:15 AM
I'm glad to read this article. Husband and I live in a smallish bungalow (in a nice neighborhood) with 1 used car surrounded by big new houses and each household having 2 new vehicles, with the kids enrolled in multiple expensive activities. So yes sometimes I wonder, how are they DOING it? How can they afford all that? So, maybe for some of them, this is the answer.

While we don't have as much material things our mortgage balance is 65K, have 5K in savings and a net worth around 300K. Not as good as many on this forum, but at least we are solvent.
This is a good point.  While we wouldn't be considered middle class, I have friends who are.  And they make choices like - having one car, living in a "worse" neighborhood (with worse schools, but they go to a public charter school instead).  Their kids aren't in many activities. They don't travel often (usually driving to visit family).  They have SO MUCH FUN on the weekends, with bike rides, parks, beaches.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Giro on April 20, 2016, 11:48:33 AM
I just never understand how possessions are how we determine middle class.  Isn't it income and wealth that should determine middle class.  And I know, everyone thinks they are middle class.

The term is so damn broad and can be defined just about any way possible, we should just throw it out altogether.  Meaningless
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Johnez on April 20, 2016, 11:51:19 AM
The comment section is pretty encouraging, I don't see a ton of people crying over the unfairness of this guy's suffering.

This guy's situation, along with half the country apparently is reason enough to talk about fixing Social Security and/or figuring out how Gen X and Millenials are going to retire. Ya think the shrieks are bad now that the boomers are hitting retirement? Hell, at least Boomers bought houses, us millenials don't even buy houses! Stagnant wages, and growing health care costs are going to decimate this generation upon retirement.

Title: Re: The Secret Shame of Middle-Class Americans
Post by: golden1 on April 20, 2016, 12:23:58 PM
That Bloomberg article is good.  I really think that the Atlantic article tapped into another force for consumerism that I see all the time - spending on your kids.

Quote
On the East Coast, affluent parents of bright children explain that they absolutely must live in the best possible school district, and send their kid to the most prestigious possible college. In “flyover country,” parents explain that they have to have a nice new car for the kids, because safety. Also a bevy of very expensive activities, from travel sports to marching band, because otherwise their lives will be blighted. Auto accidents are declining, and bright, motivated kids are probably going to do OK no matter where they go to school. Yet parents can convince themselves to spend near-infinite amounts seeking marginal improvements.

I see people on the East coast who are paying >50% of their take home pay on their mortgage in order to send their kids to the best public schools.  Lexington, MA, for example,  has a median house price of $838,000.  They are also spending thousands on all the trimmings, fancy activities, sleep away camp, expensive sports or horse riding lessons etc...   It is one thing to say no to your own spending habits, it is another to say no to your kids when all of their friends are going on a class trip, or are in a travel sports league etc....  I'm not sure how to stop the arms race on kid related spending, because the drive to have your kids succeed no matter what the cost is really hard to overcome. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Giro on April 20, 2016, 12:40:37 PM
That Bloomberg article is good.  I really think that the Atlantic article tapped into another force for consumerism that I see all the time - spending on your kids.

Quote
On the East Coast, affluent parents of bright children explain that they absolutely must live in the best possible school district, and send their kid to the most prestigious possible college. In “flyover country,” parents explain that they have to have a nice new car for the kids, because safety. Also a bevy of very expensive activities, from travel sports to marching band, because otherwise their lives will be blighted. Auto accidents are declining, and bright, motivated kids are probably going to do OK no matter where they go to school. Yet parents can convince themselves to spend near-infinite amounts seeking marginal improvements.

I see people on the East coast who are paying >50% of their take home pay on their mortgage in order to send their kids to the best public schools.  Lexington, MA, for example,  has a median house price of $838,000.  They are also spending thousands on all the trimmings, fancy activities, sleep away camp, expensive sports or horse riding lessons etc...   It is one thing to say no to your own spending habits, it is another to say no to your kids when all of their friends are going on a class trip, or are in a travel sports league etc....  I'm not sure how to stop the arms race on kid related spending, because the drive to have your kids succeed no matter what the cost is really hard to overcome.

Yes, it's hard not to want the "best" for your kids.  But, the best is not usually had at a price.  The best is a stable family, time at home to study and be encouraged. family activities together.  You do NOT need 800K house to provide the "best" life for your child.  We live in a shitty district so I do send my kid to private school...but it's 4500 bucks a year.  I saved at least 150k on my house.  I can afford to spend a couple thousand on school for a few years.  Once she has a solid foundation and study habits, she can go to a public high school.  Drowning yourself in debt is not how to provide a good foundation for your child.  IMO

Title: Re: The Secret Shame of Middle-Class Americans
Post by: partgypsy on April 20, 2016, 12:45:38 PM
That Bloomberg article is good.  I really think that the Atlantic article tapped into another force for consumerism that I see all the time - spending on your kids.

Quote
On the East Coast, affluent parents of bright children explain that they absolutely must live in the best possible school district, and send their kid to the most prestigious possible college. In “flyover country,” parents explain that they have to have a nice new car for the kids, because safety. Also a bevy of very expensive activities, from travel sports to marching band, because otherwise their lives will be blighted. Auto accidents are declining, and bright, motivated kids are probably going to do OK no matter where they go to school. Yet parents can convince themselves to spend near-infinite amounts seeking marginal improvements.

I see people on the East coast who are paying >50% of their take home pay on their mortgage in order to send their kids to the best public schools.  Lexington, MA, for example,  has a median house price of $838,000.  They are also spending thousands on all the trimmings, fancy activities, sleep away camp, expensive sports or horse riding lessons etc...   It is one thing to say no to your own spending habits, it is another to say no to your kids when all of their friends are going on a class trip, or are in a travel sports league etc....  I'm not sure how to stop the arms race on kid related spending, because the drive to have your kids succeed no matter what the cost is really hard to overcome.

This is very common where I live as well. Mark of middle-class is: neighborhood (school district) and what activities kids participate in. That was how my mother was when we were growing up. When our household began making more, my mother made sure we got the swimming, ballet, horseback riding lessons and art classes, because those were the things that were most important to her. Can't complain because I enjoyed all those things at the time, and at the time they could afford it.  But it's all about whether you CAN afford it. We've already talked to our oldest that we will help with college but we cannot afford to pay for it all, that if she wants a car she can save up for it, etc. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Fishindude on April 20, 2016, 12:55:59 PM
The term "middle class" is BS.   Ask just about anyone you know and I'd venture that they will tell you they are "middle class", and that anyone with 30% less income is low income, and anyone with 30% more is the upper class.

I see people at relatively low income levels doing quite well via frugal living and people at very high income levels living hand to mouth due to over spending.
Frankly, I'd rather associate with the low income folks that have their sh!t together.


Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on April 20, 2016, 01:01:20 PM
Yeah, I mean, I keep hearing people complaining about how hard it is to be "middle class" now, compared to previous generations. But everyone seems to forget that the definition of middle class has changed. Several decades ago, middle class didn't mean you had a huge house, 2-3 cars, kids in private school, yearly vacations, multiple televisions/smartphones/computers/consoles, etc.

There are valid arguments with how ridiculously the cost of education has risen (although that can still be somewhat mitigated by choosing in-state tuition, community college, working through college, etc), but other than that... I just don't feel terribly bad for people who cry about how hard it is to be middle class.

One point you've made is worthy of extra discussion. You listed a bunch of luxuries, but you didn't use the word "and" or "or". The distinction is worth making.

A whole bunch of people who identify themselves as middle class make "and"-ish assumptions about consumptions. They don't limit themselves to just one or two indulgences, and make cutbacks and compromises elsewhere. They feel inadequate if they aren't indulging in several different and unrelated luxuries, and the idea of trading one off for another is unknown. This is a very new development.

Middle class, going back to when P.T. Barnum popularized the phrase in the early to mid-1800's, meant a very special thing. It referred to a family that was not financially independent and that had to have one or more breadwinner exchanging labor or services for pay, but that had both an income surplus and a time surplus. Middle-class people were sometimes small business owners or entrepreneurs, but sometimes worked for others by providing knowledge work or skilled labor. They did not necessarily own the means of economic production (and the distinction wasn't relevant to class until Marx and Engels emphasized it).

Compared to working-class families, middle-class families had more income than they needed to get by. The income surplus had to be big enough to allow the family to pay its expenses reliably, to save for emergencies, to cover the expenses associated with caring for young, old, or injured members of the family, to acquire movable property and possibly even real estate, and perhaps even to invest.

Compared to working-class families, middle-class families did not have to devote all their waking hours to earning a survival wage. The time surplus meant that the adults in the family did not spend every waking hour focused on their own survival or on caregiving for children or elders, and had time and resources available for recreation. Division of labor, for example, with women staying at home and investing their labor in the education of the next generation instead of working outside the home to earn income, was one luxury that became possible for at least some middle-class families. A middle-class family could therefore accrue, and potentially consume, more than a working-class family. These options were still unavailable to the laboring class, and would not necessarily have been legal under some of the really old-fashioned feudal legal systems that had (and enforced) consumption limits based on social class.

Distinctions existed between middle-class and upper-class families. In the upper class, a certain degree of financial independence was considered mandatory. However (and I'm using Edith Wharton for an example since her fiction was commended for its realism) there wasn't a minimum consumption level for the upper class. In "The House of Mirth", set in New York in the early 1900's, there were characters who belonged to the upper class who had only enough income from their investments to afford to rent a room in someone else's house. This-- and marrying someone else who had money-- was considered preferable to getting a job, and far more respectable. On the other side of the pond, Lord Byron and most of his social set were known for living in rented attic space when the literary income was sparse, rather than answering a help-wanted ad. Scaling one's consumption to suit income was in fact normal for all classes. It wasn't that unusual to see a lawyer whose income came solely from labor (as in, a member of the middle class) enjoying a higher standard of living and more financial stability than a member of an old-money family whose inherited wealth produced a much smaller income.

So, a person might see a middle-class family buying a house or sending their children to university, but not both at the same time. In fact, the family often had to choose which child got the education opportunity. Also, when a middle-class or conservative upper-class family spent money on something, they generally expected to have something to show for it. Conspicuous consumption in one area often required cutbacks in another, and only the extremely wealthy were expected to spend freely and not worry about the cost.

TL;DR version... as a society, we've got large numbers of people who could be financially stable choosing to overspend and overconsume. In fact it's become the norm. Part of the problem is that it's no longer customary to consider an overindulgence in one area as something that requires compensation in another area.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: onehair on April 20, 2016, 01:03:30 PM
My sister is a writer.  Granted she still lives at home and banks most of her checks received from stories and essays of hers that sell. We joke she is cheap but I know if she had to she could take care of herself.   She was working but quit to do her novel.  As my mom also writes mainly poetry in her retirement and this is a good working arrangement for her my mom and stepfather I have nothing to squawk about.  And why would I? I'd rather take care of my own business.

That guy however was living way way above his means.

Title: Re: The Secret Shame of Middle-Class Americans
Post by: CNM on April 20, 2016, 01:06:51 PM
This article sparked a lot of interesting conversation at my house.  While I agree that, in many industries, wages and benefits are lower than they were in the 70s.  But that does not absolve the author of his financial woes.  He and his wife made some major flubs along the way, and seem to continue making them.  His inability to raise $400 can't really be blamed on some nebulous economic forces; it is a direct result of living beyond his means. 

I seriously can't get over that he told his wife he could provide for the family.  That was a HUGE lie!  And she continues to be out of the work force ... why exactly?  I am sure she could earn some money, even part time or a solo-gig.  And liquidating a 401(k) FOR A WEDDING?!?! That is crazy!! 

I got a distinct feeling that the author felt he was entitled to more, because he was/is A Very Important Writer Who Was Even on TV. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: celticmyst08 on April 20, 2016, 01:15:05 PM
Yeah, I mean, I keep hearing people complaining about how hard it is to be "middle class" now, compared to previous generations. But everyone seems to forget that the definition of middle class has changed. Several decades ago, middle class didn't mean you had a huge house, 2-3 cars, kids in private school, yearly vacations, multiple televisions/smartphones/computers/consoles, etc.

There are valid arguments with how ridiculously the cost of education has risen (although that can still be somewhat mitigated by choosing in-state tuition, community college, working through college, etc), but other than that... I just don't feel terribly bad for people who cry about how hard it is to be middle class.

One point you've made is worthy of extra discussion. You listed a bunch of luxuries, but you didn't use the word "and" or "or". The distinction is worth making.

A whole bunch of people who identify themselves as middle class make "and"-ish assumptions about consumptions. They don't limit themselves to just one or two indulgences, and make cutbacks and compromises elsewhere. They feel inadequate if they aren't indulging in several different and unrelated luxuries, and the idea of trading one off for another is unknown. This is a very new development.

Very good point; that was the idea I had in my head, but I neglected to make that distinction. Great write up.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on April 20, 2016, 02:06:42 PM
His inability to raise $400 can't really be blamed on some nebulous economic forces; it is a direct result of living beyond his means. 

Living beyond his means was also clearly a choice for this particular individual because of his education, skills, brainpower, basic good health, and access to information. Everyone makes mistakes, but generally they learn from them instead of digging themselves in deeper.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: druth on April 20, 2016, 02:12:52 PM
What I was most bothered by (though there is a lot to be bothered by here) was "A family in the middle quintile, with an average income of roughly $50,000, could continue its spending for … six days"

Blows my mind.  Sure I have lots of broke friends, but I'm 26.  This is talking about 2 earner households with kids.  How irresponsible is it to be aware that if you lost your job you could last for less than a week before you couldn't buy food for your kids anymore.  This is saying that this is even after liquidating things like your 401k, so presumably your savings are just so non-existent or so outweighed by credit card debt that it's irrelevant.  I can understand people in poverty that can't put together savings, but if you are in the middle I don't see how there is an excuse.

Again.  I'm 26 and I could last TWO YEARS(longer than I have been out of college) if I lost my job.  I admit I'm a little higher than the middle quintile, but Jesus.

*breathes* /end rant

Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on April 20, 2016, 02:17:03 PM
His inability to raise $400 can't really be blamed on some nebulous economic forces; it is a direct result of living beyond his means. 

Living beyond his means was also clearly a choice for this particular individual because of his education, skills, brainpower, basic good health, and access to information. Everyone makes mistakes, but generally they learn from them instead of digging themselves in deeper.

That's the vibe I got as well. I mean I have sympathy for the kid from a super low income neighborhood who ends up with $200,000 student loan debt. But this guy? Eh.

Plus the fact that he's still making mistakes. I mean the kids are grown, yet he had to ask for money to pay the heat?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: iris lily on April 20, 2016, 02:45:17 PM
Nice summary, Grim Squeaker.

William Makepeace Thackaray highlighted some Victorian habits of people and their money in his great novel Vanity Fair where class and birth and finances didnt all line up. There were broke peole who were shrewed with money, rich peole who were stupid with money as well as ones wh,were good with it, and people who lived on credit. The latter situation was especially intersting.

The author of the article reminds me of several characters in Vanity Fair.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Posthumane on April 20, 2016, 02:49:03 PM
I agree with what TheGrimSqueaker wrote and have on occasion said many of the same things myself. It's a reflection of the famous quote "You have have anything you want, you just can't have everything you want." If you want to have an expensive hobby (like I do) then go ahead and have an expensive hobby - but realize that means you won't be able to have as nice a vehicle or as big of a house, or won't be able to travel as much. You have to pick which if those is most important to you.

People complain that the "american dream" is impossible to achieve these days, but that's only because they've redefined the american dream. It used to be a modest house with one bathroom, a car for the family to get around in, occasionally going out to a restaurant for a special occasion, and an annual camping/fishing/hunting trip with some friends. Now it's a big screen TV in every room, a large truck/suv for each driver in the house, two week resort vacations at least once a year, eating out several times per week, etc.

One thing that stuck out at me about this article, though it's been mentioned a number of times elsewhere, is blaming the stangnation of real household income over the years. Why is a growth in real income important or expected? I understand that nominal income should at least grown with inflation, more or less, in order to maintain purchasing power, but it seems that many people are saying that growth in real income (i.e. inflation adjusted income) is necessary for success and they attribute that lack of growth to their failure. In my mind, if a person is continuing to do the same job as they were in the past, they should expect to get paid the same as they have in the past, no? I understand that median real income is lower now than it was during its peak in the mid 70's (depending on which data you use), but that period was a bit of an anomaly. It's still higher now than it was throughout the 80's and most of the 90's, and probably compared to the 60's as well.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: NESailor on April 20, 2016, 02:50:43 PM
What I was most bothered by (though there is a lot to be bothered by here) was "A family in the middle quintile, with an average income of roughly $50,000, could continue its spending for … six days"

Blows my mind.  Sure I have lots of broke friends, but I'm 26.  This is talking about 2 earner households with kids.  How irresponsible is it to be aware that if you lost your job you could last for less than a week before you couldn't buy food for your kids anymore.  This is saying that this is even after liquidating things like your 401k, so presumably your savings are just so non-existent or so outweighed by credit card debt that it's irrelevant.  I can understand people in poverty that can't put together savings, but if you are in the middle I don't see how there is an excuse.

Again.  I'm 26 and I could last TWO YEARS(longer than I have been out of college) if I lost my job.  I admit I'm a little higher than the middle quintile, but Jesus.

*breathes* /end rant

I hear you on this one.  Damn.  I have 1 kid (another on the way) and this huge for me.   My wife and I have friends who have similar families and even incomes and we are baffled at their cash burn rates.  There really cannot be ANYTHING left for savings in their budget.  I can't imagine living comfortably knowing that an accident could put me and my kids out on the street.  Unless of course I didn't know that...being that most people are completely financially illiterate.  That's the only explanation.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 20, 2016, 02:50:58 PM
What a mess of one bad financial decision after another because he couldn't simply say "no" to things he knew couldn't afford or would put him in a financial position that would cause me to lose sleep at night.  This guy could have been "rich" in retirement had he simply said "no" when important financial decisions were made.  Instead, he won't even be middle class.  he will be poor unless he hits a grand slam with his writing. 

That said, I'm not sure that MMM derision will really change anything - for him or others in the United States. The MMMers are a very small portion of the population apparently.  It seems to me that human nature will cause these types of problems over and over again if we don't alter the United State's financial system to require more savings for retirement and, at the same time, better provide for life's necessities like a solid public K-12 education, affordable housing in areas free of crime, lower costs for health care, child care and higher education. 

I'm really getting the feeling that there are many Americans just waking up to the fact - because they have no savings - that they are not middle class but instead working poor despite having significant material possessions and kids with diplomas from private schools.  I suspect that this financial awakening is what is driving voters to support both Trump and Sanders.  It's likely to get much worse before it gets better unless we change the system.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Jack on April 20, 2016, 03:16:28 PM
That said, I'm not sure that MMM derision will really change anything - for him or others in the United States. The MMMers are a very small portion of the population apparently.  It seems to me that human nature will cause these types of problems over and over again if we don't alter the United State's financial system to require more savings for retirement and, at the same time, better provide for life's necessities like a solid public K-12 education, affordable housing in areas free of crime, lower costs for health care, child care and higher education. 

I'm really getting the feeling that there are many Americans just waking up to the fact - because they have no savings - that they are not middle class but instead working poor despite having significant material possessions and kids with diplomas from private schools.  I suspect that this financial awakening is what is driving voters to support both Trump and Sanders.  It's likely to get much worse before it gets better unless we change the system.

Exactly. We can blame human nature and poor microeconomic decision-making all we want, but that doesn't change the fact that the macroeconomic situation is unsustainable and will have to be resolved one way or another.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on April 20, 2016, 03:26:25 PM
  I'm really getting the feeling that there are many Americans just waking up to the fact - because they have no savings - that they are not middle class but instead working poor despite having significant material possessions and kids with diplomas from private schools. I suspect that this financial awakening is what is driving voters to support both Trump and Sanders.  It's likely to get much worse before it gets better unless we change the system.

Two sides of the same coin.

The strongest Trump supporter is a non-college educated male. As American manufacturing has been outsourced or delegated to robots, this group has effectively been left out of today's economy.

The strongest Sanders supporter is a college educated 20something. They borrowed and borrowed for the degree that they were told would get them a solid middle if not upper-middle class lifestyle. With loan payments, even on a decent income, they feel like they got a raw deal.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: StarBright on April 20, 2016, 03:27:18 PM

This is a very good point.  I can't remember which book it was "The Way We Never Were", or "The Two Income Trap" or ???

Anyway, a book I read at some point talked about how it requires 2 incomes to be middle class now.  In some ways, we spend more - housing is more expensive, particularly if you want a decent school district.  Entertainment is cheaper, and cars are a much better deal.  Cars didn't used to survive past 100,000 miles, for example.

This- Two income trap. We are living almost exactly like my parents did at the same age: same size house (1100 sqf), same two kids, etc. but we do it on two jobs wheres I had a dad that worked and a stay at home mom.

We've run the numbers and we could get by with one us staying home but our standard of living would drop significantly (as would our ability to save). Sure - cars and TVs are cheaper but health insurance is insane.

We are incredibly frugal and savers and we had three years in a row with medical emergencies - we hit our OUT OF POCKET max two years in a row. Another year would have taken us perilously close to draining our non retirement "emergency" savings. Then our 12 year old fridge died, then our water heater leaked, then our cat got sick, then an ice storm put a tree through roof, now our 14 year old car is on it's last legs. It was a rough three years.

We are people that are not making "bad" choices and we feel impoverished all of the time. Because of our good habits I know that we'll be fine but I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: opnfld on April 20, 2016, 05:11:35 PM
I'm really getting the feeling that there are many Americans just waking up to the fact - because they have no savings - that they are not middle class but instead working poor despite having significant material possessions and kids with diplomas from private schools.  I suspect that this financial awakening is what is driving voters to support both Trump and Sanders.  It's likely to get much worse before it gets better unless we change the system.

Exactly. We can blame human nature and poor microeconomic decision-making all we want, but that doesn't change the fact that the macroeconomic situation is unsustainable and will have to be resolved one way or another.

Yes, I think you are right.  Rather than absolving himself and his decisions, this is the point the author is trying to make by illustrating his particular circumstances.  For a variety of reasons, half of the US population is making very bad financial decisions and that will have societal ramifications.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: opnfld on April 20, 2016, 05:14:50 PM
William Makepeace Thackaray highlighted some Victorian habits of people and their money in his great novel Vanity Fair where class and birth and finances didnt all line up. There were broke peole who were shrewed with money, rich peole who were stupid with money as well as ones wh,were good with it, and people who lived on credit. The latter situation was especially intersting.

The author of the article reminds me of several characters in Vanity Fair.
Sounds good.  Thanks for the recommendation.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on April 20, 2016, 05:15:51 PM
Sure - cars and TVs are cheaper but health insurance is insane.

I teach my daughter to divide things into needs, wants, and nice-to-haves.

Since the 1970s, nice-to-haves such as cars, TVs, electronic doodads, instant food, and real-time long distance communication are far cheaper per unit than they were before, however the maximum amount people can spend on them has exploded. People will always find a way to spend a shocking amount of money on entertainment or conspicuous consumption like gigantic televisions or extra living space. A household's average fraction of spending on such items probably hasn't shifted much; people just get more bang for their buck.

Most needs, however, are far more expensive. Medical care, shelter, child care, and education sufficient to get legally marketable skills have more than doubled in price even taking inflation into account. Some other "need" items, such as high quality food, are actually harder to get for the average person because of a decline in cooking skills and the fact that all of the processed instant junk crowds it out of the marketplace.

The "wants", however, are kind of in the middle. These are the things people consider decencies, or in some cases the minimum necessary consumption for a person in their situation. I'd say that, overall, the price per unit has dropped but people's consumption rate has increased to more than compensate. Most clothing, for example, falls into this category.

The Consumer Price Index is deceptive because it doesn't differentiate between necessities and luxuries.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on April 20, 2016, 05:23:45 PM
Nice summary, Grim Squeaker.

William Makepeace Thackaray highlighted some Victorian habits of people and their money in his great novel Vanity Fair where class and birth and finances didnt all line up. There were broke peole who were shrewed with money, rich peole who were stupid with money as well as ones wh,were good with it, and people who lived on credit. The latter situation was especially intersting.

The author of the article reminds me of several characters in Vanity Fair.

I love that book. Another good one for Victorian money habits is Middlemarch.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: JLee on April 20, 2016, 05:28:21 PM
I think the primary culprit is that we are steeped in mass media which 24x7 projects an aspirational image of "middle-class" that is beyond the means of people who would previously be considered middle-class. So people feel poor if they don't drive new cars, or don't take a fancy vacation every year, or don't have the latest clothing styles, or the latest gadgets.

Yup

People surround themselves with social media.  People only project "coordinated" posts on social media that portray a certain positive image.  Therefore, when you look at your feed of your "friends" you think everyone travels, eats out, gets new cars, etc. all the time.  however, this photo pretty much sums this up.

(http://media1.popsugar-assets.com/files/2014/09/08/967/n/1922507/e22d44998dc04895_thumb_temp_cover_file32304521410210684.xxxlarge/i/Instagram-vs-Reality.jpg)

Plus people could be leveraging themselves up to their eyeballs or they could be saving heavily in one area of their life to spend in another.

I feel bad for today's society growing up especially those who are not 100% secure and confident within themselves.

Haha, that made me wonder how much of a "successful consumerist lifestyle" projection I could present on social media with careful structuring of pictures. :P
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Making Cookies on April 21, 2016, 09:13:18 AM
The economist quoted pretty much summed it all up, despite missing his own point:

"According to Johnson, economists have long theorized that people smooth their consumption over their lifetime, offsetting bad years with good ones—borrowing in the bad, saving in the good. But recent research indicates that when people get some money—a bonus, a tax refund, a small inheritance—they are, in fact, more likely to spend it than to save it. “It could be,” Johnson says, “that people don’t have the money” to save. "

People spend money they don't have, and then say "I don't have money to save." Yeah, no kidding...you spent it all on discretionary goods.

I can almost guarantee if you ask any 20 or 30 something on the street if they have money to save and they say no, that they also have an iPhone.

Not necessarily. At one point early in our marriage each "windfall" (tax refund, cash gift) seemed to be spent on a set of tires for the family hauler (which is still many years later the family hauler) or an appliance replacement/repair or knocking the debt down.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: rob in cal on April 21, 2016, 10:26:31 AM
   Wondering about the details about the wedding and how much money they took from the 401k to fund it.  Also, did the wedding couple know that they were doing this for them?  Also, how did the conversation go about the grandparents funding the grandkids college.  How much did it impact their finances?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 21, 2016, 10:39:26 AM
Yes, it's hard not to want the "best" for your kids.  But, the best is not usually had at a price.  The best is a stable family, time at home to study and be encouraged. family activities together.  You do NOT need 800K house to provide the "best" life for your child.  We live in a shitty district so I do send my kid to private school...but it's 4500 bucks a year.  I saved at least 150k on my house.  I can afford to spend a couple thousand on school for a few years.  Once she has a solid foundation and study habits, she can go to a public high school.  Drowning yourself in debt is not how to provide a good foundation for your child.  IMO

THIS^^^

Always providing "The Best" of everything is bad for kids. It creates impossible expectations, turns them into narcissists, and limits their adaptability. I want my kids to struggle a bit with the less-than-ideal, which forces them to be resourceful. Other kids aren't being kind or cooperating on the playground? Unless you're in some kind of real actual danger, don't come crying to me, work it out or brush it off and do something else. The key, I think, is to figure out how much you can stretch your kids without overwhelming them, which should increase as they mature and gain experience.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: CNM on April 21, 2016, 10:52:03 AM
... I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

I agree with you.  I attribute that to the elimination of pensions and life-long health care in most industries and erosion of safety nets in general. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: infogoon on April 21, 2016, 11:02:40 AM
... I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

I agree with you.  I attribute that to the elimination of pensions and life-long health care in most industries and erosion of safety nets in general.

Agreed. I live the same lifestyle as my parents at my age -- used cars, modest house, wife is a SAHM -- despite the fact that I make significantly more money. Dad's job came with excellent lifetime medical coverage and a full pension he started collecting when he retired in his mid-50s. I've got to foot the bill for all of that myself.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: NESailor on April 21, 2016, 11:07:52 AM
... I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

I agree with you.  I attribute that to the elimination of pensions and life-long health care in most industries and erosion of safety nets in general.

Agreed. I live the same lifestyle as my parents at my age -- used cars, modest house, wife is a SAHM -- despite the fact that I make significantly more money. Dad's job came with excellent lifetime medical coverage and a full pension he started collecting when he retired in his mid-50s. I've got to foot the bill for all of that myself.

So what you are saying is that you are not doing better...but you are also not doing worse. Same lifestyle, more money, fewer benies so you put the extra money to create a safety net for yourself.  Net result is the same, right?  Supports the notion that life is NOT harder today than it was 50 years ago.  People just happen to expect much more for the same amount of effort and end up getting in trouble via overconsumption and misusing credit.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ShoulderThingThatGoesUp on April 21, 2016, 11:14:19 AM
... I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

I agree with you.  I attribute that to the elimination of pensions and life-long health care in most industries and erosion of safety nets in general.

Agreed. I live the same lifestyle as my parents at my age -- used cars, modest house, wife is a SAHM -- despite the fact that I make significantly more money. Dad's job came with excellent lifetime medical coverage and a full pension he started collecting when he retired in his mid-50s. I've got to foot the bill for all of that myself.

So what you are saying is that you are not doing better...but you are also not doing worse. Same lifestyle, more money, fewer benies so you put the extra money to create a safety net for yourself.  Net result is the same, right?  Supports the notion that life is NOT harder today than it was 50 years ago.  People just happen to expect much more for the same amount of effort and end up getting in trouble via overconsumption and misusing credit.

And, the first world is simply a better place to live in today than in the 1970s or 1950s. People are healthier, have much more access to information and entertainment, and we're safer as well.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: StarBright on April 21, 2016, 11:20:25 AM
... I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

I agree with you.  I attribute that to the elimination of pensions and life-long health care in most industries and erosion of safety nets in general.

Agreed. I live the same lifestyle as my parents at my age -- used cars, modest house, wife is a SAHM -- despite the fact that I make significantly more money. Dad's job came with excellent lifetime medical coverage and a full pension he started collecting when he retired in his mid-50s. I've got to foot the bill for all of that myself.

So what you are saying is that you are not doing better...but you are also not doing worse. Same lifestyle, more money, fewer benies so you put the extra money to create a safety net for yourself.  Net result is the same, right?  Supports the notion that life is NOT harder today than it was 50 years ago.  People just happen to expect much more for the same amount of effort and end up getting in trouble via overconsumption and misusing credit.

If my husband and I are doing twice the "work" for the same amount of comfort I'd say that we are worse off. On top of that, my father had a 40 hour a week job, with a few busy weeks a year. Hubs and I are both working 50 hours a week regularly with many weeks requiring more.

Yes childcare is outsourced 7 hours a day but cooking and cleaning and life management are still handled by us (which would have been handled by my stay at home mother).
 
It's definitely more effort than my parents were putting in at the same age.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: MrMoogle on April 21, 2016, 11:42:13 AM
... I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

I agree with you.  I attribute that to the elimination of pensions and life-long health care in most industries and erosion of safety nets in general.

The argument against this is seeing all the pensions that aren't delivering on what their companies promised now.  They weren't funded properly, so it was never a stable solution, and now that we know how much funding is required, no company is willing to spend it.  The workers gave up responsibility to their company, who wasn't responsible enough to make it work. 

I don't have a society level solution though.  Personally MMM, but most people don't/won't choose that.

Both Dems and Repubs see certain realities, but ignore the realities that the other side sees.  As a conservative, the more I think about this, the more I like SSI the way it is.  It basically says, "Be responsible, if you're not, society will give you just enough money not to starve."  A threat and a safety net, but not a big enough of one to reward irresponsibility.  Only if someone would word it that way so everyone was aware of what is being promised.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: infogoon on April 21, 2016, 11:45:06 AM
Agreed. I live the same lifestyle as my parents at my age -- used cars, modest house, wife is a SAHM -- despite the fact that I make significantly more money. Dad's job came with excellent lifetime medical coverage and a full pension he started collecting when he retired in his mid-50s. I've got to foot the bill for all of that myself.

So what you are saying is that you are not doing better...but you are also not doing worse. Same lifestyle, more money, fewer benies so you put the extra money to create a safety net for yourself.  Net result is the same, right?  Supports the notion that life is NOT harder today than it was 50 years ago.  People just happen to expect much more for the same amount of effort and end up getting in trouble via overconsumption and misusing credit.

Another consideration is that I have three college degrees, including a graduate degree, while my father was able to support his family with a high school diploma. Fortunately, I was able to do that with minimal debt; but for the majority of people who have no or only some college, it's hard to keep up.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: NESailor on April 21, 2016, 12:22:07 PM
Agreed. I live the same lifestyle as my parents at my age -- used cars, modest house, wife is a SAHM -- despite the fact that I make significantly more money. Dad's job came with excellent lifetime medical coverage and a full pension he started collecting when he retired in his mid-50s. I've got to foot the bill for all of that myself.

So what you are saying is that you are not doing better...but you are also not doing worse. Same lifestyle, more money, fewer benies so you put the extra money to create a safety net for yourself.  Net result is the same, right?  Supports the notion that life is NOT harder today than it was 50 years ago.  People just happen to expect much more for the same amount of effort and end up getting in trouble via overconsumption and misusing credit.

Another consideration is that I have three college degrees, including a graduate degree, while my father was able to support his family with a high school diploma. Fortunately, I was able to do that with minimal debt; but for the majority of people who have no or only some college, it's hard to keep up.

Once again I'm not convinced.  I realize I may be coming across as some conservative (BOOTSTRAPS!) guy but I'm anything but.  Are you certain that you consume the same amount as your parents?  You may think it's a "similar" lifestyle but if your used cars are a class above that your parents had (and you have 2, vs. their 1) and you have multiple TVs, cable, and a cellphone for you and each of your two kids - you are simply NOT leading the same lifestyle as your parents. 

I'm making lots of assumptions, I know, but I want to make sure we are comparing apples to apples here.  I could say that I'm leading a lifestyle similar to my parents in that I have used compact cars a small house and a no frills yard with no landscaping.  But that would ignore the fact that I have 2 cars that are far superior to their 1 car they had.  My small 1500 sq foot house is a whopping 50% larger than their 1000 sq. ft house.  I have only 1 TV but it's a 49inch 4K TV and even without cable I have 100x more programing available (Internet + Netflix).  My wife and I both have cellphones and my yard is 10 times the size of my parents' yard when I was a kid.  Small differences add up to 5-10K of consumption annually which is not insignificant when you compare consuming at a 30K level vs. a 40K level (33% increase!).

Regarding education - as much as I'm a fan it's still a form of consumption.  If you choose to get multiple degrees that you know (or should know) will not result in significant increase in earnings potential that's on you - not life being more difficult.  I only have BS in Accounting on scholarships, and part time work (state school + being an RA for reduced housing) and that investment had a STELLAR ROI.  My sister had to get a BA and an MS (psychology) and she still earns significantly less than I do when you adjust for COL.  I also know a whole lot of HS Diploma guys who outearn me when you account for the opportunity cost of my B.S.

Basically, what this keeps leading me back to is that we consume ourselves into trouble.  Many of us on this page are living quite well on 30K/year for a family of 3-4 people and that's quite a bit less than the median household income.  I just can't understand why I keep hearing about how tough life is compared to what it used to be.  If we all lived a life "the way it used to be" I think our balance sheets would look much healthier.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sdeeze on April 21, 2016, 12:29:26 PM
So the Atlantic is doing a feature where they have "leading scholars of the American middle class" read the feature story and react to it. Kind of a cheesy premise but they seem to know more about the situation than the author did. Whether you agree with his or her point of view is another matter.

http://www.theatlantic.com/notes/all/2016/04/what-factors-are-driving-american-financial-insecurity/478575/ (http://www.theatlantic.com/notes/all/2016/04/what-factors-are-driving-american-financial-insecurity/478575/)

Some are pretty interesting. To wit on the earning patterns of the last 40 years:

"The ultimate culprit is wage stagnation, occurring now for over 40 years (average real wages peaked in 1973). This translates into income stagnation. For a while (until about 1990 or so) families compensated for stagnant wages by the increased participation of wives in the labor force. Once this opportunity was exhausted real incomes also stagnated. Indeed, according to Census data, median family income in 2013 was less than it was in 1997."

I agree with most people here on a basic level that even moderate MMM reforms in a person's life would alleviate almost all of this, but it's interesting to look at the structural causes of when/why these things come to a head.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Tyson on April 21, 2016, 12:37:40 PM
What's' clear to me from the article is that the author needs a complete mental reset.  A paradigm shift, to borrow from Khun.  Until that happens, he'll just keep making different variations of the same mistakes over and over again (as he is still doing).  I know, because I used to be like that.  It took long term unemployment and finding MMM to make that shift for me.  I feel lucky.  And I feel sorry for this guy and his family.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: infogoon on April 21, 2016, 12:44:19 PM
Once again I'm not convinced.  I realize I may be coming across as some conservative (BOOTSTRAPS!) guy but I'm anything but.  Are you certain that you consume the same amount as your parents?  You may think it's a "similar" lifestyle but if your used cars are a class above that your parents had (and you have 2, vs. their 1) and you have multiple TVs, cable, and a cellphone for you and each of your two kids - you are simply NOT leading the same lifestyle as your parents. 

I'm not sure what you think I'm trying to convince you of, I don't believe I said anything about how things are getting harder for the middle class. That said, my parents drove a Ford Granada and an AMC Hornet when I was a kid. My cars are a class above by default. I don't think I could buy something that shitty now if I tried.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Cassie on April 21, 2016, 12:52:29 PM
What I really found disturbing is that he convinced his parents to pay for his daughter. No way would I let my kids do that to me or no way I would have ever asked my parents.  I hope they have $ in their old age.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: doggyfizzle on April 21, 2016, 01:26:24 PM
I'm not sure how to stop the arms race on kid related spending, because the drive to have your kids succeed no matter what the cost is really hard to overcome.

Just make a conscious decision to not participate and teach your kid perspective.  People need to accept that most likely their kid(s) are going to be average, and there is nothing wrong with that at all.  I've got a two-month old, and I have no hopes or dreams for him curing cancer or becoming president, but I'd be thrilled for him become an electrician or accountant and be able to lead a life anywhere in the US (or elsewhere) he wants to one day.  Maybe he'll be a college athlete like his parents, maybe not.  Will my wife and I do as much as possible to foster creativity?  Certainly!, but not with the expectation that if he doesn't take to athletics or early computer programming classes he will be doomed to poverty.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on April 21, 2016, 01:39:54 PM

This is a very good point.  I can't remember which book it was "The Way We Never Were", or "The Two Income Trap" or ???

Anyway, a book I read at some point talked about how it requires 2 incomes to be middle class now.  In some ways, we spend more - housing is more expensive, particularly if you want a decent school district.  Entertainment is cheaper, and cars are a much better deal.  Cars didn't used to survive past 100,000 miles, for example.

This- Two income trap. We are living almost exactly like my parents did at the same age: same size house (1100 sqf), same two kids, etc. but we do it on two jobs wheres I had a dad that worked and a stay at home mom.

We've run the numbers and we could get by with one us staying home but our standard of living would drop significantly (as would our ability to save). Sure - cars and TVs are cheaper but health insurance is insane.

We are incredibly frugal and savers and we had three years in a row with medical emergencies - we hit our OUT OF POCKET max two years in a row. Another year would have taken us perilously close to draining our non retirement "emergency" savings. Then our 12 year old fridge died, then our water heater leaked, then our cat got sick, then an ice storm put a tree through roof, now our 14 year old car is on it's last legs. It was a rough three years.

We are people that are not making "bad" choices and we feel impoverished all of the time. Because of our good habits I know that we'll be fine but I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.
There are some really good points in here too.  As a member of the lower class growing up (poor, rural family), it was expected to do with less, and to do it yourself.  Very mustachian.  Started as necessity but was a matter of pride.

So, for example.  My father was an auto mechanic and fixed our cars.  And those of relatives.  We did our own house repairs, like painting the house (and of course all of the other things that are outsourced these days, like yard work, growing food, canning, etc.)  You found ways around problems because you had to - like our windows were drafty, so we thumb-tacked plastic over them every winter to bring down heating costs.  Our shower didn't work, so we took baths.  Dad tried to fix the shower, created a gas leak, and my sister passed out.  (Then we got a pro to come in.)  Our appliances were old, but they didn't break as often.

My brother in law fixes most things at home himself, and he helps other people with stuff like new windows, new siding, etc.

So these days, I think a lot of people that I know aren't savvy on how to fix things, or don't want to, or don't have the time.  That can come to bite them.  I've got neighbors and friends who have had problems with leaky roofs, blocked sewer lines (we have one of those too!), etc.  The guy with a SAHM doesn't have much money, so he does it all himself out of necessity (especially when the sewer repair was quoted at $17k).  Some of the other neighbors moan about not being able to pay to replace the roof, but they spend thousands every year on vacations and entertainment.

I've gotten questions like:
"How did you pay for your roof?"  With a check.
"What are you going to do about the sewer main?" Pay for someone to replace it.

Now, we are lucky, I suppose, that we are frugal enough and high income enough to be able to weather it.  But part of it is just growing up and knowing that things are going to break.  Am I happy about the $4500 tax bill followed by the $8500 sewer bill?  No.  Ouch.  But we have the money.

And part of it is time too - the families with 2 working parents are crunched for time - so it's a lot harder to replace your own roof when you've got three kids and a wife who works full time.  You pick your battles.

Title: Re: The Secret Shame of Middle-Class Americans
Post by: Giro on April 21, 2016, 01:58:12 PM
As a kid, we had no air cond, no cable, one car, and only one guaranteed meal a day.  We had a giant garden and had to can food for the winter.  I never wore a new piece of clothing until I was 17 and then only because my boyfriend bought me a sweater for Christmas.  I never went to the dentist until I was 21 years old.  (not a single cavity either, because I never ate sugar).  No restaurants (not even McDonalds), no vacations, and my mom didn't sit down with me and help with my homework.  I'm pretty sure we were poor, but to say life is worse....HAHAHAHA. 

Even the very poor families today have all of those amenities. 
Title: The Secret Shame of Middle-Class Americans
Post by: pbkmaine on April 21, 2016, 01:59:55 PM
My mother grew up in a row house in West Philadelphia that her father bought for $1200 in 1915. I grew up in the same house. 3 bedrooms, 1 bath, maybe 1000sf. After my mother's death in 1986, it sold for $30,000.  My parents had an antenna TV and a rotary dial phone. Aside from TV, their main entertainment was books from the library. They did not belong to a gym - they went for a walk. My own life, though modest compared with some of my peers, is orders of magnitude more luxurious.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: doggyfizzle on April 21, 2016, 02:16:29 PM
... I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

I agree with you.  I attribute that to the elimination of pensions and life-long health care in most industries and erosion of safety nets in general.

Actually, most people never were covered by a pension; peak coverage was only about 40% of the working population in the early 90s.  Safety nets in this country really are at an all-time high (Medicare coverage, SS coverage, Medicaid coverage, etc).  What the middle class today has to contend with is nothing different than what the middle class has had to deal with in the past.  Middle class 25 years ago: rising college/healthcare costs, tumultuous unemployments/economy of the 80s, Cold War, Wall St crash of 1987, Savings and Loan Crisis.  Middle class 50 years ago: fluctuating unemployment due to end of WWII, 1960s, stagflation in the 70s and OPEC oil embargo, Cold War. 

50 years ago a middle class family had one car, a small 1000-1500 sq foot house, and food on the table.  As baby boomer women entered the workforce, two cars became the norm for a middle class family.  Food, shelter, basic transportation, and the ability to save and invest in the prosperity of this country through the stock market (or other means such as real estate) is available to the middle class of today just like that of 25 and 50 years ago.  Yes, college has become more expensive, and yet the median graduating student loan balance is only about $12,800, which results in a starting salary increase (HS grad vs BS/BA) of roughly the same amount!

One major difference of the middle class of today vs 25 or 50 years ago is the ease of consumer access to debt.  Credit cards were non-existent in the 50s, and had not reached consumer saturation in the 80s.  So much of the middle class' financial issues can be attributed to poor use (and misunderstanding) of debt - maybe in some degree due to the relative abundance and stability this country enjoys compared to past times of scarcity (40s-50s during after WWII) or uncertainty (70s-80s Stagflation and near-peak of the Cold War during Soviet Afghanistan incursion and Abel Archer).


Title: Re: The Secret Shame of Middle-Class Americans
Post by: One Noisy Cat on April 21, 2016, 04:16:18 PM
I would like to know how much their family makes and what they spend it on. How much on the wedding they tapped the 401(k) for.

I don't have any children or nieces/nephews. But is it really necessary to send your kids to private schools? I am four years younger than this guy and growing up in the 1960s in upstate New York my public schools were great for elementary and junior high and okay for high school. The valedictorian got into Dartmouth and while he struggled to find himself after graduating (very intense guy, needed to try different things) is now a successful lawyer. The salutatorian went to Harvard and is successful as a political advisor. The guy who was probably third went to Brown, Columbia  Business and Yale Law (always joking about how Harvard never saw the light) and was successful on Wall Street before dying of a sudden heart attack a few years ago. It's great parents will do things to make their kids successful but is private school really necessary? Couldn't you get some books from the library and have additional home courses if you feel the public school is inadequate?  Coupled with living in the Hamptons, I shudder to think of the mortgage he has.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: plainjane on April 21, 2016, 05:32:43 PM
What I really found disturbing is that he convinced his parents to pay for his daughter. No way would I let my kids do that to me or no way I would have ever asked my parents.  I hope they have $ in their old age.

And the one daughter did many years of school and is a social worker.  Who are great people, but make very little money.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: hernandz on April 21, 2016, 05:57:31 PM
The author was on public radio's Marketplace to discuss the article.  Sadly, he had nothing to say about what steps he was taking to try and improve his situation. The host commended him for his honesty in disclosing, but I think was a little surprised that the author remained pessimistic about his financial situation. 

That was very disheartening to hear.  I very much hoped that the author would reveal that having faced his financial situation, he was taking some, any, steps to improve or that he would have suggestions for others in a similar situation.   
Title: Re: The Secret Shame of Middle-Class Americans
Post by: galliver on April 21, 2016, 08:31:26 PM
That Bloomberg article is good.  I really think that the Atlantic article tapped into another force for consumerism that I see all the time - spending on your kids.

Quote
On the East Coast, affluent parents of bright children explain that they absolutely must live in the best possible school district, and send their kid to the most prestigious possible college. In “flyover country,” parents explain that they have to have a nice new car for the kids, because safety. Also a bevy of very expensive activities, from travel sports to marching band, because otherwise their lives will be blighted. Auto accidents are declining, and bright, motivated kids are probably going to do OK no matter where they go to school. Yet parents can convince themselves to spend near-infinite amounts seeking marginal improvements.

I see people on the East coast who are paying >50% of their take home pay on their mortgage in order to send their kids to the best public schools.  Lexington, MA, for example,  has a median house price of $838,000.  They are also spending thousands on all the trimmings, fancy activities, sleep away camp, expensive sports or horse riding lessons etc...   It is one thing to say no to your own spending habits, it is another to say no to your kids when all of their friends are going on a class trip, or are in a travel sports league etc....  I'm not sure how to stop the arms race on kid related spending, because the drive to have your kids succeed no matter what the cost is really hard to overcome.

I don't think it's a terrible thing necessarily to stretch yourself for your kids' education; my parents rented in some expensive neighborhoods on a postdoc researcher's salary...because they had 3 bright kids (objectively, we all took advanced classes and got A's) and private school x3 adds up faster than the rent premium. We genuinely utilized what the good school district(s) offered (particularly: AP courses), and if we hadn't, one of the surrounding districts would probably have been just fine for us. But since they weren't minimizing rent, they kept everything else down. Not quite the barest of bones; they lived life and supported us living ours, but given the choice between a camping trip and upgrading the TV...they'd choose camping trip. No all-inclusive Disney packages or horseback riding camp or 16th birthday cars here!

I'm with those who advocate that "middle class" is an "or" lifestyle not an "and" lifestyle. To live a life with ALL the trimmings in these sorts of areas, you're upper-middle-class at least. Maybe you're in a nicer area, but in a smaller house, or condo, or even apartment. Maybe you don't get new cars, and regardless whether or not you do, you wear them out. Maybe your nice cell phone lasts you 3-4 years, not 1-2. Maybe you send your kids to public school, or cut down their extracurriculars from 5 to 1 or 2 (especially if they are older and know their interests). Maybe you vacation to a resort or cruise...once in 5-10 years, not annually, and drive to the nearest lake/mountain/national park the other years.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: jody on April 22, 2016, 05:26:33 AM
All colleges have financial aid calculators online (required by Congress). I put in estimates of his income ($150,000?) and home equity ($0?) and it appears that he would have received a lot of aid from Stanford for one of the daughter's undergraduate education. He says colleges are extortionists, but is he taking massive aid and then calling them names?

Title: Re: The Secret Shame of Middle-Class Americans
Post by: 2Cent on April 22, 2016, 05:59:55 AM
The term "middle class" is BS.   Ask just about anyone you know and I'd venture that they will tell you they are "middle class", and that anyone with 30% less income is low income, and anyone with 30% more is the upper class.
It is always funny to hear Americans talk about the middle class as it is actually a Marxist concept and means something very different than middle income.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on April 22, 2016, 06:56:34 AM
The term "middle class" is BS.   Ask just about anyone you know and I'd venture that they will tell you they are "middle class", and that anyone with 30% less income is low income, and anyone with 30% more is the upper class.
It is always funny to hear Americans talk about the middle class as it is actually a Marxist concept and means something very different than middle income.

Barnum and Marx were contemporaries. It was Marx who started to solidly identify class based on whether a person controlled the source of his or her income. The word "class" was just one of several that Marx redefined for many. ("Bourgeoise" was another one.) However, Barnum was the more influential of the two in terms of North American culture.

Prior to the late 1800s, going back to the Romans at least, class had more to do with what family you were born into. What a person did for a living, and the source and quantity of his or her income, was considered more an effect of his or her class than a determining factor in which class he or she belonged to. But starting in the 1800s the American and European notions of class started to deviate sharply. I don't know that the Marxist interpretation was ever fully embraced throughout Europe but I do believe it was more intuitively understood.

Americans tend to use the Barnum model rather than the Marx model for two reasons. First, any American who was around during the McCarthy era or the Cold War was terrified to actually read Marx for fear of prosecution or blacklisting from his or her job. That level of social censorship, not all of which was necessarily enforced by government, wasn't a common thing in most of western Europe. (By contrast, in eastern Europe, reading Marx was kind of mandatory, but due to state enforced censorship they didn't go in for a lot of Barnum-esque culture.) Second, the USA never had organized means for class enforcement in the plebian/patrician sense or the feudal sense, except for the institution of slavery. When slavery was abolished the last means for using the law as a means of class enforcement collapsed.

Not having a means of class enforcement eventually created problems with class definition. The USA lacked a strong guild tradition which was never entirely replaced by unions. Land was never apportioned by a central feudal authority due to lack of means of enforcement on a large scale, and the government was deliberately set up without a means of granting hereditary titles or political authority. After a generation or two, all that was really left to exclude people from one clique or another were money and regional ties.

Europe, by contrast, has had mechanisms for class enforcement throughout most of its history. Some persist to this day.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: iris lily on April 22, 2016, 07:24:29 AM
What I really found disturbing is that he convinced his parents to pay for his daughter. No way would I let my kids do that to me or no way I would have ever asked my parents.  I hope they have $ in their old age.
The author of this article is a self entitled bore who is too old to learn new (frugal, MM
M) tricks.

I think the point above that needs not wants are now more expensive than in the past is good, but also there are shrewd ways to manage them.

I am a baby boomer and did fine, of course, due to the prevailing thought that we got it all on a silver platter.  :)

But I am amazed that our younger generation of neices and nephews are doing fine financially as well. Some are better than others (the chem engineer husband and wife team with MMM habits will beat everyone hands down!)  but I know if only one who receives economic outpatient care from his grandfather, and that is for a medical condition.

Of course none of us live in the Hamptons. Maybe thats a place to start, Mr. Author.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Hadilly on April 22, 2016, 07:28:39 AM
I'm glad to see this discussion. I heard the interview on NPR and then read the article. My ultimate take away was how vitally crucial it is to live below one's means. If that is a guiding principle in making decisions, then you avoid all these cumulative disastrous choices, unlike the author.

Gotta say, I find the 47% figure appalling. It is one thing to run your checking account so tight you don't have $400 (that would be me), but that's because the excess gets transferred to Vanguard. I honestly would have thought the percentage would have been more like 10% or 15%.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metric Mouse on April 22, 2016, 07:37:12 AM
The comment section is pretty encouraging, I don't see a ton of people crying over the unfairness of this guy's suffering.

This guy's situation, along with half the country apparently is reason enough to talk about fixing Social Security and/or figuring out how Gen X and Millenials are going to retire. Ya think the shrieks are bad now that the boomers are hitting retirement? Hell, at least Boomers bought houses, us millenials don't even buy houses! Stagnant wages, and growing health care costs are going to decimate this generation upon retirement.

You know who really doesn't buy houses - Generation Z! The true entitlement generation; almost all of them still living with parents, very few if any have full time jobs, they just want to sit around and play video games and shop at the mall (with mommy and daddy's money, of course).  How in the hell are THOSE people going to retire!?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 22, 2016, 07:51:23 AM
All colleges have financial aid calculators online (required by Congress). I put in estimates of his income ($150,000?) and home equity ($0?) and it appears that he would have received a lot of aid from Stanford for one of the daughter's undergraduate education. He says colleges are extortionists, but is he taking massive aid and then calling them names?

I'm not sure that student loan debt over $50, $100K, $150K can be considered "aid."  At some point, gigantic student loan debt becomes crushing debt that prevents a middle class lifestyle depending on income and job security.  If parents guarantee the loans, then the crushing debt can become multi-generational.  The alternative, not attending college, also inhibits a middle class lifestyle.  Even dual income households are unable to live the same lifestyle with the same retirement security that single income households were able to achieve 50 years ago.  This may be because they are not managing their money perfectly and overspending on their children but the reality is is that most people in every generation engage is less than optimal financial decision making.  The difference is that when you have retirement security via a pension, your dumb financial decisions made in your twenties, thirties and forties are not as pronounced.  Making bad financial decisions when you are young and invincible is simply human nature.  Foisting an economic system that ignores human nature will cause many more problems than it will solve.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 22, 2016, 07:56:37 AM
The comment section is pretty encouraging, I don't see a ton of people crying over the unfairness of this guy's suffering.

This guy's situation, along with half the country apparently is reason enough to talk about fixing Social Security and/or figuring out how Gen X and Millenials are going to retire. Ya think the shrieks are bad now that the boomers are hitting retirement? Hell, at least Boomers bought houses, us millenials don't even buy houses! Stagnant wages, and growing health care costs are going to decimate this generation upon retirement.

You know who really doesn't buy houses - Generation Z! The true entitlement generation; almost all of them still living with parents, very few if any have full time jobs, they just want to sit around and play video games and shop at the mall (with mommy and daddy's money, of course).  How in the hell are THOSE people going to retire!?

Generation Z will have a rough road.  Student loan debt coupled with Gen X and Millennials chasing retirement security by working into their late sixties and  buying up cheap homes and jacking up the rents will make it tough for many of them to build wealth in the same manner that we are able to do it now.  Of course, there will be Generation Z billionaires in new and existing fields, but I suspect that the nation's current do it yourself retirement system that almost mandates generational exploitation (why not, we're already discussing Karl Marx) will result in further erosion of the middle class.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: plainjane on April 22, 2016, 07:59:53 AM
We are incredibly frugal and savers and we had three years in a row with medical emergencies - we hit our OUT OF POCKET max two years in a row. Another year would have taken us perilously close to draining our non retirement "emergency" savings. Then our 12 year old fridge died, then our water heater leaked, then our cat got sick, then an ice storm put a tree through roof, now our 14 year old car is on it's last legs. It was a rough three years.

Stories like this also emphasize the importance of the order of returns.  You are dealing well because your rough three years are after several years here you had a chance to create a buffer for yourselves.  If they had happened at the beginning, you'd be digging out with interest rates against you.

It's a success that you've been able to cope with all that and still didn't drain the emergency savings - that's what they're there for.  You should pat yourselves on the back.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Making Cookies on April 22, 2016, 08:04:00 AM
Even $150K is not insurmountable. DINKS (w/ kids delayed to the future) live on one income and put the other ~$50K income towards the student loan debt. Gone in 3-4 years. Is that so impossible?

All it takes is determination to accomplish this.

Same with paying off a mortgage.

Sure, this delays kids, prohibits fancy things and trips for a while but then a person has the rest of their life to live without years of the financial debt storm clouds hanging over their heads.

Oh I know, we're supposed to delay the debt and pay into investments for that extra 3-4 years of compound interest but really, I'd rather have less worry and stress about the debt. 3-4 of investment compound interest vs 3-4 years of debt interest.

We got serious at one point about $9K worth of debt and paid it off in two months. Eating in and watching TV. We ate good, had fun, etc.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 22, 2016, 08:14:28 AM
Even $150K is not insurmountable. DINKS (w/ kids delayed to the future) live on one income and put the other ~$50K income towards the student loan debt. Gone in 3-4 years. Is that so impossible?

All it takes is determination to accomplish this.

Same with paying off a mortgage.

Sure, this delays kids, prohibits fancy things and trips for a while but then a person has the rest of their life to live without years of the financial debt storm clouds hanging over their heads.

Oh I know, we're supposed to delay the debt and pay into investments for that extra 3-4 years of compound interest but really, I'd rather have less worry and stress about the debt. 3-4 of investment compound interest vs 3-4 years of debt interest.

We got serious at one point about $9K worth of debt and paid it off in two months. Eating in and watching TV. We ate good, had fun, etc.

A system that requires marriage (and not having children) to pay off student loan debt seems a bit broken to me.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: StarBright on April 22, 2016, 08:33:33 AM
[

 . . .So these days, I think a lot of people that I know aren't savvy on how to fix things, or don't want to, or don't have the time.  That can come to bite them.  I've got neighbors and friends who have had problems with leaky roofs, blocked sewer lines (we have one of those too!), etc.  The guy with a SAHM doesn't have much money, so he does it all himself out of necessity (especially when the sewer repair was quoted at $17k).  Some of the other neighbors moan about not being able to pay to replace the roof, but they spend thousands every year on vacations and entertainment.

I've gotten questions like:
"How did you pay for your roof?"  With a check.
"What are you going to do about the sewer main?" Pay for someone to replace it.

Now, we are lucky, I suppose, that we are frugal enough and high income enough to be able to weather it.  But part of it is just growing up and knowing that things are going to break.  Am I happy about the $4500 tax bill followed by the $8500 sewer bill?  No.  Ouch.  But we have the money.

And part of it is time too - the families with 2 working parents are crunched for time - so it's a lot harder to replace your own roof when you've got three kids and a wife who works full time.  You pick your battles.

MM1970 - Yes! I am picking up what you are puttin' down. This is such a fantastic point and I think it is very generational. My grandparents on both sides grew up in the depression and were poor but man, they knew how to to do stuff! Cook, Sew, build, take care of horses, raise chickens, etc. Post WWII the grandfathers moved into Union jobs (Ford and Bell Telephone) and lived middle class lives in the suburbs: 1 car, nice little houses and they took pride in being able to hire people for less interesting tasks. My parents grew up in late 50s and 60s and lived golden age childhoods. They still knew how to do some stuff (basic home repair, yard work, basic car maintenance) but they didn't learn the survival skills of their parents. My parents in turn were the first in their families to get white collar jobs and outsourced even more.

So I grew up in the 80s and 90s and learned less than my parents because they hired out things like car maintenance but I can still do cosmetic stuff and yard work. My husband, conversely, grew up distinctly upper middle class and had never mowed a lawn or painted a wall or refinished a floor until he met me.

It is the whole point of the middle class and parenting, right? To have your children be better off than you. And I think that is where this sense of dread and failure is coming from - my kids might not be better off than me and we might not be able to offer them a childhood and young adulthood that was better than ours even though we're scrambling to do so. This is where folks fall into the credit trap.

Which brings us to now and going forward. I think it is okay to admit and embrace that we might not be able to do what our parents did. I think it is fair to say that things might be harder  in some ways now when comparing middle class to middle class. The big thing (and what the author of the original Atlantic piece did not do) is to accept the reality and try to live with it (while also potentially trying to change it). You can live within your means and still advocate what you think is a fairer tax system or education system or whatever!

I think this is a really interesting and actually, distinctly American and middle class issue. In so many cases I think it comes down to how do we give our children a better life. It is the American mythos - work hard and you and your family will prosper and better things will keep coming your way. It's a little religious (the righteous prosper) and bit a nationalist and full of American exceptionalism and it might all be false (and that's okay) on a large scale. So on an individual level it might come down to living within your means, but on a larger scale it might take rewriting the prescriptive narrative of the American Middle Class.

Sorry for the ramble. y'all but I love this thread and it is helping me clarify some thoughts on this issue :)

Title: Re: The Secret Shame of Middle-Class Americans
Post by: jody on April 22, 2016, 09:00:48 AM
All colleges have financial aid calculators online (required by Congress). I put in estimates of his income ($150,000?) and home equity ($0?) and it appears that he would have received a lot of aid from Stanford for one of the daughter's undergraduate education. He says colleges are extortionists, but is he taking massive aid and then calling them names?

I'm not sure that student loan debt over $50, $100K, $150K can be considered "aid."  At some point, gigantic student loan debt becomes crushing debt that prevents a middle class lifestyle depending on income and job security.  If parents guarantee the loans, then the crushing debt can become multi-generational.  The alternative, not attending college, also inhibits a middle class lifestyle.  Even dual income households are unable to live the same lifestyle with the same retirement security that single income households were able to achieve 50 years ago.  This may be because they are not managing their money perfectly and overspending on their children but the reality is is that most people in every generation engage is less than optimal financial decision making.  The difference is that when you have retirement security via a pension, your dumb financial decisions made in your twenties, thirties and forties are not as pronounced.  Making bad financial decisions when you are young and invincible is simply human nature.  Foisting an economic system that ignores human nature will cause many more problems than it will solve.

The Stanford calculator says they would get $41,000 of grant aid per year with no loans in the package. ($64,900 total costs = $41,000 grant aid + $18,900 parental contribution + $2,200 student contribution + $2,800 student academic year job + $0 loans)
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 22, 2016, 09:09:00 AM
All colleges have financial aid calculators online (required by Congress). I put in estimates of his income ($150,000?) and home equity ($0?) and it appears that he would have received a lot of aid from Stanford for one of the daughter's undergraduate education. He says colleges are extortionists, but is he taking massive aid and then calling them names?

I'm not sure that student loan debt over $50, $100K, $150K can be considered "aid."  At some point, gigantic student loan debt becomes crushing debt that prevents a middle class lifestyle depending on income and job security.  If parents guarantee the loans, then the crushing debt can become multi-generational.  The alternative, not attending college, also inhibits a middle class lifestyle.  Even dual income households are unable to live the same lifestyle with the same retirement security that single income households were able to achieve 50 years ago.  This may be because they are not managing their money perfectly and overspending on their children but the reality is is that most people in every generation engage is less than optimal financial decision making.  The difference is that when you have retirement security via a pension, your dumb financial decisions made in your twenties, thirties and forties are not as pronounced.  Making bad financial decisions when you are young and invincible is simply human nature.  Foisting an economic system that ignores human nature will cause many more problems than it will solve.

The Stanford calculator says they would get $41,000 of grant aid per year with no loans in the package. ($64,900 total costs = $41,000 grant aid + $18,900 parental contribution + $2,200 student contribution + $2,800 student academic year job + $0 loans)

So our higher ed funding system also works if everyone goes to Stanford (and the parents pay $20K annually)?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 22, 2016, 09:30:45 AM
Even $150K is not insurmountable. DINKS (w/ kids delayed to the future) live on one income and put the other ~$50K income towards the student loan debt. Gone in 3-4 years. Is that so impossible?

All it takes is determination to accomplish this.

Same with paying off a mortgage.

Sure, this delays kids, prohibits fancy things and trips for a while but then a person has the rest of their life to live without years of the financial debt storm clouds hanging over their heads.

Oh I know, we're supposed to delay the debt and pay into investments for that extra 3-4 years of compound interest but really, I'd rather have less worry and stress about the debt. 3-4 of investment compound interest vs 3-4 years of debt interest.

We got serious at one point about $9K worth of debt and paid it off in two months. Eating in and watching TV. We ate good, had fun, etc.

A system that requires marriage (and not having children) to pay off student loan debt seems a bit broken to me.

DINKs was used as an example, based on personal experience it seems. You don't need to get married. After graduation and landing a decent job get some roommates and rent the cheapest possible accommodations for a few years. Live cheap and use the excess to pay down loans. It won't be glamorous, but I promise you'll survive and your future self with thank you.

As for kids....don't have them while you're drowning in debt, and don't have them outside of marriage. Kids are difficult enough in even the most ideal of scenarios.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on April 22, 2016, 09:31:51 AM
It is the whole point of the middle class and parenting, right? To have your children be better off than you. And I think that is where this sense of dread and failure is coming from - my kids might not be better off than me and we might not be able to offer them a childhood and young adulthood that was better than ours even though we're scrambling to do so. This is where folks fall into the credit trap.

Which brings us to now and going forward. I think it is okay to admit and embrace that we might not be able to do what our parents did.

If more people were willing to do that, I doubt there'd be as much consumer spending. Why is it so difficult to accept that economic conditions have changed over time, or to adjust our expectations to suit reality? People used to adapt when times got difficult by scaling their consumption to suit their means.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: AM43 on April 22, 2016, 09:53:40 AM
Yes, it's hard not to want the "best" for your kids.  But, the best is not usually had at a price.  The best is a stable family, time at home to study and be encouraged. family activities together.  You do NOT need 800K house to provide the "best" life for your child.  We live in a shitty district so I do send my kid to private school...but it's 4500 bucks a year.  I saved at least 150k on my house.  I can afford to spend a couple thousand on school for a few years.  Once she has a solid foundation and study habits, she can go to a public high school.  Drowning yourself in debt is not how to provide a good foundation for your child.  IMO

THIS^^^

Always providing "The Best" of everything is bad for kids. It creates impossible expectations, turns them into narcissists, and limits their adaptability. I want my kids to struggle a bit with the less-than-ideal, which forces them to be resourceful. Other kids aren't being kind or cooperating on the playground? Unless you're in some kind of real actual danger, don't come crying to me, work it out or brush it off and do something else. The key, I think, is to figure out how much you can stretch your kids without overwhelming them, which should increase as they mature and gain experience.

+1
Agree 100%
Only if more people would see it that way, things would have been different.
Instead, new generation of kids are weak, spoiled, physically unfit, expect everything to be handed to them.
I mostly blame parents for their own doing, as I see it all around me every day.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: zephyr911 on April 22, 2016, 10:02:26 AM
That Bloomberg article is good.  I really think that the Atlantic article tapped into another force for consumerism that I see all the time - spending on your kids.

Quote
On the East Coast, affluent parents of bright children explain that they absolutely must live in the best possible school district, and send their kid to the most prestigious possible college. In “flyover country,” parents explain that they have to have a nice new car for the kids, because safety. Also a bevy of very expensive activities, from travel sports to marching band, because otherwise their lives will be blighted. Auto accidents are declining, and bright, motivated kids are probably going to do OK no matter where they go to school. Yet parents can convince themselves to spend near-infinite amounts seeking marginal improvements.

I see people on the East coast who are paying >50% of their take home pay on their mortgage in order to send their kids to the best public schools.  Lexington, MA, for example,  has a median house price of $838,000.  They are also spending thousands on all the trimmings, fancy activities, sleep away camp, expensive sports or horse riding lessons etc...   It is one thing to say no to your own spending habits, it is another to say no to your kids when all of their friends are going on a class trip, or are in a travel sports league etc....  I'm not sure how to stop the arms race on kid related spending, because the drive to have your kids succeed no matter what the cost is really hard to overcome.
Well, it's easy. You stop, take a deep breath, and realize that the best-funded kids still often end up being lazy assholes, and those who just get basic love and support at home can be billionaire entrepreneurs.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metric Mouse on April 22, 2016, 10:05:03 AM
The comment section is pretty encouraging, I don't see a ton of people crying over the unfairness of this guy's suffering.

This guy's situation, along with half the country apparently is reason enough to talk about fixing Social Security and/or figuring out how Gen X and Millenials are going to retire. Ya think the shrieks are bad now that the boomers are hitting retirement? Hell, at least Boomers bought houses, us millenials don't even buy houses! Stagnant wages, and growing health care costs are going to decimate this generation upon retirement.

You know who really doesn't buy houses - Generation Z! The true entitlement generation; almost all of them still living with parents, very few if any have full time jobs, they just want to sit around and play video games and shop at the mall (with mommy and daddy's money, of course).  How in the hell are THOSE people going to retire!?

Generation Z will have a rough road.  Student loan debt coupled with Gen X and Millennials chasing retirement security by working into their late sixties and  buying up cheap homes and jacking up the rents will make it tough for many of them to build wealth in the same manner that we are able to do it now.  Of course, there will be Generation Z billionaires in new and existing fields, but I suspect that the nation's current do it yourself retirement system that almost mandates generational exploitation (why not, we're already discussing Karl Marx) will result in further erosion of the middle class.

How is this different from every pervious generation?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Daisyedwards800 on April 22, 2016, 10:05:17 AM
http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/

Nearly half of "middle-class" America would struggle to come up with $400 to cover an emergency.  Whatever savings we do have goes to things like weddings ("We have no retirement savings, because we emptied a small 401(k) to pay for our younger daughter’s wedding.")

Not scolding the guy - he admits that he's made the mistake of living beyond his means for too long and it seems he's working hard to correct this. At the same time, he's giving people an out by putting blame on banks/CC companies, universities, etc. Now, I'm no fan of these entities, I think they're all blood suckers. But the sad reality is that no one *really* cares about your finances other than you. Politicians only care about getting reelected, and no one wins elections by talking about responsibility and financial independence. Besides, all the politicians are in cahoots with these industries. So I don't see much hope of this being solved at a policy level.

Perhaps the overarching problem is that the "middle-class lifestyle" has inflated beyond what we can afford, and people just assume this is how they're expected to live. You don't need to send your kids to expensive universities, or drain your retirement account to pay for weddings, or put your kids in private schools, or buy cars on credit, or pay for cable or expensive phone plans. It's unfortunate that he doesn't advocate for a different perspective on our lifestyles and instead ends the article with a defeatist tone: "What so many of us have been suffering for so many years may just seem like a rough patch. But it is far more likely to be our lives."

I think people assume that journalists are wise and know things.  But they don't.  They are just like anybody else.  The reason he doesn't end on any optimistic note or offer any solutions is because he is KNEE DEEP in the thought process that got him there. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: pachnik on April 22, 2016, 10:14:36 AM
It is the whole point of the middle class and parenting, right? To have your children be better off than you. And I think that is where this sense of dread and failure is coming from - my kids might not be better off than me and we might not be able to offer them a childhood and young adulthood that was better than ours even though we're scrambling to do so. This is where folks fall into the credit trap.

Which brings us to now and going forward. I think it is okay to admit and embrace that we might not be able to do what our parents did.

If more people were willing to do that, I doubt there'd be as much consumer spending. Why is it so difficult to accept that economic conditions have changed over time, or to adjust our expectations to suit reality? People used to adapt when times got difficult by scaling their consumption to suit their means.

To me, it is clear that economic conditions have changed over time.   But perhaps there is an expectation that economic conditions should always be improving over time?  Personally, I don't think this is realistic. 

I am Canadian but I don't think things are very different over the border re: consumer debt. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: MrMoogle on April 22, 2016, 10:20:38 AM
It is the whole point of the middle class and parenting, right? To have your children be better off than you. And I think that is where this sense of dread and failure is coming from - my kids might not be better off than me and we might not be able to offer them a childhood and young adulthood that was better than ours even though we're scrambling to do so. This is where folks fall into the credit trap.

Which brings us to now and going forward. I think it is okay to admit and embrace that we might not be able to do what our parents did.

If more people were willing to do that, I doubt there'd be as much consumer spending. Why is it so difficult to accept that economic conditions have changed over time, or to adjust our expectations to suit reality? People used to adapt when times got difficult by scaling their consumption to suit their means.

To me, it is clear that economic conditions have changed over time.   But perhaps there is an expectation that economic conditions should always be improving over time?  Personally, I don't think this is realistic. 

I am Canadian but I don't think things are very different over the border re: consumer debt. 

Well history doesn't show constant improvement.  It's like the stock market, give it enough time, and things improve, but there's no guarantee that tomorrow will be better than today.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: CNM on April 22, 2016, 10:34:34 AM
Re. economic conditions improving over time

It seems like in some ways it has, and in others it hasn't.  If you're an underrepresented group or a woman, it has probably improved.  If you're a factory worker, perhaps they haven't compared to the 70s.  The quality of life maybe has improved, depending on how that is evaluated.  It also depends on what "golden" time we're comparing things to.  Someone mentioned the great depression; I think we can all agree that present times are better compared to that.

That is one problem with the article- there are so many factors that come into play when analyzing a nebulous concept like "better off."  Compared to when?  For whom? Better in what way?

Title: Re: The Secret Shame of Middle-Class Americans
Post by: Le Dérisoire on April 22, 2016, 10:59:41 AM
Barnum and Marx were contemporaries. It was Marx who started to solidly identify class based on whether a person controlled the source of his or her income. The word "class" was just one of several that Marx redefined for many. ("Bourgeoise" was another one.) However, Barnum was the more influential of the two in terms of North American culture.

You're a good writer and seem knowledgeable in that area. Have you considered writing something on the subject? Do you have a book to recommend?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Daisyedwards800 on April 22, 2016, 11:03:40 AM

This is a very good point.  I can't remember which book it was "The Way We Never Were", or "The Two Income Trap" or ???

Anyway, a book I read at some point talked about how it requires 2 incomes to be middle class now.  In some ways, we spend more - housing is more expensive, particularly if you want a decent school district.  Entertainment is cheaper, and cars are a much better deal.  Cars didn't used to survive past 100,000 miles, for example.

This- Two income trap. We are living almost exactly like my parents did at the same age: same size house (1100 sqf), same two kids, etc. but we do it on two jobs wheres I had a dad that worked and a stay at home mom.

We've run the numbers and we could get by with one us staying home but our standard of living would drop significantly (as would our ability to save). Sure - cars and TVs are cheaper but health insurance is insane.

We are incredibly frugal and savers and we had three years in a row with medical emergencies - we hit our OUT OF POCKET max two years in a row. Another year would have taken us perilously close to draining our non retirement "emergency" savings. Then our 12 year old fridge died, then our water heater leaked, then our cat got sick, then an ice storm put a tree through roof, now our 14 year old car is on it's last legs. It was a rough three years.

We are people that are not making "bad" choices and we feel impoverished all of the time. Because of our good habits I know that we'll be fine but I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

Ah but you are not factoring in the value of the childcare that your mother did.  Add in at least half of your husband or your income for that!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on April 22, 2016, 11:07:21 AM
There's the argument that the boom economy after WWII was an anomaly. It was easy for the US to be overflowing with high paying jobs when Europe was rubble and Asia wasn't a thing, economically. The high paying jobs from GM with gold plated pensions and healthcare benefits were an illusion or only sustainable for a short period of time.

There's a lot of talk about stagnant wages, but there's evidence that total compensation has gone up due to increased benefit spending, mainly healthcare. It's also hard to compare "high" spending today when the same thing didn't exist 30 years ago. CT scans are expensive, but they didn't exist in 1960 and HIV was a death sentence in 1980. Now life expectancy is similar to the general population, if treated.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: doggyfizzle on April 22, 2016, 11:16:59 AM
I'm not sure that student loan debt over $50, $100K, $150K can be considered "aid."  At some point, gigantic student loan debt becomes crushing debt that prevents a middle class lifestyle depending on income and job security.  If parents guarantee the loans, then the crushing debt can become multi-generational.  The alternative, not attending college, also inhibits a middle class lifestyle.  Even dual income households are unable to live the same lifestyle with the same retirement security that single income households were able to achieve 50 years ago.  This may be because they are not managing their money perfectly and overspending on their children but the reality is is that most people in every generation engage is less than optimal financial decision making.  The difference is that when you have retirement security via a pension, your dumb financial decisions made in your twenties, thirties and forties are not as pronounced.  Making bad financial decisions when you are young and invincible is simply human nature.  Foisting an economic system that ignores human nature will cause many more problems than it will solve.

First, about the 50-100k student loan balances: according to DOE student loan statistics, borrowers with the highest student loan balances tend to be the LEAST likely to default.  In most cases, these are students graduating with professional and medical degrees, so that level of debt is not typically "crushing" compared to the beginning post-graduate incomes those students are likely to earn (100k+).  75% of college students in this country graduate with less than 25k in debt, which is not at all "crushing" either.  The majority of the borrowers who have debt above 25k and are not professional or medical graduates made the choice to take debt out either for a private university degree or a for-profit college, which was a personal choice (and a poor one in my opinion).  Not attending college doesn't necessarily prohibit a middle class lifestyle; vocational and trade schools can provide a skill set that offers middle class wages typically in 1-3 years of training and apprenticeship.

Second stop with the retirement myth that 50 years ago everything was great.  In fact, retirement in this country was more bleak in the past than it was today.  Retirement ages didn't begin to drop until the 60s, when Social Security and Medicare benefits began to be widely available.  The old-age poverty rate was nearly 40% in the 60s, compared to less than 10% today.  Peak pension coverage was roughly 40% in the 90s, which still left more than half of the working-age population not covered by pensions.  In the "good old days of the 60s" less than 25% of workers had pension coverage, compared to about 34% today!  IRAs were not available to workers until 1974, and 401ks weren't available until 1978.  It is a choice workers make by not contributing to these tax-advantaged accounts, just like the choice students make by attending college and (in some cases) taking on ridiculous amounts of debt without considering career prospects.  People of each generation have made poor financial choices in their 20s, but as their careers progress through their 30s and 40s these choices become less consequential as their earnings begin to increase.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on April 22, 2016, 12:14:29 PM
Barnum and Marx were contemporaries. It was Marx who started to solidly identify class based on whether a person controlled the source of his or her income. The word "class" was just one of several that Marx redefined for many. ("Bourgeoise" was another one.) However, Barnum was the more influential of the two in terms of North American culture.

You're a good writer and seem knowledgeable in that area. Have you considered writing something on the subject? Do you have a book to recommend?

I might scrape together a comparative essay on the subject, but I'm actually busy with a book on sustainable charity management.

For Marx, the foreword to just about any translation of Das Kapital (or any of his other major works) will provide a great deal of biographical information that helps to place him in a bigger historical context. It should be easily accessible in any public library these days.

Comparatively little has been written about Barnum from a scholarly perspective, possibly because nothing he wrote ever spawned a violent revolution. His autobiography is available but should probably be taken with a few grains of salt, and I wouldn't put a huge amount of emphasis on the Beau Bridges movie although it's got a fair bit of introductory material. Joel Benton and Bluford Adams have each published books on him but you'd probably have to put in a special order through the library.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on April 22, 2016, 01:04:15 PM
The comment section is pretty encouraging, I don't see a ton of people crying over the unfairness of this guy's suffering.

This guy's situation, along with half the country apparently is reason enough to talk about fixing Social Security and/or figuring out how Gen X and Millenials are going to retire. Ya think the shrieks are bad now that the boomers are hitting retirement? Hell, at least Boomers bought houses, us millenials don't even buy houses! Stagnant wages, and growing health care costs are going to decimate this generation upon retirement.

You know who really doesn't buy houses - Generation Z! The true entitlement generation; almost all of them still living with parents, very few if any have full time jobs, they just want to sit around and play video games and shop at the mall (with mommy and daddy's money, of course).  How in the hell are THOSE people going to retire!?
Yeah, my 10 and 3 year old kids are nothing but a money suck.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: NP on April 22, 2016, 03:22:35 PM
We are incredibly frugal and savers and we had three years in a row with medical emergencies [...] then our cat got sick [...]

In the rural area where I grew up it was very common to have various animals around the house. If a pet got sick, it was put out of its misery - quickly and painlessly because the owners cared. Buying medical care for a pet (as opposed to expensive livestock) would have been considered insanely extravagant unless you were a millionaire.

Most people here are better off than my family was when I was a child, so spending more than we did on pets is probably a luxury that's not unreasonable for many. But to consider pet-related expenses an 'emergency' strikes me as odd. As MMM himself has pointed out, pets are optional (http://www.mrmoneymustache.com/2015/09/07/great-news-dog-ownership-is-optional/). Pets (not service animals or livestock) are a luxury just like an expensive hobby. If it jeopardizes your savings then you aren't incredibly frugal.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Making Cookies on April 22, 2016, 03:30:11 PM
Even $150K is not insurmountable. DINKS (w/ kids delayed to the future) live on one income and put the other ~$50K income towards the student loan debt. Gone in 3-4 years. Is that so impossible?

All it takes is determination to accomplish this.

Same with paying off a mortgage.

Sure, this delays kids, prohibits fancy things and trips for a while but then a person has the rest of their life to live without years of the financial debt storm clouds hanging over their heads.

Oh I know, we're supposed to delay the debt and pay into investments for that extra 3-4 years of compound interest but really, I'd rather have less worry and stress about the debt. 3-4 of investment compound interest vs 3-4 years of debt interest.

We got serious at one point about $9K worth of debt and paid it off in two months. Eating in and watching TV. We ate good, had fun, etc.

A system that requires marriage (and not having children) to pay off student loan debt seems a bit broken to me.

My system or the American economy? Nope - neither are ideal but why not try to make the best of an imperfect situation.

Does everyone have kids immediately after marriage and/or graduation? Delay. Instead of going out and spending money, take a more MMM approach and pay down the debt like mad.

Sure I want lower tuition and a 35% raise. Until then I shall remain a creative problem solver...

I can't imagine what it must be like to have college debt when a person's own kids start college b/c the debt was not a major priority in the parents' budget early on. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Making Cookies on April 22, 2016, 03:39:54 PM
Oh - the marriage part of the example might not appeal to everyone. I just meant two people in a long term relationship of any type. One where they share their debts and their income.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: BlueHouse on April 22, 2016, 09:54:32 PM
Even $150K is not insurmountable. DINKS (w/ kids delayed to the future) live on one income and put the other ~$50K income towards the student loan debt. Gone in 3-4 years. Is that so impossible?

All it takes is determination to accomplish this.

Same with paying off a mortgage.

Sure, this delays kids, prohibits fancy things and trips for a while but then a person has the rest of their life to live without years of the financial debt storm clouds hanging over their heads.

Oh I know, we're supposed to delay the debt and pay into investments for that extra 3-4 years of compound interest but really, I'd rather have less worry and stress about the debt. 3-4 of investment compound interest vs 3-4 years of debt interest.

We got serious at one point about $9K worth of debt and paid it off in two months. Eating in and watching TV. We ate good, had fun, etc.

A system that requires marriage (and not having children) to pay off student loan debt seems a bit broken to me.
Doesn't really require marriage, but sharing a household saves a ton of money. The same can be achieved by getting a roommate
Title: Re: The Secret Shame of Middle-Class Americans
Post by: vern on April 22, 2016, 10:23:56 PM
Bed made, lie.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metric Mouse on April 23, 2016, 03:50:52 AM
The comment section is pretty encouraging, I don't see a ton of people crying over the unfairness of this guy's suffering.

This guy's situation, along with half the country apparently is reason enough to talk about fixing Social Security and/or figuring out how Gen X and Millenials are going to retire. Ya think the shrieks are bad now that the boomers are hitting retirement? Hell, at least Boomers bought houses, us millenials don't even buy houses! Stagnant wages, and growing health care costs are going to decimate this generation upon retirement.

You know who really doesn't buy houses - Generation Z! The true entitlement generation; almost all of them still living with parents, very few if any have full time jobs, they just want to sit around and play video games and shop at the mall (with mommy and daddy's money, of course).  How in the hell are THOSE people going to retire!?
Yeah, my 10 and 3 year old kids are nothing but a money suck.

:D Maybe read them MMM before bed?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 23, 2016, 05:54:35 AM
Even $150K is not insurmountable. DINKS (w/ kids delayed to the future) live on one income and put the other ~$50K income towards the student loan debt. Gone in 3-4 years. Is that so impossible?

All it takes is determination to accomplish this.

Same with paying off a mortgage.

Sure, this delays kids, prohibits fancy things and trips for a while but then a person has the rest of their life to live without years of the financial debt storm clouds hanging over their heads.

Oh I know, we're supposed to delay the debt and pay into investments for that extra 3-4 years of compound interest but really, I'd rather have less worry and stress about the debt. 3-4 of investment compound interest vs 3-4 years of debt interest.

We got serious at one point about $9K worth of debt and paid it off in two months. Eating in and watching TV. We ate good, had fun, etc.

A system that requires marriage (and not having children) to pay off student loan debt seems a bit broken to me.

My system or the American economy? Nope - neither are ideal but why not try to make the best of an imperfect situation.

Does everyone have kids immediately after marriage and/or graduation? Delay. Instead of going out and spending money, take a more MMM approach and pay down the debt like mad.

Sure I want lower tuition and a 35% raise. Until then I shall remain a creative problem solver...

I can't imagine what it must be like to have college debt when a person's own kids start college b/c the debt was not a major priority in the parents' budget early on.

I won't quibble with your micro-solutions because they are technically correct.  However, it's a little like arguing that we should all have to rent out our spare bedrooms so we can afford a tax hike to pay school teachers more or lower class sizes to better educate our children (or lower higher education tuition).  Yes, we can do it, but man, it ain't ever gonna happen.  Most of these micro-solutions sound good but they typically only work in a controlled environment or come with a catch - like having 3 loud roommates while working in a job that you hate to go to every, single day - and tend to fall apart in the real world.

That said, when you look at the big picture these types of micro-solutions, while technically correct -and likely popular amongst the over 40 crowd sipping chardonnay and remembering their own ramen noodle type sacrifices - are much more like holding the wing of a jet liner together with duct tape so it can fly.  Sooner or later there's going to be a big problem and hopefully you won't be on that jet liner (and up 40,000 feet up in the air) when the wing falls off.  Designing an economic system that overburdens students with loan debt so they can't lead somewhat normal lives after a reasonable period of sacrifice and make the predictable mistakes of (a) not liking their jobs, (B) changing careers or where they live, (c) making a few dumb financial decisions, (d) not finding or losing a job, (e) choosing a field that doesn't pay enough (remember that $40K a year sounds like a fortune to a high school senior from a financially illiterate middle class family) or  (f) simply getting sick, injured or having a medical issue that slows them down from wreaking havoc with their finances is simply a bad system. 

The higher ed system that boomers and Gen X had did not overburden students with debt and could be solved by small sacrifices - like eating ramen noodles and living with roommates for a few years out of college or graduate school.  As result, boomers and Gen X had more freedom to take risks and make mistakes in their youth and more opportunity to explore different career paths.  Millennials and Gen Z, unless the system changes, will have to pay much more to obtain their educations than prior generations and their opportunities and freedom to fail will be highly restricted.  Is this fair?  Hell no.  More importantly, is this dumb policy?  Hell yes.  We are just starting to see the negative ramifications of unaffordable higher education costs and gigantic student loan debt: delayed home buying, delayed marriage, less children, less wealth building, less opportunity, less social advancement, more insecurity, more inequality, and more anger.   When you combine these macro problems with our nation's DIY retirement system, it is truly a recipe for the erosion of the middle class and eventual financial disaster. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 23, 2016, 08:37:23 AM
I'm not sure that student loan debt over $50, $100K, $150K can be considered "aid."  At some point, gigantic student loan debt becomes crushing debt that prevents a middle class lifestyle depending on income and job security.  If parents guarantee the loans, then the crushing debt can become multi-generational.  The alternative, not attending college, also inhibits a middle class lifestyle.  Even dual income households are unable to live the same lifestyle with the same retirement security that single income households were able to achieve 50 years ago.  This may be because they are not managing their money perfectly and overspending on their children but the reality is is that most people in every generation engage is less than optimal financial decision making.  The difference is that when you have retirement security via a pension, your dumb financial decisions made in your twenties, thirties and forties are not as pronounced.  Making bad financial decisions when you are young and invincible is simply human nature.  Foisting an economic system that ignores human nature will cause many more problems than it will solve.

First, about the 50-100k student loan balances: according to DOE student loan statistics, borrowers with the highest student loan balances tend to be the LEAST likely to default.  In most cases, these are students graduating with professional and medical degrees, so that level of debt is not typically "crushing" compared to the beginning post-graduate incomes those students are likely to earn (100k+).  75% of college students in this country graduate with less than 25k in debt, which is not at all "crushing" either.  The majority of the borrowers who have debt above 25k and are not professional or medical graduates made the choice to take debt out either for a private university degree or a for-profit college, which was a personal choice (and a poor one in my opinion).  Not attending college doesn't necessarily prohibit a middle class lifestyle; vocational and trade schools can provide a skill set that offers middle class wages typically in 1-3 years of training and apprenticeship.

Second stop with the retirement myth that 50 years ago everything was great.  In fact, retirement in this country was more bleak in the past than it was today.  Retirement ages didn't begin to drop until the 60s, when Social Security and Medicare benefits began to be widely available.  The old-age poverty rate was nearly 40% in the 60s, compared to less than 10% today.  Peak pension coverage was roughly 40% in the 90s, which still left more than half of the working-age population not covered by pensions.  In the "good old days of the 60s" less than 25% of workers had pension coverage, compared to about 34% today!  IRAs were not available to workers until 1974, and 401ks weren't available until 1978.  It is a choice workers make by not contributing to these tax-advantaged accounts, just like the choice students make by attending college and (in some cases) taking on ridiculous amounts of debt without considering career prospects.  People of each generation have made poor financial choices in their 20s, but as their careers progress through their 30s and 40s these choices become less consequential as their earnings begin to increase.

In the 1960s - which, by the way, was 50 years ago - you didn't need a college degree and a masters degree to land a middle class job and live a middle class lifestyle.  Employment was much more long term in the 1960s and often one income was sufficient to raise a family of 4 or 5.  "Choosing" college is not so much of a choice now as it was in the 1960s.  Health care, housing (in a safe neighborhood with good schools) and child care are all much more expansive than in the 1960s.  Paying for these essentials impacts a person's choice on what to contribute to a 401(K) - and many don't understand it and often companies don't provide one so employees can educate themselves.   It's a much different world now than in the 1960s so I really don't buy your analysis.  It's seems like the United States' economic system is much more of a rigged game (that ignores human nature) now and that broken system is creating very high levels of economic distress (go to a Trump or Sanders rally and you will see it first hand) and likely to produce much higher than 40% poverty levels for retirees in the very near future.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: SwordGuy on April 23, 2016, 10:14:55 AM
The higher ed system that boomers and Gen X had did not overburden students with debt

And yet the median student loan debt is THOUSANDS of dollars LESS than the median price of a new car...

And I see people celebrating getting new cars all the time...

So how can student loans be so horribly bad for most people?

And, just for the record, the higher education system does not burden students with debt.  They do that to themselves.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 23, 2016, 10:17:16 AM
Even $150K is not insurmountable. DINKS (w/ kids delayed to the future) live on one income and put the other ~$50K income towards the student loan debt. Gone in 3-4 years. Is that so impossible?

All it takes is determination to accomplish this.

Same with paying off a mortgage.

Sure, this delays kids, prohibits fancy things and trips for a while but then a person has the rest of their life to live without years of the financial debt storm clouds hanging over their heads.

Oh I know, we're supposed to delay the debt and pay into investments for that extra 3-4 years of compound interest but really, I'd rather have less worry and stress about the debt. 3-4 of investment compound interest vs 3-4 years of debt interest.

We got serious at one point about $9K worth of debt and paid it off in two months. Eating in and watching TV. We ate good, had fun, etc.

A system that requires marriage (and not having children) to pay off student loan debt seems a bit broken to me.

My system or the American economy? Nope - neither are ideal but why not try to make the best of an imperfect situation.

Does everyone have kids immediately after marriage and/or graduation? Delay. Instead of going out and spending money, take a more MMM approach and pay down the debt like mad.

Sure I want lower tuition and a 35% raise. Until then I shall remain a creative problem solver...

I can't imagine what it must be like to have college debt when a person's own kids start college b/c the debt was not a major priority in the parents' budget early on.

I won't quibble with your micro-solutions because they are technically correct.  However, it's a little like arguing that we should all have to rent out our spare bedrooms so we can afford a tax hike to pay school teachers more or lower class sizes to better educate our children (or lower higher education tuition).  Yes, we can do it, but man, it ain't ever gonna happen.  Most of these micro-solutions sound good but they typically only work in a controlled environment or come with a catch - like having 3 loud roommates while working in a job that you hate to go to every, single day - and tend to fall apart in the real world.

That said, when you look at the big picture these types of micro-solutions, while technically correct -and likely popular amongst the over 40 crowd sipping chardonnay and remembering their own ramen noodle type sacrifices - are much more like holding the wing of a jet liner together with duct tape so it can fly.  Sooner or later there's going to be a big problem and hopefully you won't be on that jet liner (and up 40,000 feet up in the air) when the wing falls off.  Designing an economic system that overburdens students with loan debt so they can't lead somewhat normal lives after a reasonable period of sacrifice and make the predictable mistakes of (a) not liking their jobs, (B) changing careers or where they live, (c) making a few dumb financial decisions, (d) not finding or losing a job, (e) choosing a field that doesn't pay enough (remember that $40K a year sounds like a fortune to a high school senior from a financially illiterate middle class family) or  (f) simply getting sick, injured or having a medical issue that slows them down from wreaking havoc with their finances is simply a bad system. 

The higher ed system that boomers and Gen X had did not overburden students with debt and could be solved by small sacrifices - like eating ramen noodles and living with roommates for a few years out of college or graduate school.  As result, boomers and Gen X had more freedom to take risks and make mistakes in their youth and more opportunity to explore different career paths.  Millennials and Gen Z, unless the system changes, will have to pay much more to obtain their educations than prior generations and their opportunities and freedom to fail will be highly restricted.  Is this fair?  Hell no.  More importantly, is this dumb policy?  Hell yes.  We are just starting to see the negative ramifications of unaffordable higher education costs and gigantic student loan debt: delayed home buying, delayed marriage, less children, less wealth building, less opportunity, less social advancement, more insecurity, more inequality, and more anger.   When you combine these macro problems with our nation's DIY retirement system, it is truly a recipe for the erosion of the middle class and eventual financial disaster.

Life is hard, and it has been for every generation. Previous generations did not solve the cost of college problem with "small sacrifices." They didn't just eat ramen and that fixed everything. They worked while in school. They doubled, even tripled up in rooms. They drove junky old cars (or didn't own one). They didn't go on Spring Break trips or summer backpacking tours in Europe. They worked, scrimped, saved. It was hard then, just as it is hard now.

No generation has had the luxury of liking their jobs - most boomers don't, they stick with it because it pays the bills. It's called "work" for a reason. No generation has had a free pass on making dumb financial decisions - lots and lots of people in previous generations paid the price for making dumb choices. I know someone who went to a prestigious private college right out of highschool. She was there for a couple of years before deciding to change her major and ultimately, her school. Very few credits transferred, and she was already $40,000 in debt. That was in the mid 1990s. It set her back a number of years, but she eventually recovered. What she didn't do was complain about it being unfair, because it was the result of her choices.

I graduated with a Computer Science degree in 2001, right when the tech 1.0 bubble popped. It felt like the world was collapsing around me for 4 years. It felt very unfair, but what can you do but keep charging ahead and hope for the best. Eventually things turned around. There were cohorts of boomers that graduated into terrible economies, stagflation, war (and the draft), and so on. Life is hard.

The average student loan debt load now stands at about $35,000. That's the price of a new mid-sized car. Has this gone up in recent years? Yes. Is it the end of the world? No, it's doable. This can be paid off by working a few years full time wil living as cheap as possible. Also, that's the average amount owed. The median among borrows is closer to $15,000 because there's a small percentage of borrowers skewing the results on the high end, so for the majority of college students their loan burden is really very manageable.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metric Mouse on April 23, 2016, 10:31:00 AM
I'm not sure that student loan debt over $50, $100K, $150K can be considered "aid."  At some point, gigantic student loan debt becomes crushing debt that prevents a middle class lifestyle depending on income and job security.  If parents guarantee the loans, then the crushing debt can become multi-generational.  The alternative, not attending college, also inhibits a middle class lifestyle.  Even dual income households are unable to live the same lifestyle with the same retirement security that single income households were able to achieve 50 years ago.  This may be because they are not managing their money perfectly and overspending on their children but the reality is is that most people in every generation engage is less than optimal financial decision making.  The difference is that when you have retirement security via a pension, your dumb financial decisions made in your twenties, thirties and forties are not as pronounced.  Making bad financial decisions when you are young and invincible is simply human nature.  Foisting an economic system that ignores human nature will cause many more problems than it will solve.

First, about the 50-100k student loan balances: according to DOE student loan statistics, borrowers with the highest student loan balances tend to be the LEAST likely to default.  In most cases, these are students graduating with professional and medical degrees, so that level of debt is not typically "crushing" compared to the beginning post-graduate incomes those students are likely to earn (100k+).  75% of college students in this country graduate with less than 25k in debt, which is not at all "crushing" either.  The majority of the borrowers who have debt above 25k and are not professional or medical graduates made the choice to take debt out either for a private university degree or a for-profit college, which was a personal choice (and a poor one in my opinion).  Not attending college doesn't necessarily prohibit a middle class lifestyle; vocational and trade schools can provide a skill set that offers middle class wages typically in 1-3 years of training and apprenticeship.

Second stop with the retirement myth that 50 years ago everything was great.  In fact, retirement in this country was more bleak in the past than it was today.  Retirement ages didn't begin to drop until the 60s, when Social Security and Medicare benefits began to be widely available.  The old-age poverty rate was nearly 40% in the 60s, compared to less than 10% today.  Peak pension coverage was roughly 40% in the 90s, which still left more than half of the working-age population not covered by pensions.  In the "good old days of the 60s" less than 25% of workers had pension coverage, compared to about 34% today!  IRAs were not available to workers until 1974, and 401ks weren't available until 1978.  It is a choice workers make by not contributing to these tax-advantaged accounts, just like the choice students make by attending college and (in some cases) taking on ridiculous amounts of debt without considering career prospects.  People of each generation have made poor financial choices in their 20s, but as their careers progress through their 30s and 40s these choices become less consequential as their earnings begin to increase.


Wait wait wait... so we have much bigger houses, much better cars, cheaper, vastly more powerful technology, similar pension coverage, better educated populace, lower violent crime rates, better healthcare and long life expectancy - all on a similar income and LOWER tax rate!?  This sounds fantastic!  No wonder the boomers and gen xers have so little saved for retirement and are working until they drop; they had it much harder than the millennials! 

I think framing things this way really makes me appreciate not having to scrape by the way they did 25 or 50 years ago.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: doggyfizzle on April 23, 2016, 11:00:26 AM
I'm not sure that student loan debt over $50, $100K, $150K can be considered "aid."  At some point, gigantic student loan debt becomes crushing debt that prevents a middle class lifestyle depending on income and job security.  If parents guarantee the loans, then the crushing debt can become multi-generational.  The alternative, not attending college, also inhibits a middle class lifestyle.  Even dual income households are unable to live the same lifestyle with the same retirement security that single income households were able to achieve 50 years ago.  This may be because they are not managing their money perfectly and overspending on their children but the reality is is that most people in every generation engage is less than optimal financial decision making.  The difference is that when you have retirement security via a pension, your dumb financial decisions made in your twenties, thirties and forties are not as pronounced.  Making bad financial decisions when you are young and invincible is simply human nature.  Foisting an economic system that ignores human nature will cause many more problems than it will solve.

First, about the 50-100k student loan balances: according to DOE student loan statistics, borrowers with the highest student loan balances tend to be the LEAST likely to default.  In most cases, these are students graduating with professional and medical degrees, so that level of debt is not typically "crushing" compared to the beginning post-graduate incomes those students are likely to earn (100k+).  75% of college students in this country graduate with less than 25k in debt, which is not at all "crushing" either.  The majority of the borrowers who have debt above 25k and are not professional or medical graduates made the choice to take debt out either for a private university degree or a for-profit college, which was a personal choice (and a poor one in my opinion).  Not attending college doesn't necessarily prohibit a middle class lifestyle; vocational and trade schools can provide a skill set that offers middle class wages typically in 1-3 years of training and apprenticeship.

Second stop with the retirement myth that 50 years ago everything was great.  In fact, retirement in this country was more bleak in the past than it was today.  Retirement ages didn't begin to drop until the 60s, when Social Security and Medicare benefits began to be widely available.  The old-age poverty rate was nearly 40% in the 60s, compared to less than 10% today.  Peak pension coverage was roughly 40% in the 90s, which still left more than half of the working-age population not covered by pensions.  In the "good old days of the 60s" less than 25% of workers had pension coverage, compared to about 34% today!  IRAs were not available to workers until 1974, and 401ks weren't available until 1978.  It is a choice workers make by not contributing to these tax-advantaged accounts, just like the choice students make by attending college and (in some cases) taking on ridiculous amounts of debt without considering career prospects.  People of each generation have made poor financial choices in their 20s, but as their careers progress through their 30s and 40s these choices become less consequential as their earnings begin to increase.


Wait wait wait... so we have much bigger houses, much better cars, cheaper, vastly more powerful technology, similar pension coverage, better educated populace, lower violent crime rates, better healthcare and long life expectancy - all on a similar income and LOWER tax rate!?  This sounds fantastic!  No wonder the boomers and gen xers have so little saved for retirement and are working until they drop; they had it much harder than the millennials! 

I think framing things this way really makes me appreciate not having to scrape by the way they did 25 or 50 years ago.

I can't tell if you're being sarcastic or not, but that was basically what I was implying.  Gen Y has it made!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ender on April 23, 2016, 12:40:30 PM
People want the lives their parents have at 55 the second they turn 22.

Then they get annoyed that after a successful career their parents can have a better life than them..

If you want to compare yourself to your parents, do it at the time of their lives they were your current age....
Title: Re: The Secret Shame of Middle-Class Americans
Post by: SU on April 23, 2016, 12:47:38 PM
The part of the article that is still irritating me days later is the whining about the taxes he had to pay in one year on his book advance(s). And yet he has no retirement accounts. So while he has seen the light on many of his past errors, he still hasn't clocked to the massive hit he took by not making the most of pre-tax savings that were available to him.

I've seen plenty of artists and entertainers with similar issues of variable income discussing their strategies for income smoothing. He's not the first person in the world to get a book advance.

His inaction on this and a few other points (not involving his spouse, paying for weddings) make me think it wasn't just a lack of information, but also some arrogance or entitlement about money and the obligation to manage it that got him into his current situation.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Paul der Krake on April 23, 2016, 01:12:07 PM
People want the lives their parents have at 55 the second they turn 22.

Then they get annoyed that after a successful career their parents can have a better life than them..

If you want to compare yourself to your parents, do it at the time of their lives they were your current age....
This rings very true. The need to compare oneself to others causes a lot of heartache that really doesn't need to exist.

My parents have achieved a standard of success compared to their peers that my own family (or any of my siblings) will probably never reach. That doesn't mean I would trade places with them if offered the chance. We live in fantastic times.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ender on April 23, 2016, 02:39:13 PM
People want the lives their parents have at 55 the second they turn 22.

Then they get annoyed that after a successful career their parents can have a better life than them..

If you want to compare yourself to your parents, do it at the time of their lives they were your current age....
This rings very true. The need to compare oneself to others causes a lot of heartache that really doesn't need to exist.

My parents have achieved a standard of success compared to their peers that my own family (or any of my siblings) will probably never reach. That doesn't mean I would trade places with them if offered the chance. We live in fantastic times.

I think it's more an expectation thing.

You spend 18-22 years of your life at a certain standard of living. Except you remember only the last few, but it becomes your expectation for what life is like. But you are still 22 (or whatever).

It's normal to do this because it is what we do - our parents lifestyle is what we think if normal because it's all we know.

Unless you consciously decide not to do this, it's hard not to do this projection of expectation. Especially if parents aren't supportive and press their expectations onto you, too. "You don't have a house?" Or "you don't have a new car?" Etc.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Tyson on April 23, 2016, 03:37:03 PM
I can't tell if you're being sarcastic or not, but that was basically what I was implying.  Gen Y has it made!

As MMM notes - life is an exploding volcano of awesomeness :P
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 24, 2016, 05:10:39 AM
Even $150K is not insurmountable. DINKS (w/ kids delayed to the future) live on one income and put the other ~$50K income towards the student loan debt. Gone in 3-4 years. Is that so impossible?

All it takes is determination to accomplish this.

Same with paying off a mortgage.

Sure, this delays kids, prohibits fancy things and trips for a while but then a person has the rest of their life to live without years of the financial debt storm clouds hanging over their heads.

Oh I know, we're supposed to delay the debt and pay into investments for that extra 3-4 years of compound interest but really, I'd rather have less worry and stress about the debt. 3-4 of investment compound interest vs 3-4 years of debt interest.

We got serious at one point about $9K worth of debt and paid it off in two months. Eating in and watching TV. We ate good, had fun, etc.

A system that requires marriage (and not having children) to pay off student loan debt seems a bit broken to me.

My system or the American economy? Nope - neither are ideal but why not try to make the best of an imperfect situation.

Does everyone have kids immediately after marriage and/or graduation? Delay. Instead of going out and spending money, take a more MMM approach and pay down the debt like mad.

Sure I want lower tuition and a 35% raise. Until then I shall remain a creative problem solver...

I can't imagine what it must be like to have college debt when a person's own kids start college b/c the debt was not a major priority in the parents' budget early on.

I won't quibble with your micro-solutions because they are technically correct.  However, it's a little like arguing that we should all have to rent out our spare bedrooms so we can afford a tax hike to pay school teachers more or lower class sizes to better educate our children (or lower higher education tuition).  Yes, we can do it, but man, it ain't ever gonna happen.  Most of these micro-solutions sound good but they typically only work in a controlled environment or come with a catch - like having 3 loud roommates while working in a job that you hate to go to every, single day - and tend to fall apart in the real world.

That said, when you look at the big picture these types of micro-solutions, while technically correct -and likely popular amongst the over 40 crowd sipping chardonnay and remembering their own ramen noodle type sacrifices - are much more like holding the wing of a jet liner together with duct tape so it can fly.  Sooner or later there's going to be a big problem and hopefully you won't be on that jet liner (and up 40,000 feet up in the air) when the wing falls off.  Designing an economic system that overburdens students with loan debt so they can't lead somewhat normal lives after a reasonable period of sacrifice and make the predictable mistakes of (a) not liking their jobs, (B) changing careers or where they live, (c) making a few dumb financial decisions, (d) not finding or losing a job, (e) choosing a field that doesn't pay enough (remember that $40K a year sounds like a fortune to a high school senior from a financially illiterate middle class family) or  (f) simply getting sick, injured or having a medical issue that slows them down from wreaking havoc with their finances is simply a bad system. 

The higher ed system that boomers and Gen X had did not overburden students with debt and could be solved by small sacrifices - like eating ramen noodles and living with roommates for a few years out of college or graduate school.  As result, boomers and Gen X had more freedom to take risks and make mistakes in their youth and more opportunity to explore different career paths.  Millennials and Gen Z, unless the system changes, will have to pay much more to obtain their educations than prior generations and their opportunities and freedom to fail will be highly restricted.  Is this fair?  Hell no.  More importantly, is this dumb policy?  Hell yes.  We are just starting to see the negative ramifications of unaffordable higher education costs and gigantic student loan debt: delayed home buying, delayed marriage, less children, less wealth building, less opportunity, less social advancement, more insecurity, more inequality, and more anger.   When you combine these macro problems with our nation's DIY retirement system, it is truly a recipe for the erosion of the middle class and eventual financial disaster.

Life is hard, and it has been for every generation. Previous generations did not solve the cost of college problem with "small sacrifices." They didn't just eat ramen and that fixed everything. They worked while in school. They doubled, even tripled up in rooms. They drove junky old cars (or didn't own one). They didn't go on Spring Break trips or summer backpacking tours in Europe. They worked, scrimped, saved. It was hard then, just as it is hard now.

No generation has had the luxury of liking their jobs - most boomers don't, they stick with it because it pays the bills. It's called "work" for a reason. No generation has had a free pass on making dumb financial decisions - lots and lots of people in previous generations paid the price for making dumb choices. I know someone who went to a prestigious private college right out of highschool. She was there for a couple of years before deciding to change her major and ultimately, her school. Very few credits transferred, and she was already $40,000 in debt. That was in the mid 1990s. It set her back a number of years, but she eventually recovered. What she didn't do was complain about it being unfair, because it was the result of her choices.

I graduated with a Computer Science degree in 2001, right when the tech 1.0 bubble popped. It felt like the world was collapsing around me for 4 years. It felt very unfair, but what can you do but keep charging ahead and hope for the best. Eventually things turned around. There were cohorts of boomers that graduated into terrible economies, stagflation, war (and the draft), and so on. Life is hard.

The average student loan debt load now stands at about $35,000. That's the price of a new mid-sized car. Has this gone up in recent years? Yes. Is it the end of the world? No, it's doable. This can be paid off by working a few years full time wil living as cheap as possible. Also, that's the average amount owed. The median among borrows is closer to $15,000 because there's a small percentage of borrowers skewing the results on the high end, so for the majority of college students their loan burden is really very manageable.

In 1985, when a new car cost $15,000, college tuition at my state university was about 20% of that cost or $3,000.  In California, public university tuition was about 10% of that cost or $1,500 per year.  Private school tuition was even cheaper than a car - at about $8 or $9,000 per year.  Tuition was even cheaper in the 1960s and 1970s.  In the 60s, 70s and 80s, you could realistically flip burgers and make it through college without any debt.  From 1960-1990, there wasn't nearly as much credentialism that pigeon holes certain majors into certain jobs and mandates (via law or business practice) a diploma to even get an interview as there exists today.  If you borrowed money, you could work it off fairly easily even if you didn't use your degree for a job.  The car example is a good one to demonstrate the impact of higher education inflation on Millennials and Generation Z and how their debt burden is much more significant than previous generations.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 24, 2016, 05:41:20 AM
The higher ed system that boomers and Gen X had did not overburden students with debt

And yet the median student loan debt is THOUSANDS of dollars LESS than the median price of a new car...

And I see people celebrating getting new cars all the time...

So how can student loans be so horribly bad for most people?

And, just for the record, the higher education system does not burden students with debt.  They do that to themselves.

I think when you take into account the rise of credentialism (https://en.wikipedia.org/wiki/Credentialism_and_educational_inflation) in the United States, I'm not sure that current higher education students should be blamed for taking on debt to pursue a career.

I'd agree with you more about the car analogy so long as students, like car owners, could simply shed their debt in a Trumplike manner, via US Bankruptcy court.  So long as US students are not protected by laws that other debtors can use when they hit a problem, you really can't compare a consumer debt to a student loan debt.

When you have an economic system with unchecked consumer credit, an unchecked advertising industry that promotes consumer spending, tugs on the heart strings of parents and promotes worship of bling, an underfunded public education system where all of the participants have a different retirement system (pensions) than do the parents of the students  (and the students when they graduate) that seems oblivious to the need for serious financial literacy education, and a higher education industrial complex that has priced itself out of the range of the middle class without student loans granted irrespective of ability to pay, you will create a system with horrible runaway inflation, terrible personal financial decisions, high debt, bad economic consequences and ultimately massive financial problems for many highly educated individuals who didn't have the good fortune to be born into a family that could pay their tuition.  We are creating a nation of haves and have nots by allowing this massive student loan debt.  You can micro-engineer all day long but your work is both incredibly inefficient and likely to be discarded by those with the debt any way because it ignores human nature and does not take into account the current economic system we have created.  The system is broken and it's time to cut the Gordian Knot to fix it.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: JR on April 24, 2016, 06:27:22 AM
What I really found disturbing is that he convinced his parents to pay for his daughter. No way would I let my kids do that to me or no way I would have ever asked my parents.  I hope they have $ in their old age.

And the one daughter did many years of school and is a social worker.  Who are great people, but make very little money.

plainjane,
The earning potential of social workers increases dramatically at the masters level. My wife went from earning $26k/yr with a bachelors in social work to nearly $70k/yr with a MSW and LSW the year she finished her degree. If she does the 3000 hours of clinical work for her LCSW (like the daughter in the article) she could do private practice and charge $50-$70 per hour in our area. LCSWs are also going to be able to diagnose clients soon in our state which could potentially increase the earning potential of LCSWs here.

Oh course I will agree that the daughter in the article didn't need to go to the schools she did. My wife earned her bachelors and masters degree from the local state university.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 24, 2016, 07:52:45 AM
What I really found disturbing is that he convinced his parents to pay for his daughter. No way would I let my kids do that to me or no way I would have ever asked my parents.  I hope they have $ in their old age.

And the one daughter did many years of school and is a social worker.  Who are great people, but make very little money.

plainjane,
The earning potential of social workers increases dramatically at the masters level. My wife went from earning $26k/yr with a bachelors in social work to nearly $70k/yr with a MSW and LSW the year she finished her degree. If she does the 3000 hours of clinical work for her LCSW (like the daughter in the article) she could do private practice and charge $50-$70 per hour in our area. LCSWs are also going to be able to diagnose clients soon in our state which could potentially increase the earning potential of LCSWs here.

Oh course I will agree that the daughter in the article didn't need to go to the schools she did. My wife earned her bachelors and masters degree from the local state university.

Why do you need a Masters degree to do this work and earn this income?  I suppose that an advanced degree is nice to have it but why is it absolutely essential as opposed to alternative paths like simply working in the field or being very smart and having a different degree?  Why should a piece of paper serve as a roadblock to prevent others from competing?  My bet is that the social worker lobby passed a law requiring the additional degree and credentials to artificially lower competition.  The education lobby, I am certain, was very happy to provide testimony on the essential nature of their diplomas before ANY person should be even considered for employment is they very important job...This is a perfect example of credentialism driving up the cost of higher education, deflating the value of a batchelor degree (and HS Diploma) and skewing the marketplace.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: JR on April 24, 2016, 08:11:29 AM
What I really found disturbing is that he convinced his parents to pay for his daughter. No way would I let my kids do that to me or no way I would have ever asked my parents.  I hope they have $ in their old age.

And the one daughter did many years of school and is a social worker.  Who are great people, but make very little money.

plainjane,
The earning potential of social workers increases dramatically at the masters level. My wife went from earning $26k/yr with a bachelors in social work to nearly $70k/yr with a MSW and LSW the year she finished her degree. If she does the 3000 hours of clinical work for her LCSW (like the daughter in the article) she could do private practice and charge $50-$70 per hour in our area. LCSWs are also going to be able to diagnose clients soon in our state which could potentially increase the earning potential of LCSWs here.

Oh course I will agree that the daughter in the article didn't need to go to the schools she did. My wife earned her bachelors and masters degree from the local state university.

Why do you need a Masters degree to do this work and earn this income?  I suppose that an advanced degree is nice to have it but why is it absolutely essential to alternative paths like simply working in the field or being very smart and having a different degree?  Why should a piece of paper serve as a roadblock to prevent others from competing?  My bet is that the social worker lobby passed a law requiring the additional degree and credentials to artificially lower competition.  The education lobby, I am certain, was very happy to provide testimony on the essential nature of their diplomas before ANY person should be even considered for employment is they very important job...This is a perfect example of credentialism driving up the cost of higher education, deflating the value of a batchelor degree (and HS Diploma) and skewing the marketplace.

Sid,
Are you suggesting that anyone with a HS diploma is capable of being a clinical therapist? I don't think the insurance companies would be okay with anyone with a HS Diploma being able to bill insurance for clinical therapy. Psychologists have a similar certification called the licensed professional counselor, and the NASW most certainly does not lobby on their behalf.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ender on April 24, 2016, 08:17:33 AM
What I really found disturbing is that he convinced his parents to pay for his daughter. No way would I let my kids do that to me or no way I would have ever asked my parents.  I hope they have $ in their old age.

And the one daughter did many years of school and is a social worker.  Who are great people, but make very little money.

plainjane,
The earning potential of social workers increases dramatically at the masters level. My wife went from earning $26k/yr with a bachelors in social work to nearly $70k/yr with a MSW and LSW the year she finished her degree. If she does the 3000 hours of clinical work for her LCSW (like the daughter in the article) she could do private practice and charge $50-$70 per hour in our area. LCSWs are also going to be able to diagnose clients soon in our state which could potentially increase the earning potential of LCSWs here.

Oh course I will agree that the daughter in the article didn't need to go to the schools she did. My wife earned her bachelors and masters degree from the local state university.

Why do you need a Masters degree to do this work and earn this income?  I suppose that an advanced degree is nice to have it but why is it absolutely essential to alternative paths like simply working in the field or being very smart and having a different degree?  Why should a piece of paper serve as a roadblock to prevent others from competing?  My bet is that the social worker lobby passed a law requiring the additional degree and credentials to artificially lower competition.  The education lobby, I am certain, was very happy to provide testimony on the essential nature of their diplomas before ANY person should be even considered for employment is they very important job...This is a perfect example of credentialism driving up the cost of higher education, deflating the value of a batchelor degree (and HS Diploma) and skewing the marketplace.

Sid,
Are you suggesting that anyone with a HS diploma is capable of being a clinical therapist? I don't think the insurance companies would be okay with anyone with a HS Diploma being able to bill insurance for clinical therapy. Psychologists have a similar certification called the licensed professional counselor, and the NASW most certainly does not lobby on their behalf.

+1

Title: Re: The Secret Shame of Middle-Class Americans
Post by: MissNancyPryor on April 24, 2016, 09:13:44 AM
Well shit, the author said it all when he said "I like to think I appear reasonably prosperous" at the beginning of the article.  What a complainypants dumbass; that single phrase really sums it all up for him and so many in his situation.  Looking good was far more important than actually paying for what they could afford or swallowing one morsel of pride by living within their means.     

This guy has actually been on TV and written for major publications but never got his shit together.  I can't bring myself to shed a tear for his stupidity and I absolutely do not want to hear about how he now thinks we should build more crap into our government to protect idiots like this from themselves. 

He lives in a time with an embarrassment of riches (quality of life, health standards, and available knowledge) and is instantly above 99% of the rest of the world by the life lottery of being an educated American, and yet he still makes stooopid choices, over and over and over again, trying to look like far more than what he really is.  But no, it is not his fault according to him (his repeated lament about "I screwed up" is an obvious literary tool--if he started with that idea he wouldn't have written the article at all and hammered how it is society's pressures that caused this).  Moron.         
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Tyson on April 24, 2016, 11:06:04 AM
Well shit, the author said it all when he said "I like to think I appear reasonably prosperous" at the beginning of the article.  What a complainypants dumbass; that single phrase really sums it all up for him and so many in his situation.  Looking good was far more important than actually paying for what they could afford or swallowing one morsel of pride by living within their means.     

This guy has actually been on TV and written for major publications but never got his shit together.  I can't bring myself to shed a tear for his stupidity and I absolutely do not want to hear about how he now thinks we should build more crap into our government to protect idiots like this from themselves. 

He lives in a time with an embarrassment of riches (quality of life, health standards, and available knowledge) and is instantly above 99% of the rest of the world by the life lottery of being an educated American, and yet he still makes stooopid choices, over and over and over again, trying to look like far more than what he really is.  But no, it is not his fault according to him (his repeated lament about "I screwed up" is an obvious literary tool--if he started with that idea he wouldn't have written the article at all and hammered how it is society's pressures that caused this).  Moron.       

So true.  I went through a period of extended unemployment recently and I pretty much gave up any idea of "keeping up appearances".  Went into hardcore frugal mode.  It was interesting that I found out I could still be happy (more or less) even with a greatly reduced income.  So many people never learn this, and the idea of even a small reduction in lifestyle sends them into a panic.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on April 24, 2016, 11:54:09 AM
What I really found disturbing is that he convinced his parents to pay for his daughter. No way would I let my kids do that to me or no way I would have ever asked my parents.  I hope they have $ in their old age.

And the one daughter did many years of school and is a social worker.  Who are great people, but make very little money.

plainjane,
The earning potential of social workers increases dramatically at the masters level. My wife went from earning $26k/yr with a bachelors in social work to nearly $70k/yr with a MSW and LSW the year she finished her degree. If she does the 3000 hours of clinical work for her LCSW (like the daughter in the article) she could do private practice and charge $50-$70 per hour in our area. LCSWs are also going to be able to diagnose clients soon in our state which could potentially increase the earning potential of LCSWs here.

Oh course I will agree that the daughter in the article didn't need to go to the schools she did. My wife earned her bachelors and masters degree from the local state university.

Why do you need a Masters degree to do this work and earn this income?  I suppose that an advanced degree is nice to have it but why is it absolutely essential to alternative paths like simply working in the field or being very smart and having a different degree?  Why should a piece of paper serve as a roadblock to prevent others from competing?  My bet is that the social worker lobby passed a law requiring the additional degree and credentials to artificially lower competition.  The education lobby, I am certain, was very happy to provide testimony on the essential nature of their diplomas before ANY person should be even considered for employment is they very important job...This is a perfect example of credentialism driving up the cost of higher education, deflating the value of a batchelor degree (and HS Diploma) and skewing the marketplace.

Sid,
Are you suggesting that anyone with a HS diploma is capable of being a clinical therapist? I don't think the insurance companies would be okay with anyone with a HS Diploma being able to bill insurance for clinical therapy. Psychologists have a similar certification called the licensed professional counselor, and the NASW most certainly does not lobby on their behalf.

Of course not, but why should an intelligent person working as social worker - and who can do the work - be automatically be excluded from advancement because they lack a credential that is often obtained simply by expending money and showing up (see credentialisms twin brother "grade inflation")?  If the laws are changed to not require credentials, then the insurance rates will not be impacted so long as qualified people are hired.  That's how it worked in the 1960's, 70s and 80s.  Insurance rates may even go down if folks are hired based on quality of work rather than on producing a piece of paper.  Keep in mind that under our current credentialism  system, Sigmund Freud would not have been qualified to do clinical therapy.

My point is twofold.  First,we should not chastise Millennialls and Gen Z for "choosing" to incur student loan debt when their profession requires an ever increasing amount of higher education in order to advance because of credentialism.  I also offered this point because I think credentialism is one of the reasons why higher education has become so expensive over the last 50 years.  We keep piling on educational requirements to qualify for a job interview and the colleges know it.  As a result, they adjust their prices accordingly.  If credentialism was curtailed, the costs of higher education would be reduced. At a time when the cost of an undergraduate education at a public university is climbing over $100,000, I think rolling back some credentialism is worth examining as a part of a solution to reduce the costs of higher ed and lower student loan debt.

More on credentialism here: https://en.wikipedia.org/wiki/Credentialism_and_educational_inflation

For instance, in the late 1980s, a bachelor's degree was the standard ticket to enter the profession of occupational therapy.[21] By the 1990s, a master's degree was expected. Today, a doctorate is becoming the norm. This change was due to the explosion of bachelor's degrees spurred by the rise in knowledge exchange—hinged on population growth and technological innovation. With the advent of globalization, recent years see the Ph.D. taking over the role of the master's degree—especially professional degrees. Universities are currently reporting significant renewed interest in their graduate programs, with a particular focus on Ph.D. study, as candidates consider retraining or adding new skills to their resumes that will benefit them if the economic situation improves. What once was considered to be specific training for the academic profession and open to a minor assemblage of individuals absorbed in research has become a benchmark for some job-entry positions. This change is forcing individuals to push for more advanced degrees to be considered for some positions.

The creeping-credentials phenomenon has resulted in the growth in the higher-education industry, with institutions expanding their offerings beyond the traditional graduate degrees. Offerings now include increasingly narrow, job-specific training courses. Degrees aimed at working professionals often come with very high tuition pricing.

Another consequence of credential creep is the increased time spent in school, with the resulting deferment of career establishment.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: BTDretire on April 24, 2016, 12:34:58 PM
"He knew it and did it anyway."

Without THIS, we would have no novels, no King Lear (!), no entertaining thought-provoking self-created tragedies.
Life would be calm, smooth, zen.
On some level, people always DO know it, and do it ANYWAY.
They go home with that person, they postpone that call, they buy that car, they marry that person, they take that job, they let their kids get away with that one thing . . ..
There is a small voice inside saying NOOOOO, but it's surprisingly easy to shut that voice UP.
"Pipe down, voice of reason!"
And then it gets harder to hear it the next time.
People gotta turn off the phone/internet/what have you and settle down by themselves long enough to hear that voice. But they don't.
So they "know it and do it anyway." Very human.

 Having the knowledge about the right thing to do and doing the right thing,
often have unequal value in the mind of the decision maker.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Travis on April 24, 2016, 12:45:13 PM
The author complains about not having enough paid work/not being paid enough. Simple solution: he should have cut this thing in half and got paid twice.  That article was about two completely different subjects.  The first was the plight of a lot of Americans struggling with wage stagnation, availability of debt, and financial illiteracy.  That last point was pretty much the only thing common with his personal story.  He barely tied together our debt-financed lives and wage issues.  It was almost three articles (it certainly was in length).

As many others have beat to death already, he's an idiot and completely disconnected from his situation.  He admits to several instances of financial stupidity and generally poor decision-making, then turns right back around and implies it's the "systems" fault.  Dude, it's not Corporate America or Congress' fault you sold off what little retirement savings you had to pay for a wedding!  Ask a Mustachian has a thread full of folks who paid the minimum required to get married and are leading healthy happy lives.  He kept his wife out of the workforce when they desperately needed money and kept their financial problems hidden from her. One wonders if he's still doing it.

The personal side of his story could have been summarized by elaborating on his "keeping up with the Joneses" mentality and his lack of financial education (and the fact he's still doing it).  I was glad to see at some point he cut up his credit cards, but he writes as if he's still entitled to a particular standard of living he was never able to afford in the first place.  His admission that writing is not a high-earning profession should have been a tip off a very long time ago.

I love the Bloomberg review of his article.  It did a far better job of making Gabler's point for him in a fraction of the words.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: BTDretire on April 24, 2016, 01:04:20 PM
The comment section is pretty encouraging, I don't see a ton of people crying over the unfairness of this guy's suffering.

This guy's situation, along with half the country apparently is reason enough to talk about fixing Social Security and/or figuring out how Gen X and Millenials are going to retire.

  Sorry, fixing Social Security, means you pay more in, you retire later, you get reduced benefits. You might get some additional tax free savings, but what percent
of households take advantage of tax free savings.

Quote
Ya think the shrieks are bad now that the boomers are hitting retirement? Hell, at least Boomers bought houses, us millenials don't even buy houses! Stagnant wages, and growing health care costs are going to decimate this generation upon retirement.

Are we in the classic decline of a democracy?
The people have voted the largess to themselves, and it's not there, it's borrowed.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: BTDretire on April 24, 2016, 02:43:50 PM
What's' clear to me from the article is that the author needs a complete mental reset.  A paradigm shift, to borrow from Khun.  Until that happens, he'll just keep making different variations of the same mistakes over and over again (as he is still doing).  I know, because I used to be like that.  It took long term unemployment and finding MMM to make that shift for me.  I feel lucky.  And I feel sorry for this guy and his family.

 This guy was born in 1950, so he is 65 or 66 now, so I don't know that he can change
his financial condition much now. Being a writer, maybe he can continue to earn income into his eighties. That would give him 15 years to live under his income.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 24, 2016, 05:15:11 PM
In 1985, when a new car cost $15,000, college tuition at my state university was about 20% of that cost or $3,000.  In California, public university tuition was about 10% of that cost or $1,500 per year.  Private school tuition was even cheaper than a car - at about $8 or $9,000 per year.  Tuition was even cheaper in the 1960s and 1970s.  In the 60s, 70s and 80s, you could realistically flip burgers and make it through college without any debt.  From 1960-1990, there wasn't nearly as much credentialism that pigeon holes certain majors into certain jobs and mandates (via law or business practice) a diploma to even get an interview as there exists today.  If you borrowed money, you could work it off fairly easily even if you didn't use your degree for a job.  The car example is a good one to demonstrate the impact of higher education inflation on Millennials and Generation Z and how their debt burden is much more significant than previous generations.

Cars aren't a good point of comparison as they've improved a lot over several decades while the minimum standards have also increased. It's not an apples to apples comparison.

Yes, the cost of tuition for higher ed has increased, but it is still doable and the doom-and-gloom about millennials being indentured servants is generally overblown. Unless you spent a fortune at a fancypants university (that's your choice), the expense of college is still largely dominated by the opportunity cost and living expenses. Students can save a large amount of money by doing gen ed at a community college and undergrad at a local state university while living at home. Add in part time work/summer jobs and it is possible to get a degree with little or no debt.

Credentialism for many fields has existed for a long time, nothing new here. However, a large percentage of people currently work in jobs that don't match their field of study. This also is not a new trend.

Things change. The boomers and other generations had some things better and some things worse.  Tuition is more expensive now, but many other things are cheaper/better. Millennials are entering a workforce with more safety nets than previous generations (family medical leave, antidiscrimination protection, whistleblower protections, sexual harassment protections, etc.).  Life in the workplace in 2016 is undoubtedly better for women and minorities.

I don't think this intergenerational competition is healthy or constructive. You're focused on relatively small (and negative) differences. Take a step back and get some broader perspective. We live in unprecedented times with a lifestyle many times better than royalty just 100-200 years ago. We've never gone through anything close to the Great Depression or WWII (the folks who were teens in the 30's and then drafted into the war effort - talk about life being unfair!!). Most cancer is now treatable, whereas just a couple decades ago it was a certain death sentence. Same for HIV and other diseases. Our food is healthier. We lead healthier lives and our life expectancy is longer.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: LAL on April 24, 2016, 08:32:00 PM
I don't think we can assess how badly people are saving for retirement until we hit the point where pensions are a thing of the past.  Now because people live so much longer pensions have to pay out so much more.  This contributes to the underfunding.  The expectation people would die by 75.  Now it's more like 90. 

And as someone in my mid-30s most people I know save next to nothing and have no pension.  My mom commented she saved nothing and retired with a 401k of $200k at 55.  But she's got a pension and free medical for life for her and my dad.  Her pension is worth around $1.5M since she make around $5k/month and it's COLA.  So you tell me how does a social worker today generate that sort of pension to retire at 55 and free medical premiums for life for spouse and worker?  Is it possible?  Even my mom agrees it's not.  The state doesn't even offer that anymore.  By the way her contributions were 7.5% for her working tenure.  And she ran through that in less than 4 years and now lives off the state. I'm happy for her, but I'm just pointing out that most people (with same jobs now) I doubt will be able to replicate her retirement pension/benefits.

So yes it is harder to live a middle class lifestyle. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: doggyfizzle on April 24, 2016, 09:25:50 PM
I don't think we can assess how badly people are saving for retirement until we hit the point where pensions are a thing of the past.  Now because people live so much longer pensions have to pay out so much more.  This contributes to the underfunding.  The expectation people would die by 75.  Now it's more like 90. 

And as someone in my mid-30s most people I know save next to nothing and have no pension.  My mom commented she saved nothing and retired with a 401k of $200k at 55.  But she's got a pension and free medical for life for her and my dad.  Her pension is worth around $1.5M since she make around $5k/month and it's COLA.  So you tell me how does a social worker today generate that sort of pension to retire at 55 and free medical premiums for life for spouse and worker?  Is it possible?  Even my mom agrees it's not.  The state doesn't even offer that anymore.  By the way her contributions were 7.5% for her working tenure.  And she ran through that in less than 4 years and now lives off the state. I'm happy for her, but I'm just pointing out that most people (with same jobs now) I doubt will be able to replicate her retirement pension/benefits.

So yes it is harder to live a middle class lifestyle.

Most people were never able to replicate her pension income.  Does she participate in Social Security?  Many workers covered by state pensions forgo social security benefits, so figure that if she had worked until 62, she would likely be able to earn between 1-2k a month in Social Security benefits.  Factor in some diligent 401k contributions and a 1-5% employer match, and she would have been able to replicate that same 5k/month pension without much sacrifice.  Most everyone qualifies for Medicare at 65, and thanks to ACA, you can get coverage before then if you choose to retire.  If you're willing to defer some gratification, building your own pension from a 401k isn't terribly difficult.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: LAL on April 25, 2016, 10:23:11 AM
She also gets SS to boot at 62.  I think around $2k/month.  Nope but her pension was common for state workers. Now there is a pension and free medical but only if you work 25 years.  And No medical for spouses.  Now you have to work until 62 or take a hit.  There are  a lot more rules in place.  It's not the same to replicate her pension. I would argue that most social workers would probably kill for what she had comparing apples to apples.  We aren't talking engineers and other lucrative careers.  But a school teacher, social worker, etc low paying professional jobs probably can't make her retirement happen.  Can a well paid engineer?  Yes.  But not a comparable job to hers.  She'd agree and say it's not possible.  Before a lot of people in non college degree jobs like administrative assisstant, janitor, clerks had great retirements.  Same jobs now?  They probably have nothing saved.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: stoaX on April 25, 2016, 10:42:48 AM
"We live in unprecedented times with a lifestyle many times better than royalty just 100-200 years ago. We've never gone through anything close to the Great Depression or WWII (the folks who were teens in the 30's and then drafted into the war effort - talk about life being unfair!!). Most cancer is now treatable, whereas just a couple decades ago it was a certain death sentence. Same for HIV and other diseases. Our food is healthier. We lead healthier lives and our life expectancy is longer."

Thanks FINate, that was spot on.   

My takeaway when I read the article is that he thought the finances would just take care of themselves - that's not a good plan....
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on April 25, 2016, 11:44:17 AM
Quote
The higher ed system that boomers and Gen X had did not overburden students with debt and could be solved by small sacrifices - like eating ramen noodles and living with roommates for a few years out of college or graduate school.  As result, boomers and Gen X had more freedom to take risks and make mistakes in their youth and more opportunity to explore different career paths.  Millennials and Gen Z, unless the system changes, will have to pay much more to obtain their educations than prior generations and their opportunities and freedom to fail will be highly restricted.  Is this fair?  Hell no.  More importantly, is this dumb policy?  Hell yes.  We are just starting to see the negative ramifications of unaffordable higher education costs and gigantic student loan debt: delayed home buying, delayed marriage, less children, less wealth building, less opportunity, less social advancement, more insecurity, more inequality, and more anger.   When you combine these macro problems with our nation's DIY retirement system, it is truly a recipe for the erosion of the middle class and eventual financial disaster.

I don't want to argue too much about your basic premise that unaffordable higher education is a problem - it totally is.  But your details of Gen X really don't match my experience, and it's something that I think someone below has mentioned.

I ate ramen noodles and mac and cheese.  Unlike some, I lived on campus (couldn't convince roommates to move off campus, which was cheaper).  I always had roommates.
I did not own a car until I graduated and got a job.  And it was a small used car with no AC (I should have thought that through, as I was moving to DC).
I worked.  I worked every summer (the first summer, 60 hours a week at two jobs). I worked 5 out of 8 semesters.  I worked on my winter breaks (back to bagging groceries).
I had roommates after college - first, renting a cold basement that was never warmer than 58 degrees.
(I was also in the military.  I was a poor kid, and it was the best way to pay for college.  My classmates who were not in the military had similar experiences however.)
I only had my own studio apartment for 2.5 years total.  Then I got married.

My husband opted for grad school on the 7 year plan. So I worked, he went to school, and we had one car.
We didn't buy a house until our mid-30s.
We didn't have kids until mid-30s to mid-40s.


When I look at the millenials that I have worked with their experiences are...similar, really.  Same amount of penny pinching, same amount of ramen noodles.  Same delay in home buying and children (though the savvier ones are ahead on that).

The difference that I see is that a college degree is almost a requirement for a decent "middle class white collar" job.  So while my sister works as an office manager, that's a job that requires a degree now.  So there are *more* students going into debt.  In my circle, it was uncommon to borrow a lot of money for a degree, unless you were getting  a STEM degree.  If you wanted a non-STEM degree, you worked to pay for it, or your parents paid for it, or the military paid for it.  A lot of people just didn't get degrees.

And this degree requirement is something that is affecting the late boomers and early X-ers - a lot.  I have a number of friends and coworkers from my age (mid 40s) till mid-50s.  Without degrees.  They have a lot of experience.  Get laid off?  Good luck getting a new job.  Most companies require a degree.  Given a choice between a 50-year old with 30 years experience and a 30 year old with a degree?  80% of the time, that 50 year old's resume doesn't even make it to the hiring manager's desk.  Then it's years of unemployment or under employment.  That's no fun for sure.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on April 25, 2016, 11:55:35 AM
Quote
In 1985, when a new car cost $15,000, college tuition at my state university was about 20% of that cost or $3,000.  In California, public university tuition was about 10% of that cost or $1,500 per year.  Private school tuition was even cheaper than a car - at about $8 or $9,000 per year.  Tuition was even cheaper in the 1960s and 1970s.  In the 60s, 70s and 80s, you could realistically flip burgers and make it through college without any debt.  From 1960-1990, there wasn't nearly as much credentialism that pigeon holes certain majors into certain jobs and mandates (via law or business practice) a diploma to even get an interview as there exists today.  If you borrowed money, you could work it off fairly easily even if you didn't use your degree for a job.  The car example is a good one to demonstrate the impact of higher education inflation on Millennials and Generation Z and how their debt burden is much more significant than previous generations.

Your car quote is WAY off base unless you are talking larger luxury cars.

The base price of a Honda Civic in 1985 was $5400

In 1992 I bought a used Escort for $6300.

While tuition has gone up, it is going to vary a lot on where you go:
1985:
Civic: $5400
Tuition at Penn State: $2555

1992:
Escort: $6300
Tuition: $4350

Today:
Civic: $18640
Tuition: $16570

So yes, Tuition has gone up since 1985 by a factor of 6.5
A civic has gone up by a factor of 3.4

(but the car's going to last longer)
Civic
Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on April 25, 2016, 01:19:46 PM
Quote
In 1985, when a new car cost $15,000, college tuition at my state university was about 20% of that cost or $3,000.  In California, public university tuition was about 10% of that cost or $1,500 per year.  Private school tuition was even cheaper than a car - at about $8 or $9,000 per year.  Tuition was even cheaper in the 1960s and 1970s.  In the 60s, 70s and 80s, you could realistically flip burgers and make it through college without any debt.  From 1960-1990, there wasn't nearly as much credentialism that pigeon holes certain majors into certain jobs and mandates (via law or business practice) a diploma to even get an interview as there exists today.  If you borrowed money, you could work it off fairly easily even if you didn't use your degree for a job.  The car example is a good one to demonstrate the impact of higher education inflation on Millennials and Generation Z and how their debt burden is much more significant than previous generations.

Your car quote is WAY off base unless you are talking larger luxury cars.

So yes, Tuition has gone up since 1985 by a factor of 6.5
A civic has gone up by a factor of 3.4

(but the car's going to last longer)
Civic

The wage premium college graduates command is higher today as well.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Wexler on April 25, 2016, 03:08:46 PM
This is an interesting response.  Mustachian! 

http://www.vox.com/2016/4/25/11503040/midwest-savings-atlantic

If 15 percent savings feels out of reach, you should make bigger changes

If you're over 30 and have been consistently failing to reach your savings goals, it's worth treating that as an emergency in its own right. I live in Washington, DC, one of the more expensive metropolitan areas in the United States. And in the last couple of years I've had two different friends move from here to Midwestern cities — St. Louis in one case, Minneapolis in the other — after a few years of living in Washington, DC.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Seppia on April 26, 2016, 01:52:48 AM
There is soooo much fail in the article, my goodness.
If I were a writer I would live somewhere in nature, cheap and beautiful, like the area around Yellowstone, or some pets of Utah for example.
If you have a job you can do from anywhere and choose to live in one of the SINGLE MOST EXPENSIVE PLACES ON THE PLANET you cannot really blame anybody but yourself.

I'm always amazed though how people with similar destructive financial habits seem to find significant others with the same problem.
If I started spending above my means my wife would probably start hitting me very hard with a broom multiple times per day until she beat some sense into me.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Drifterrider on April 26, 2016, 05:54:47 AM
So yes it is harder to live a middle class lifestyle.

Only if one thinks middle class means a huge house, several cars, several TVs, rooms for clothing (walk in closet), multiple phone "plans", etc.

Which, some people do.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: exterous on April 26, 2016, 06:39:20 AM
I don't think we can assess how badly people are saving for retirement until we hit the point where pensions are a thing of the past.  Now because people live so much longer pensions have to pay out so much more.  This contributes to the underfunding.  The expectation people would die by 75.  Now it's more like 90. 

And as someone in my mid-30s most people I know save next to nothing and have no pension. 

While its great that your family has access to pensions I think people have this notion that they were much more common than they really were. Pensions have only ever covered a minority of people - having reached its peak of 46% coverage in 1980. That means that those today without pensions share that commonality with the majority of Americans over the last century

https://www.russell.com/documents/institutional-investors/research/defined-benefit-plans-a-brief-history.pdf (https://www.russell.com/documents/institutional-investors/research/defined-benefit-plans-a-brief-history.pdf)

Personally I think a strong argument could be made that the retirement savings and overall investment options are better today given the array of tax deferred options, index funds, low fee ETFs etc
Title: Re: The Secret Shame of Middle-Class Americans
Post by: prof61820 on April 26, 2016, 06:45:33 AM
The United States has always provided the freedom for people to "put on airs" or live beyond their means through easy credit and by not saving for future expenses like retirement or health care.  It has become even easier as of late because credit cards, for many, have obviated the need for even a cash emergency fund.  For some it is a business plan as well as an excuse for living beyond their means.  Have you ever seen a realtor driving a crappy car?  MMMers might still hire that realtor (if they knew that the realtor was also an MMMer) but others that don't share our philosophy might not.  Because of this reality, most realtors don't take the chance of showing up at a home in a substandard vehicle.  And for some, it works out really great because over their lifetime they grow to a point that their early spending - and hard work - makes up the difference for foregoing early savings and compounded interest.  The writer of the article, after all, is a writer and NY and the surrounding area is no doubt a sweet spot to live, work, get inspired and, most importantly, land new business.  I'm not sure how folks in his industry would have felt about hiring him to write books - and giving him hefty advances - if they knew that he was living below his means (smaller house in blue collar neighborhood, used cars, public schools for the kids) in order to have an emergency fund, college savings and retirement savings.  The decision makers - who can be very snobby and judgmental - in his industry may have been turned off.  He chose not to find out and put on airs and delivered a facade that he believed his bosses wanted to see - even if they were not paying him enough money to maintain that lifestyle and save for retirement.  His mistakes were that he choose to portray himself outwardly as a writer that made much more money than he - and his family - made through borrowing and not saving for the future.  When he failed to generate larger paydays, and expenses for college and health care grew at rates higher than inflation, it all came crashing down on him and he's frustrated and angry.

Now, and before everyone gets worked up here, I'm not arguing that he was correct in what he did.  I'm not arguing that society should tolerate his actions and bail him out of his predicament.  All I'm saying is that we should not be shocked or surprised when we allow people the freedoms to make really dumb financial decisions (and make it extremely easy for them via easy credit card access and student loans) because history shows that they will make these dumb decisions and then they will fail en masse.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metric Mouse on April 26, 2016, 06:51:26 AM
The United States has always provided the freedom for people to "put on airs" or live beyond their means through easy credit and by not saving for future expenses like retirement or health care.  It has become even easier as of late because credit cards, for many, have obviated the need for even a cash emergency fund.  For some it is a business plan as well as an excuse for living beyond their means.  Have you ever seen a realtor driving a crappy car?  MMMers might still hire that realtor (if they knew that the realtor was also an MMMer) but others that don't share our philosophy might not.  Because of this reality, most realtors don't take the chance of showing up at a home in a substandard vehicle.  And for some, it works out really great because over their lifetime they grow to a point that their early spending - and hard work - makes up the difference for foregoing early savings and compounded interest.  The writer of the article, after all, is a writer and NY and the surrounding area is no doubt a sweet spot to live, work, get inspired and, most importantly, land new business.  I'm not sure how folks in his industry would have felt about hiring him to write books - and giving him heft advances - if they knew that he was living below his means (smaller house in blue collar neighborhood, used cars, public schools for the kids) in order to have an emergency fund, college savings and retirement savings.  The decision makers - who can be very snobby and judgmental - in his industry may have been turned off.  He chose not to find out and put on airs and delivered a facade that he believed his bosses wanted to see - even if they were not paying him enough money to maintain that lifestyle and save for retirement.  His mistakes were that he choose to portray himself outwardly as a writer that made much more money than he, and his family made through borrowing and not saving for the future, and when he failed to generate larger paydays and expenses for college and health care grew at rates higher than inflation, its all now crashing down on him and he's frustrated and angry.

Now, and before everyone gets works up here, I'm not arguing that he was correct in what he did.  I'm not arguing that society should tolerate his actions and bail him out of his predicament.  All I'm saying is that we should not be surprised when we allow people the freedoms to make really dumb financial decisions (and make it extremely easy for them via easy credit card access and student loans) that we shouldn't be shocked or surprised when a large chunk of society makes these dumb decisions and then they fail en masse.

There's plenty of snobby and judgemental to go around. Just check out this forum!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: prof61820 on April 26, 2016, 07:02:45 AM
I don't think we can assess how badly people are saving for retirement until we hit the point where pensions are a thing of the past.  Now because people live so much longer pensions have to pay out so much more.  This contributes to the underfunding.  The expectation people would die by 75.  Now it's more like 90. 

And as someone in my mid-30s most people I know save next to nothing and have no pension. 

While its great that your family has access to pensions I think people have this notion that they were much more common than they really were. Pensions have only ever covered a minority of people - having reached its peak of 46% coverage in 1980. That means that those today without pensions share that commonality with the majority of Americans over the last century

https://www.russell.com/documents/institutional-investors/research/defined-benefit-plans-a-brief-history.pdf (https://www.russell.com/documents/institutional-investors/research/defined-benefit-plans-a-brief-history.pdf)

Personally I think a strong argument could be made that the retirement savings and overall investment options are better today given the array of tax deferred options, index funds, low fee ETFs etc

For the rich and upper middle class you are generally correct.  The one major thing that 401Ks don't provide is any real security because the individual bears the risk and there is always the potential that an epic market downturn could wipe you out or significantly slow you down.  The individual also bears the risk of outliving their retirement savings.  That's why you see so many HENRYs (High Earner Not Rich Yet) push themselves to get to FIRE and live solely off of passive income that, at least in theory, cannot be crushed by an extended bear market.  As an aside, it will be interesting to see how our nation is shaped if we create a passive earning class via 401Ks - that can leave an inheritance to their children - and those that burn up their 401Ks and leave nothing.

For middle and lower middle class earners (that don't have big earning years like MMM and many HENRYs do) that have to choose between a safe neighborhood and decent education for their children and retirement savings, like blue collar Trump and Sanders voters, most of them would probably prefer a pension - so long as it wasn't being paid by Puerto Rico or Greece.

My wife and I - who are HENRYs, savers and realists - are pushing for this passive income goal.  We'd like to have few expenses in retirement (including no mortgage), live a modest lifestyle in a low property tax area, and live solely off of the earnings in our retirement accounts and other non-retirement real estate investments and not tap the principal of our retirement accounts but instead hold it in reserve in case of a medical emergency.  Our goal is to leave an inheritance for our kids and get them through college without any student loan debt. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 26, 2016, 08:28:11 AM
The United States has always provided the freedom for people to "put on airs" or live beyond their means through easy credit and by not saving for future expenses like retirement or health care.  It has become even easier as of late because credit cards, for many, have obviated the need for even a cash emergency fund.  For some it is a business plan as well as an excuse for living beyond their means.  Have you ever seen a realtor driving a crappy car?  MMMers might still hire that realtor (if they knew that the realtor was also an MMMer) but others that don't share our philosophy might not.  Because of this reality, most realtors don't take the chance of showing up at a home in a substandard vehicle.  And for some, it works out really great because over their lifetime they grow to a point that their early spending - and hard work - makes up the difference for foregoing early savings and compounded interest.  The writer of the article, after all, is a writer and NY and the surrounding area is no doubt a sweet spot to live, work, get inspired and, most importantly, land new business.  I'm not sure how folks in his industry would have felt about hiring him to write books - and giving him heft advances - if they knew that he was living below his means (smaller house in blue collar neighborhood, used cars, public schools for the kids) in order to have an emergency fund, college savings and retirement savings.  The decision makers - who can be very snobby and judgmental - in his industry may have been turned off.  He chose not to find out and put on airs and delivered a facade that he believed his bosses wanted to see - even if they were not paying him enough money to maintain that lifestyle and save for retirement.  His mistakes were that he choose to portray himself outwardly as a writer that made much more money than he, and his family made through borrowing and not saving for the future, and when he failed to generate larger paydays and expenses for college and health care grew at rates higher than inflation, its all now crashing down on him and he's frustrated and angry.

Now, and before everyone gets works up here, I'm not arguing that he was correct in what he did.  I'm not arguing that society should tolerate his actions and bail him out of his predicament.  All I'm saying is that we should not be surprised when we allow people the freedoms to make really dumb financial decisions (and make it extremely easy for them via easy credit card access and student loans) that we shouldn't be shocked or surprised when a large chunk of society makes these dumb decisions and then they fail en masse.

There's plenty of snobby and judgemental to go around. Just check out this forum!

Oh, the irony. Stop judging the people on this forum!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metric Mouse on April 26, 2016, 08:38:45 AM
The United States has always provided the freedom for people to "put on airs" or live beyond their means through easy credit and by not saving for future expenses like retirement or health care.  It has become even easier as of late because credit cards, for many, have obviated the need for even a cash emergency fund.  For some it is a business plan as well as an excuse for living beyond their means.  Have you ever seen a realtor driving a crappy car?  MMMers might still hire that realtor (if they knew that the realtor was also an MMMer) but others that don't share our philosophy might not.  Because of this reality, most realtors don't take the chance of showing up at a home in a substandard vehicle.  And for some, it works out really great because over their lifetime they grow to a point that their early spending - and hard work - makes up the difference for foregoing early savings and compounded interest.  The writer of the article, after all, is a writer and NY and the surrounding area is no doubt a sweet spot to live, work, get inspired and, most importantly, land new business.  I'm not sure how folks in his industry would have felt about hiring him to write books - and giving him heft advances - if they knew that he was living below his means (smaller house in blue collar neighborhood, used cars, public schools for the kids) in order to have an emergency fund, college savings and retirement savings.  The decision makers - who can be very snobby and judgmental - in his industry may have been turned off.  He chose not to find out and put on airs and delivered a facade that he believed his bosses wanted to see - even if they were not paying him enough money to maintain that lifestyle and save for retirement.  His mistakes were that he choose to portray himself outwardly as a writer that made much more money than he, and his family made through borrowing and not saving for the future, and when he failed to generate larger paydays and expenses for college and health care grew at rates higher than inflation, its all now crashing down on him and he's frustrated and angry.

Now, and before everyone gets works up here, I'm not arguing that he was correct in what he did.  I'm not arguing that society should tolerate his actions and bail him out of his predicament.  All I'm saying is that we should not be surprised when we allow people the freedoms to make really dumb financial decisions (and make it extremely easy for them via easy credit card access and student loans) that we shouldn't be shocked or surprised when a large chunk of society makes these dumb decisions and then they fail en masse.

There's plenty of snobby and judgemental to go around. Just check out this forum!

Oh, the irony. Stop judging the people on this forum!

:D  May MMM give me the strength!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Apples on April 27, 2016, 08:48:04 AM

This is a very good point.  I can't remember which book it was "The Way We Never Were", or "The Two Income Trap" or ???

Anyway, a book I read at some point talked about how it requires 2 incomes to be middle class now.  In some ways, we spend more - housing is more expensive, particularly if you want a decent school district.  Entertainment is cheaper, and cars are a much better deal.  Cars didn't used to survive past 100,000 miles, for example.

This- Two income trap. We are living almost exactly like my parents did at the same age: same size house (1100 sqf), same two kids, etc. but we do it on two jobs wheres I had a dad that worked and a stay at home mom.

We've run the numbers and we could get by with one us staying home but our standard of living would drop significantly (as would our ability to save). Sure - cars and TVs are cheaper but health insurance is insane.

We are incredibly frugal and savers and we had three years in a row with medical emergencies - we hit our OUT OF POCKET max two years in a row. Another year would have taken us perilously close to draining our non retirement "emergency" savings. Then our 12 year old fridge died, then our water heater leaked, then our cat got sick, then an ice storm put a tree through roof, now our 14 year old car is on it's last legs. It was a rough three years.

We are people that are not making "bad" choices and we feel impoverished all of the time. Because of our good habits I know that we'll be fine but I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

I was discussing this with my grandparents a few months ago.  They know young people struggling to get by, but buying TV's and entertainment systems instead of saving money when they get gifts or tax returns.  They have 2 cars instead of 1 (but I live in a rural area and I'll be damned if a SAHP is going to be home with kids without a means of transport, so I'm a big supporter of 2 car families....anyway, tangent) and a few gadgets.  And I point out that yes, a TV is $500 once and that car is $125 month.  But they could save alllll that money and not come close to paying for health insurance if (one of) the parent(s) doesn't have a good deal with it at work.  Let alone if one of them also has student loan payments and didn't take the time to switch to a low payment plan or if the loans are private because they went to a technical training school. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: StarBright on April 27, 2016, 09:57:55 AM

I was discussing this with my grandparents a few months ago.  They know young people struggling to get by, but buying TV's and entertainment systems instead of saving money when they get gifts or tax returns.  They have 2 cars instead of 1 (but I live in a rural area and I'll be damned if a SAHP is going to be home with kids without a means of transport, so I'm a big supporter of 2 car families....anyway, tangent) and a few gadgets.  And I point out that yes, a TV is $500 once and that car is $125 month.  But they could save alllll that money and not come close to paying for health insurance if (one of) the parent(s) doesn't have a good deal with it at work.  Let alone if one of them also has student loan payments and didn't take the time to switch to a low payment plan or if the loans are private because they went to a technical training school.

Exactly! $500 didn't even cover my insurance premiums for the month, let alone deductible or out of pocket max (and that's not even counting out of network max - a separate, insane amount). I think a lot of people that pooh pooh young families' expenditures must get a great deal on insurance through their jobs. I know my in-laws and parents were both like that.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 27, 2016, 10:00:47 AM

This is a very good point.  I can't remember which book it was "The Way We Never Were", or "The Two Income Trap" or ???

Anyway, a book I read at some point talked about how it requires 2 incomes to be middle class now.  In some ways, we spend more - housing is more expensive, particularly if you want a decent school district.  Entertainment is cheaper, and cars are a much better deal.  Cars didn't used to survive past 100,000 miles, for example.

This- Two income trap. We are living almost exactly like my parents did at the same age: same size house (1100 sqf), same two kids, etc. but we do it on two jobs wheres I had a dad that worked and a stay at home mom.

We've run the numbers and we could get by with one us staying home but our standard of living would drop significantly (as would our ability to save). Sure - cars and TVs are cheaper but health insurance is insane.

We are incredibly frugal and savers and we had three years in a row with medical emergencies - we hit our OUT OF POCKET max two years in a row. Another year would have taken us perilously close to draining our non retirement "emergency" savings. Then our 12 year old fridge died, then our water heater leaked, then our cat got sick, then an ice storm put a tree through roof, now our 14 year old car is on it's last legs. It was a rough three years.

We are people that are not making "bad" choices and we feel impoverished all of the time. Because of our good habits I know that we'll be fine but I think if you compare "middle class" now to that of 25 years ago and then 50 years ago many people are not doing better.

I was discussing this with my grandparents a few months ago.  They know young people struggling to get by, but buying TV's and entertainment systems instead of saving money when they get gifts or tax returns.  They have 2 cars instead of 1 (but I live in a rural area and I'll be damned if a SAHP is going to be home with kids without a means of transport, so I'm a big supporter of 2 car families....anyway, tangent) and a few gadgets.  And I point out that yes, a TV is $500 once and that car is $125 month.  But they could save alllll that money and not come close to paying for health insurance if (one of) the parent(s) doesn't have a good deal with it at work.  Let alone if one of them also has student loan payments and didn't take the time to switch to a low payment plan or if the loans are private because they went to a technical training school.

If someone is already in debt and struggling to make ends meet then each additional dollar spent on non-essentials (TV, more car or house than is needed, eating out, etc.) adds to their financial crisis. It's one more dollar spent, perhaps on credit, that could have gone to paying down debt. I really don't understand the "I'm already struggling financially, so I'm just going to spend money 'cause it's small relative to my debts" point of view. While forgoing a TV purchase or a car on credit may not cover the cost of health insurance (though you might find that one of the subsidized ACA plans come close), using these savings to pay off debt improves their financial position slightly instead of making it worse. Do this consistently over a number of years and the crisis is eventually eliminated.

I know we're talking generalities here, and every situation is different, so I will have to rely on what I see anecdotally from millennial acquaintances who are struggling. What I've noticed is that, for them, the term "frugal" is fashionable - they talk about frugality and even shop at secondhand stores for retro finds. But most of them aren't really very frugal, which for them really means avoiding conspicuous consumption of luxury brands...they are frugal relative to the excesses displayed on TV shows, a pretty low bar. Those cool retro finds are often very expensive (because they are in demand). Although they aren't going to fancy restaurants they are eating out very frequently. They buy new cars. They have cable and premium cell phone plans. They travel! (nothing against travel, it's great, but it's expensive) They are prone to buying trinkets (Star Wars merchandise and other gimmicky things). In short, they could be saving a substantial amount of money every month, and this quickly adds up over time.

Now to be clear, I'm not saying this applies to everyone (or to people on this thread), just pointing out that for most people there is substantial room for improvement in their personal finances, and that's a Good Thing! It means they have some hope of control over the situation, which is empowering!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Miss Piggy on April 27, 2016, 10:14:03 AM
If someone is already in debt and struggling to make ends meet then each additional dollar spent on non-essentials (TV, more car or house than is needed, eating out, etc.) adds to their financial crisis. It's one more dollar spent, perhaps on credit, that could have gone to paying down debt. I really don't understand the "I'm already struggling financially, so I'm just going to spend money 'cause it's small relative to my debts" point of view.

I spent the weekend with a very good friend and her husband. Both are quite overweight; he is morbidly obese. I came home and talked to my husband about how amazed I was at how much this guy eats. I don't think he has any idea he eats so much more than the average person. I kind of equate this to what you said above, but it's more like "I'm already struggling with my weight, so I'll just eat a bit more...it won't make that much of a difference..."  That said, he's also talking about the possibility of gastric bypass, so he clearly knows he has a big issue and feels like he's in it so deep that he can't get out on his own.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Guses on April 27, 2016, 10:58:23 AM
Quote
In 1985, when a new car cost $15,000, college tuition at my state university was about 20% of that cost or $3,000.  In California, public university tuition was about 10% of that cost or $1,500 per year.  Private school tuition was even cheaper than a car - at about $8 or $9,000 per year.  Tuition was even cheaper in the 1960s and 1970s.  In the 60s, 70s and 80s, you could realistically flip burgers and make it through college without any debt.  From 1960-1990, there wasn't nearly as much credentialism that pigeon holes certain majors into certain jobs and mandates (via law or business practice) a diploma to even get an interview as there exists today.  If you borrowed money, you could work it off fairly easily even if you didn't use your degree for a job.  The car example is a good one to demonstrate the impact of higher education inflation on Millennials and Generation Z and how their debt burden is much more significant than previous generations.

Your car quote is WAY off base unless you are talking larger luxury cars.

The base price of a Honda Civic in 1985 was $5400

In 1992 I bought a used Escort for $6300.

While tuition has gone up, it is going to vary a lot on where you go:
1985:
Civic: $5400
Tuition at Penn State: $2555

1992:
Escort: $6300
Tuition: $4350

Today:
Civic: $18640
Tuition: $16570

So yes, Tuition has gone up since 1985 by a factor of 6.5
A civic has gone up by a factor of 3.4

(but the car's going to last longer)
Civic

1985:
Number of Channels on TV: 6
Cost of tuition: $2555

2016:
Number of Channels on TV: 600
Tuition: $16570

Channel inflation is 100 FOLD whereas tuition has only gone up by a factor of 6.

Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on April 27, 2016, 11:04:53 AM
Quote
I was discussing this with my grandparents a few months ago.  They know young people struggling to get by, but buying TV's and entertainment systems instead of saving money when they get gifts or tax returns.  They have 2 cars instead of 1 (but I live in a rural area and I'll be damned if a SAHP is going to be home with kids without a means of transport, so I'm a big supporter of 2 car families....anyway, tangent) and a few gadgets.  And I point out that yes, a TV is $500 once and that car is $125 month.  But they could save alllll that money and not come close to paying for health insurance if (one of) the parent(s) doesn't have a good deal with it at work.  Let alone if one of them also has student loan payments and didn't take the time to switch to a low payment plan or if the loans are private because they went to a technical training school.

Quote
Exactly! $500 didn't even cover my insurance premiums for the month, let alone deductible or out of pocket max (and that's not even counting out of network max - a separate, insane amount). I think a lot of people that pooh pooh young families' expenditures must get a great deal on insurance through their jobs. I know my in-laws and parents were both like that.

Or...they don't have insurance.  I did not have insurance as a child.  Like, ever.  For a large part of her life, my sister's family did not have insurance either.

Several of my friends right now are self-employed or work for small companies, and they don't have insurance either.  (Well, they might now, with ACA.)

In my family, you paid needs before wants.  So that means, we did not have cable TV or new cars or whatever.  You say "that's not enough for insurance" - that may be true.  And I think insurance is very important for many many people. 

However, my parents paid out of pocket.  Yes, we went to the dentist every year or two, not every 6 months.  Yes, that means our annual trips to the doctor were not annual.  (And that also means that the surgery I had at age 12, and ensuing 2 weeks in the hospital, were paid out of pocket, at $100 a month, for 5 years, plus whatever tax refunds we got).

"I can't afford it so I might as well not save for it" is pretty lame, in my opinion.  People locally complain about stuff like this all the time.
"I'll never afford a house" - so they buy a BMW SUV.
"I'll never afford health insurance" - so they have a iPhone on contract.

And yes, in many many cases, no amount of saving is going to buy you a house in Santa Barbara.  Just somewhere in the last few decades, we've lost the separation between "wants" and "needs".  I'm solidly middle class/ upper middle class now, and I'm quite surprised about the complaints about the cost of health insurance.

Even 14 years ago - our insurance was pretty cheap. But it started going up annually.  A little bit here and there, but people would complain about the co-pay, or about the premiums being all of $100 a month back then.  And in my experience, it was cheap!  I didn't have insurance at all until college, and then had a (glorious?) 5 years in the military.  Nobody wants to pay $25 for an annual checkup? 

I can understand the complaints when insurance premiums get to be thousands a month.  But people complain about the cost of insurance and/or health care even when it's not expensive.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Gondolin on April 27, 2016, 11:57:18 AM
Quote
Given a choice between a 50-year old with 30 years experience and a 30 year old with a degree?  80% of the time, that 50 year old's resume doesn't even make it to the hiring manager's desk. 

Yep - automated keyword screened resume intake systems are the worst thing to happen to the HR industry....ever.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on April 27, 2016, 12:03:17 PM
Insurance is really a crapshoot. A former employer's plan wasn't bad at all for an individual: $80/month. But for families it was insane. Self + Spouse + Children was minimum $800. This was an org where making 50K+ meant you were one of the higher paid employees! A lot of people were in the 35-40K range. 27% of gross income on health insurance is nuts IMO and would definitely reduce the ability to save. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Cassie on April 27, 2016, 12:07:05 PM
Health insurance has gotten out of control. Many people that have the ACA can't afford to use it with 6k or higher deductibles. Our health insurance through my former employer costs 10K/year since I retired. It is much cheaper for those still working. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 27, 2016, 12:10:27 PM
Insurance is really a crapshoot. A former employer's plan wasn't bad at all for an individual: $80/month. But for families it was insane. Self + Spouse + Children was minimum $800. This was an org where making 50K+ meant you were one of the higher paid employees! A lot of people were in the 35-40K range. 27% of gross income on health insurance is nuts IMO and would definitely reduce the ability to save.

At $40K income a family of 4 in my area can get a subsidized "silver" plan from Covered California (our ACA marketplace) for $159/month. Without the subsidy the price would be $821/month.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Apples on April 27, 2016, 12:34:25 PM
Quote
I was discussing this with my grandparents a few months ago.  They know young people struggling to get by, but buying TV's and entertainment systems instead of saving money when they get gifts or tax returns.  They have 2 cars instead of 1 (but I live in a rural area and I'll be damned if a SAHP is going to be home with kids without a means of transport, so I'm a big supporter of 2 car families....anyway, tangent) and a few gadgets.  And I point out that yes, a TV is $500 once and that car is $125 month.  But they could save alllll that money and not come close to paying for health insurance if (one of) the parent(s) doesn't have a good deal with it at work.  Let alone if one of them also has student loan payments and didn't take the time to switch to a low payment plan or if the loans are private because they went to a technical training school.

Quote
Exactly! $500 didn't even cover my insurance premiums for the month, let alone deductible or out of pocket max (and that's not even counting out of network max - a separate, insane amount). I think a lot of people that pooh pooh young families' expenditures must get a great deal on insurance through their jobs. I know my in-laws and parents were both like that.

Or...they don't have insurance.  I did not have insurance as a child.  Like, ever.  For a large part of her life, my sister's family did not have insurance either.

Several of my friends right now are self-employed or work for small companies, and they don't have insurance either.  (Well, they might now, with ACA.)

In my family, you paid needs before wants.  So that means, we did not have cable TV or new cars or whatever.  You say "that's not enough for insurance" - that may be true.  And I think insurance is very important for many many people. 

However, my parents paid out of pocket.  Yes, we went to the dentist every year or two, not every 6 months.  Yes, that means our annual trips to the doctor were not annual.  (And that also means that the surgery I had at age 12, and ensuing 2 weeks in the hospital, were paid out of pocket, at $100 a month, for 5 years, plus whatever tax refunds we got).

"I can't afford it so I might as well not save for it" is pretty lame, in my opinion.  People locally complain about stuff like this all the time.
"I'll never afford a house" - so they buy a BMW SUV.
"I'll never afford health insurance" - so they have a iPhone on contract.

And yes, in many many cases, no amount of saving is going to buy you a house in Santa Barbara.  Just somewhere in the last few decades, we've lost the separation between "wants" and "needs".  I'm solidly middle class/ upper middle class now, and I'm quite surprised about the complaints about the cost of health insurance.

Even 14 years ago - our insurance was pretty cheap. But it started going up annually.  A little bit here and there, but people would complain about the co-pay, or about the premiums being all of $100 a month back then.  And in my experience, it was cheap!  I didn't have insurance at all until college, and then had a (glorious?) 5 years in the military.  Nobody wants to pay $25 for an annual checkup? 

I can understand the complaints when insurance premiums get to be thousands a month.  But people complain about the cost of insurance and/or health care even when it's not expensive.

I agree with your sentiments.  I was mostly pointing out that for people who made upper middle class income (and the perks of those types of jobs, like good insurance) can see the TV purchase and think that "those poor people" are idiots.  The people I was sort-of defending/explaining about are the type who sound like your parents.  Health care is mostly out of pocket (though nowadays our state covers kids pretty well for low income families, thankfully), the co-pay on the insurance from work is high or they have to pay some sort of monthly premium for ACA, they own two beater cars, if they have a smart phone it's several years old, they have one possibly two televisions and whatever tv package allows them to watch the particular sports they're fond of*.  I live in a very LCOL area, very working class, so the purchases are more like 1 tv/gadget/couch/expensive thing per year.  And that purchase itself is usually less than health insurance for the year, or kid's activities for a few months, etc.  Many of these people I'm referring to cash their checks and might possibly have a single savings account.  Otherwise it's all cash, maybe one secured credit card. No vacations, or maybe 1 to go visit family.  The student loans are $10,000 or $12,000 usually after 18 months of technical school that didn't get them a very high-paying job.  The $500/year of a television or gadget will certainly speed up paying it off, but not so much so that maybe the TV is worth it for them anyway.  So this probably doesn't belong on a middle class thread, because they're the types to finance a SUV and take showy vacations usually, not the people I wrote about.  But all of them could do with a dash of financial responsibility sometimes! 

*About half the working class population around here hails from Central America.  The white guys in this situation just use the basic satellite package, and the hispanic guys get whatever gets them Telemundo.  That and beer seems to be their only indulgences in life on a frequent basis.

+1 to insurance craziness.  A lot of my coworkers make $30-$50k and it's not the monthly premium that gets them, it's the copay.  $30 for the doctor, $75 for ANY specialist**  $300 to show up in the ER because we live in the middle of nowhere and you injured yourself kinda badly on a Sunday.  Run 3 tests while you're there?  That's another $150-$240 depending on what tests they were.  That's all before the deductible.  My company uses an HRA and the employees only pay the first small portion of the deductible, then the employer reimburses them for costs after that.  They pay little in the way of monthly premiums, so if you're healthy it's really cheap insurance.  But I feel bad for the guys with kids from about 5-15 that have at least 1 get injured or a mystery illness 2-3 times a year.  This plan counts as a "silver" plan.

**My gyno is considered a "specialist" by my insurance, and my annual exam included that copay.  Which just felt wrong.  I called to try to find out why, and they reduced it to $60, which still seems wrong. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on April 27, 2016, 12:45:06 PM
Insurance is really a crapshoot. A former employer's plan wasn't bad at all for an individual: $80/month. But for families it was insane. Self + Spouse + Children was minimum $800. This was an org where making 50K+ meant you were one of the higher paid employees! A lot of people were in the 35-40K range. 27% of gross income on health insurance is nuts IMO and would definitely reduce the ability to save.

At $40K income a family of 4 in my area can get a subsidized "silver" plan from Covered California (our ACA marketplace) for $159/month. Without the subsidy the price would be $821/month.

My understanding is that if your employer offers coverage, then you qualify for 0 subsidies. So this hypothetical family is stuck paying $800+ no matter what avenue they choose.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 27, 2016, 12:57:48 PM
Insurance is really a crapshoot. A former employer's plan wasn't bad at all for an individual: $80/month. But for families it was insane. Self + Spouse + Children was minimum $800. This was an org where making 50K+ meant you were one of the higher paid employees! A lot of people were in the 35-40K range. 27% of gross income on health insurance is nuts IMO and would definitely reduce the ability to save.

At $40K income a family of 4 in my area can get a subsidized "silver" plan from Covered California (our ACA marketplace) for $159/month. Without the subsidy the price would be $821/month.

My understanding is that if your employer offers coverage, then you qualify for 0 subsidies. So this hypothetical family is stuck paying $800+ no matter what avenue they choose.

Wrong. The premiums from the employer must be considered affordable, which is defined as no more than 9.5% of annual income ($316/month for $40k income). Now this affordability test is only for what the premiums would cost the individual employee (not spouse or dependents). This discrepancy in the ACA subsidy eligibility test is known as the "family glitch" - some people will be hit by this, other won't. It depends on the details of each situation.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: StarBright on April 27, 2016, 02:05:48 PM

Wrong. The premiums from the employer must be considered affordable, which is defined as no more than 9.5% of annual income ($316/month for $40k income). Now this affordability test is only for what the premiums would cost the individual employee (not spouse or dependents). This discrepancy in the ACA subsidy eligibility test is known as the "family glitch" - some people will be hit by this, other won't. It depends on the details of each situation.

This is exactly the hole my family falls into - both my DH's and my employer offer affordable individual rates but costs for spousal and child coverage are above the "affordable" percentage.  I looked into it fairly extensively when the exchanges opened. We pay about the same for coverage now as we would unsubsidized on the open market. And even then, those silver plans tend to come with high-ish deductibles.

Going back round to the article that inspired this thread - Yes the guy made bad decision after bad decision, and while I appreciate his willingness to publicly discuss his problems I do not think he is a good example to illustrate the issue.

BUT - someone at the very beginning of the thread introduced the idea of "does the middle class today have a harder time" and that is how I've been framing this conversation since. I would agree with those that say the baseline existence is probably better than it was 30 or 50 years ago (better technology, health innovations etc). But then I diverge and come to this from a fairly personal place: I'm frugal and I was raised by parents who had the knowledge and took the effort to give me a strong financial background.  Because of this I have been making the "right" decisions since I was teenager and they have enabled me to weather financial storms in my 30s.

BUT, should you have to have an almost perfect record of "right" decisions just to not meet financial ruin? I think if you are putting 40-50 hour weeks of skilled/any labor and living like a moderately responsible citizen then you have earned the privilege of not facing a financially life ruining emergency (due to markets, health emergencies, weather, etc) - even if you have made some "wrong" choices in the past. 

I'd like to see some changes made to the current system to either give people a stronger safety net or help them not get in that situation in the first place. Some of these changes might be the following: being able to declare bankruptcy on student loans, subsidized healthcare, subsidized childcare, changing the exemptions on overtime for salaried employees (which I believe might actually be happening this year), bring back unions, raise the cap on social security, and on and on and on. A cocktail of some of these options might help - because I think the issue with the "Middle Class" is that life wouldn't be so bad if just some of these issues were a concern but for many people, all of them are.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Jesstache on April 27, 2016, 03:45:07 PM
A Facebook acquaintance of mine (a classmate of my older sister from High School) shared this article with the comment "#Truth"  She's 36 or so and is a single mother to a tween (which I am sure is financially difficult).  This is about 2 days after she posted a picture of an "Uber driver starter kit" with the comment, "Need to pay for daughter's braces and my nose job" 

.... wuuuut?

I guess at least she's not financing those things?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 27, 2016, 04:03:44 PM

Wrong. The premiums from the employer must be considered affordable, which is defined as no more than 9.5% of annual income ($316/month for $40k income). Now this affordability test is only for what the premiums would cost the individual employee (not spouse or dependents). This discrepancy in the ACA subsidy eligibility test is known as the "family glitch" - some people will be hit by this, other won't. It depends on the details of each situation.

This is exactly the hole my family falls into - both my DH's and my employer offer affordable individual rates but costs for spousal and child coverage are above the "affordable" percentage.  I looked into it fairly extensively when the exchanges opened. We pay about the same for coverage now as we would unsubsidized on the open market. And even then, those silver plans tend to come with high-ish deductibles.

Going back round to the article that inspired this thread - Yes the guy made bad decision after bad decision, and while I appreciate his willingness to publicly discuss his problems I do not think he is a good example to illustrate the issue.

BUT - someone at the very beginning of the thread introduced the idea of "does the middle class today have a harder time" and that is how I've been framing this conversation since. I would agree with those that say the baseline existence is probably better than it was 30 or 50 years ago (better technology, health innovations etc). But then I diverge and come to this from a fairly personal place: I'm frugal and I was raised by parents who had the knowledge and took the effort to give me a strong financial background.  Because of this I have been making the "right" decisions since I was teenager and they have enabled me to weather financial storms in my 30s.

BUT, should you have to have an almost perfect record of "right" decisions just to not meet financial ruin? I think if you are putting 40-50 hour weeks of skilled/any labor and living like a moderately responsible citizen then you have earned the privilege of not facing a financially life ruining emergency (due to markets, health emergencies, weather, etc) - even if you have made some "wrong" choices in the past. 

I'd like to see some changes made to the current system to either give people a stronger safety net or help them not get in that situation in the first place. Some of these changes might be the following: being able to declare bankruptcy on student loans, subsidized healthcare, subsidized childcare, changing the exemptions on overtime for salaried employees (which I believe might actually be happening this year), bring back unions, raise the cap on social security, and on and on and on. A cocktail of some of these options might help - because I think the issue with the "Middle Class" is that life wouldn't be so bad if just some of these issues were a concern but for many people, all of them are.

We should fix the family glitch because it is idiotic in that it's arbitrary and produces perverse outcomes.

That said, I'm not convinced about the other things you mention. The problem is that our society ALWAYS invents ways to create demand and absorb additional money. As long as people prioritize wants before needs they will always spend themselves into a hole, so this money will be used to increase consumption: a car that is bigger/more expensive than they would otherwise buy, or more house than they need, more clothes, and such.

Personal finance as similar to physical fitness. Most people don't pack on large amounts of weight over a short period of time and then suddenly wake up one day with metabolic syndrome. Instead, most people make a large number of small and seemingly inconsequential choices day-to-day that are unhealthy, putting on several pounds a year while remaining sedentary working in an office and watching TV. By middle age this catches up with people, at which point you start hearing things like "when you hit middle age your metabolism changes!" Uh, no it doesn't, you're just starting to notice the cumulative effects of your choices for the past 20 years. Personal finance is the same: $5 lattes, cars on credit, carrying debt, cable TV, over spending on food, not saving for retirement, or any number of other things discussed on this blog. Any one of these decisions, in isolation and at any single point in time, is relatively harmless. But do this over decades and before you know it your finances are a disaster.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: LiveLean on April 27, 2016, 04:19:44 PM
I have been a freelance writer since the end of 1998, when I left a full-time journalism job. My wife and I are a few years to FIRE. We're 47. Here's the difference.

1. NYC? Please. We're DC-area natives and saw the future. We moved to Florida a year before I went freelance. COL much lower, quality of life much higher.

2. Private schools? Get out of here. Our sons (10 and 13) go to public schools. Yes, in Florida.

3. Stanford or Emory? No way. Our guys will go to Florida public universities for little-to-no cost between Florida's pre-paid college tuition plan (which we bought years ago) and Bright Futures scholarships available to Florida kids on a sliding scale based on academic performance in high school.

4. Pay for weddings? Hell no. Yes, we have sons. But my old man refused to pay for my sisters' weddings. He thought it was part of being a grown-up, since he and my mom, at 29, paid for theirs (in 1968) and my sisters didn't marry until 34 and 38. I knew better than to ask if he wanted to chip in or host my rehearsal dinner.

I've written books, too, but I'm still waiting for Scorcese to call. Judging by his subject matter, he's earned a lot more in advance money than I have. I've worked in TV a bit, too, but not as a freakin' fill-in for Siskel and Ebert. My wife has not been a freakin' film executive, but a low-paid graphic designer, school teacher, and stay-at-home mom.

He's not in that situation because he chose to be a freelance writer. That's not in the top 10 of his bad decisions. Being a freelance writer is a blessing because the irregular income forces you to be Mustachian.

Or at least it should.

Title: Re: The Secret Shame of Middle-Class Americans
Post by: stoaX on April 27, 2016, 04:40:52 PM
I have been a freelance writer since the end of 1998, when I left a full-time journalism job. My wife and I are a few years to FIRE. We're 47. Here's the difference.

1. NYC? Please. We're DC-area natives and saw the future. We moved to Florida a year before I went freelance. COL much lower, quality of life much higher.

2. Private schools? Get out of here. Our sons (10 and 13) go to public schools. Yes, in Florida.

3. Stanford or Emory? No way. Our guys will go to Florida public universities for little-to-no cost between Florida's pre-paid college tuition plan (which we bought years ago) and Bright Futures scholarships available to Florida kids on a sliding scale based on academic performance in high school.

4. Pay for weddings? Hell no. Yes, we have sons. But my old man refused to pay for my sisters' weddings. He thought it was part of being a grown-up, since he and my mom, at 29, paid for theirs (in 1968) and my sisters didn't marry until 34 and 38. I knew better than to ask if he wanted to chip in or host my rehearsal dinner.

I've written books, too, but I'm still waiting for Scorcese to call. Judging by his subject matter, he's earned a lot more in advance money than I have. I've worked in TV a bit, too, but not as a freakin' fill-in for Siskel and Ebert. My wife has not been a freakin' film executive, but a low-paid graphic designer, school teacher, and stay-at-home mom.

He's not in that situation because he chose to be a freelance writer. That's not in the top 10 of his bad decisions. Being a freelance writer is a blessing because the irregular income forces you to be Mustachian.

Or at least it should.

+1
Title: Re: The Secret Shame of Middle-Class Americans
Post by: CNM on April 27, 2016, 04:50:05 PM

Wrong. The premiums from the employer must be considered affordable, which is defined as no more than 9.5% of annual income ($316/month for $40k income). Now this affordability test is only for what the premiums would cost the individual employee (not spouse or dependents). This discrepancy in the ACA subsidy eligibility test is known as the "family glitch" - some people will be hit by this, other won't. It depends on the details of each situation.

This is exactly the hole my family falls into - both my DH's and my employer offer affordable individual rates but costs for spousal and child coverage are above the "affordable" percentage.  I looked into it fairly extensively when the exchanges opened. We pay about the same for coverage now as we would unsubsidized on the open market. And even then, those silver plans tend to come with high-ish deductibles.

Going back round to the article that inspired this thread - Yes the guy made bad decision after bad decision, and while I appreciate his willingness to publicly discuss his problems I do not think he is a good example to illustrate the issue.

BUT - someone at the very beginning of the thread introduced the idea of "does the middle class today have a harder time" and that is how I've been framing this conversation since. I would agree with those that say the baseline existence is probably better than it was 30 or 50 years ago (better technology, health innovations etc). But then I diverge and come to this from a fairly personal place: I'm frugal and I was raised by parents who had the knowledge and took the effort to give me a strong financial background.  Because of this I have been making the "right" decisions since I was teenager and they have enabled me to weather financial storms in my 30s.

BUT, should you have to have an almost perfect record of "right" decisions just to not meet financial ruin? I think if you are putting 40-50 hour weeks of skilled/any labor and living like a moderately responsible citizen then you have earned the privilege of not facing a financially life ruining emergency (due to markets, health emergencies, weather, etc) - even if you have made some "wrong" choices in the past. 

I'd like to see some changes made to the current system to either give people a stronger safety net or help them not get in that situation in the first place. Some of these changes might be the following: being able to declare bankruptcy on student loans, subsidized healthcare, subsidized childcare, changing the exemptions on overtime for salaried employees (which I believe might actually be happening this year), bring back unions, raise the cap on social security, and on and on and on. A cocktail of some of these options might help - because I think the issue with the "Middle Class" is that life wouldn't be so bad if just some of these issues were a concern but for many people, all of them are.

Starbright, I agree with you that I think health care and long-term care in the US is WAY WAY too high.  And I agree that this needs to change.

However, the author did not have a simple mistake here or there.  A lot of people make a mistake and recover and are fine.  There are a lot of people on this forum (maybe even myself included!) who have crawled out of debt, are solvent, and even are able to accrue enough wealth despite early setbacks.  This is why this article is so frustrating.  It's probably true that wages have been stagnant and the cost of living is higher now than it was, but this guy is trying to use himself as an example.  THAT is the problem.  He is not a good example of this problem at all.  He just lived and continues to live too large.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: BTDretire on April 28, 2016, 01:05:20 PM

I'd like to see some changes made to the current system to either give people a stronger safety net or help them not get in that situation in the first place. Some of these changes might be the following: being able to declare bankruptcy on student loans,

 That is a free ticket to, borrow all you can, after you graduate, work a year at McDonalds,
go bankrupt and write off $200,000 of student loans. Might as well let Bernie give you *free education.

* free, meaning take money from hardworking taxpayers and give it to students.
Quote
subsidized healthcare,
Hmm, my unsubsidized non ACA family premium is $8500 a year, an ACA policy is $15,700
with a higher deductible, oh, but less then $7,000 with the *subsidy.

*Subsidy, meaning take money from hardworking taxpayers and give it to policy holders.
Quote
subsidized childcare,
* you get the drill. The money has to come from somewhere, and we have borrowed and borrowed and burrowed and burrowed ourselves deeper in debt.
Quote
changing the exemptions on overtime for salaried employees (which I believe might actually be happening this year),
uhm, may just lower their salary to start.
Quote

 bring back unions,
The unions kinda priced their worker out of jobs, especially in the auto industry.
Quote
raise the cap on social security,
In order to save SS, I'm for that, and reducing benefits, reducing COLA, and raising the retirement age.

Quote
and on and on and on. A cocktail of some of these options might help - because I think the issue with the "Middle Class" is that life wouldn't be so bad if just some of these issues were a concern but for many people, all of them are.
                                                   
Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on April 28, 2016, 03:04:10 PM

That is a free ticket to, borrow all you can, after you graduate, work a year at McDonalds,
go bankrupt and write off $200,000 of student loans. Might as well let Bernie give you *free education.

Or not. You could make SL debt dischargable with conditions. Probably how it was for decades until bankers bribed Congress. Even now, something like 40% of people who include SL in their bankruptcy get some or all of it discharged. The problem is that people buy into the myth that it is NEVER going to go away and don't even try.


* free, meaning take money from hardworking taxpayers and give it to students.

What are your thoughts on public school? The government takes money from hardworking taxpayers and GIVES it to young immature citizens for 12 years!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Jack on April 28, 2016, 03:34:02 PM

I'd like to see some changes made to the current system to either give people a stronger safety net or help them not get in that situation in the first place. Some of these changes might be the following: being able to declare bankruptcy on student loans,

 That is a free ticket to, borrow all you can, after you graduate, work a year at McDonalds,
go bankrupt and write off $200,000 of student loans. Might as well let Bernie give you *free education.

So? Maybe then the lenders would learn to vet their borrowers better! And if that makes student loans less available, then that's good too because then colleges would learn that they need to be cost-competitive instead of just riding the free-money gravy train.

It's all upside!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on April 28, 2016, 03:35:24 PM
Quote
"when you hit middle age your metabolism changes!" Uh, no it doesn't, you're just starting to notice the cumulative effects of your choices for the past 20 years.

Um, no, it totally does change!  Even those of us who manage to stay in shape for the 20 years notice it!

Gosh it makes me worry for menopause (aka "later middle age").
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 28, 2016, 03:42:36 PM
What are your thoughts on public school? The government takes money from hardworking taxpayers and GIVES it to young immature citizens for 12 years!

You mean the public schools that consistently rank near the bottom in OECD rankings, those schools? Where about 19% of high school graduates are illiterate? The ones designed to prepare our children to be factory workers in a country with few factory jobs? Where children are generally forced into districts based on where they happen to live and have little choice to switch to a better school? Yes, those are the schools my taxes have paid for for decades now. Since I have little hope of recovering what I've paid into these, now that my kids are approaching school age I'll take some vouchers for private schools or homeschooling please!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on April 28, 2016, 03:51:56 PM
Quote
"when you hit middle age your metabolism changes!" Uh, no it doesn't, you're just starting to notice the cumulative effects of your choices for the past 20 years.

Um, no, it totally does change!  Even those of us who manage to stay in shape for the 20 years notice it!

Gosh it makes me worry for menopause (aka "later middle age").

Of course we slow down with age, but this is gradual process and not a discrete function as some people describe it. About 5 years ago I hit the wall of cumulative effects I described above. I was working too much, not watching my diet, and getting zero exercise. My first instinct was to assume it was because I was getting older, but after some searching/reading I concluded there was hope. It took about 3-4 years of lifestyle change, but it has been worth it. Way more energy now, better sleep, feel so much better all around.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: wenchsenior on April 28, 2016, 05:32:40 PM
Quote
"when you hit middle age your metabolism changes!" Uh, no it doesn't, you're just starting to notice the cumulative effects of your choices for the past 20 years.

Um, no, it totally does change!  Even those of us who manage to stay in shape for the 20 years notice it!

Gosh it makes me worry for menopause (aka "later middle age").

Of course we slow down with age, but this is gradual process and not a discrete function as some people describe it. About 5 years ago I hit the wall of cumulative effects I described above. I was working too much, not watching my diet, and getting zero exercise. My first instinct was to assume it was because I was getting older, but after some searching/reading I concluded there was hope. It took about 3-4 years of lifestyle change, but it has been worth it. Way more energy now, better sleep, feel so much better all around.

I really think this 'change' is pretty individual...at 45 and 54, my husband and I haven't yet encountered it. The only thing that's changed is it's easier to get injured, harder to bounce back from injury, and a little harder to maintain muscle (though my weeny body has NEVER been good at that, even as a kid).
Title: Re: The Secret Shame of Middle-Class Americans
Post by: StarBright on April 28, 2016, 07:45:36 PM

I'd like to see some changes made to the current system to either give people a stronger safety net or help them not get in that situation in the first place. Some of these changes might be the following: being able to declare bankruptcy on student loans, subsidized healthcare, subsidized childcare, changing the exemptions on overtime for salaried employees (which I believe might actually be happening this year), bring back unions, raise the cap on social security, and on and on and on. A cocktail of some of these options might help - because I think the issue with the "Middle Class" is that life wouldn't be so bad if just some of these issues were a concern but for many people, all of them are.

That said, I'm not convinced about the other things you mention. The problem is that our society ALWAYS invents ways to create demand and absorb additional money. As long as people prioritize wants before needs they will always spend themselves into a hole, so this money will be used to increase consumption: a car that is bigger/more expensive than they would otherwise buy, or more house than they need, more clothes, and such.


Honestly, I'm not totally sold on my own suggestions either (purely from a funding/taxation standpoint) But I do think if the definition of middle class is white collar or unionized blue collar jobs that allow people to afford a house in the burbs and a little extra time and money and a non-impoverished retirement, and we want to have a large middle class in our country, then systemically we can't keep on the way we are currently going. I think the extra time is a really important factor in defining middle class.

I admit, I'm coming at it from a really personal place. I used to advocate more of a bootstraps mentality but a case of life threatening pancreatitis, an emergency appendectomy w/ complications and and ice storm showed me how easily we could be financially wiped out. And I walked away from that not thinking, "well at least I was a saver all of those years and I'm okay." but "I've been a great saver all of these years and if I could be ruined, how is someone who hasn't had the same advantages even making it?"

Lots of good conversation here and I appreciate everyone's thoughts and insight.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: RosieTR on April 29, 2016, 06:05:31 PM
The stats are there. This is one guy's story of how he fits into them, and there are millions of others. Probably a few made a lot of mistakes, like him, some made just a few mistakes but were on the edge, and this pushed them over, while a smaller proportion had a lot of really, really bad luck. Still, I appreciated the glimpse onto one person's life who fits the shocking stats. I know a few people IRL that have variations but it would be a bit socially awkward to get the level of detail here.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FireLane on May 01, 2016, 04:24:09 PM
A lot of people in this thread have mentioned that health-care insurance costs have gone way up compared to previous generations, and that's true. But one important thing to remember is that the variety of treatments available has also gone way up. Our parents and grandparents spent less on health care not because it was intrinsically cheaper back then, but just because there was less health care to buy. Doctors can cure or treat a lot of conditions that were untreatable a few decades ago. There are hundreds of new drugs, operations and tests that didn't always exist.

That's not to deny that most of our health care spending goes to lifestyle diseases that could be avoided if people led healthier, more Mustachian lives. But this is another example of how we should bear in mind that our lives are hugely better if only we take a step back and look at history. Would you want to be limited to the medicine of a hundred years ago, or even just fifty years ago?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Ellabean on May 02, 2016, 09:19:06 AM

If my husband and I are doing twice the "work" for the same amount of comfort I'd say that we are worse off. On top of that, my father had a 40 hour a week job, with a few busy weeks a year. Hubs and I are both working 50 hours a week regularly with many weeks requiring more.

Yes childcare is outsourced 7 hours a day but cooking and cleaning and life management are still handled by us (which would have been handled by my stay at home mother).
 
It's definitely more effort than my parents were putting in at the same age.
[/quote]

This. One reason why people go out to eat so much and spend so much on "luxuries" like instant food is because both parents are working full-time plus commuting and picking their kids up from daycare. I'm not saying it's impossible, but it takes a lot of planning and hard work  to meal-plan for the week, prep for tomorrow night's meal, clean up everything from the day, pack lunch for the kids and ourselves, do laundry, minimally clean the house, and get organized to go to work. All of that unseen, unrewarded work that Marx called "reproductive labor"-- labor that is required for us to go on living. We still have to do it, and now we're both working full-time.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: JLee on May 02, 2016, 10:27:35 AM
This. One reason why people go out to eat so much and spend so much on "luxuries" like instant food is because both parents are working full-time plus commuting and picking their kids up from daycare. I'm not saying it's impossible, but it takes a lot of planning and hard work  to meal-plan for the week, prep for tomorrow night's meal, clean up everything from the day, pack lunch for the kids and ourselves, do laundry, minimally clean the house, and get organized to go to work. All of that unseen, unrewarded work that Marx called "reproductive labor"-- labor that is required for us to go on living. We still have to do it, and now we're both working full-time.

I don't even have kids (or pets) and I've noticed that it's far more difficult to make my own food when my work schedule goes insane. Working on-call nights/weekends can completely destroy my good habits of making lunches/etc...
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mizzourah2006 on May 02, 2016, 11:07:42 AM
Quote
In 1985, when a new car cost $15,000, college tuition at my state university was about 20% of that cost or $3,000.  In California, public university tuition was about 10% of that cost or $1,500 per year.  Private school tuition was even cheaper than a car - at about $8 or $9,000 per year.  Tuition was even cheaper in the 1960s and 1970s.  In the 60s, 70s and 80s, you could realistically flip burgers and make it through college without any debt.  From 1960-1990, there wasn't nearly as much credentialism that pigeon holes certain majors into certain jobs and mandates (via law or business practice) a diploma to even get an interview as there exists today.  If you borrowed money, you could work it off fairly easily even if you didn't use your degree for a job.  The car example is a good one to demonstrate the impact of higher education inflation on Millennials and Generation Z and how their debt burden is much more significant than previous generations.

Your car quote is WAY off base unless you are talking larger luxury cars.

The base price of a Honda Civic in 1985 was $5400

In 1992 I bought a used Escort for $6300.

While tuition has gone up, it is going to vary a lot on where you go:
1985:
Civic: $5400
Tuition at Penn State: $2555

1992:
Escort: $6300
Tuition: $4350

Today:
Civic: $18640
Tuition: $16570

So yes, Tuition has gone up since 1985 by a factor of 6.5
A civic has gone up by a factor of 3.4

(but the car's going to last longer)
Civic

Man, that's really high for tuition at a state school. My alma mater's in-state tuition price is $10,586. The way I see it if you go in-state to most state schools for 2 years after spending 2 years at a CC you can still get a college degree for under $30k.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TRBeck on May 02, 2016, 12:48:23 PM
This. One reason why people go out to eat so much and spend so much on "luxuries" like instant food is because both parents are working full-time plus commuting and picking their kids up from daycare. I'm not saying it's impossible, but it takes a lot of planning and hard work  to meal-plan for the week, prep for tomorrow night's meal, clean up everything from the day, pack lunch for the kids and ourselves, do laundry, minimally clean the house, and get organized to go to work. All of that unseen, unrewarded work that Marx called "reproductive labor"-- labor that is required for us to go on living. We still have to do it, and now we're both working full-time.

I don't even have kids (or pets) and I've noticed that it's far more difficult to make my own food when my work schedule goes insane. Working on-call nights/weekends can completely destroy my good habits of making lunches/etc...
My wife and I have 10-minute commutes and our two kids are in only one after-school activity each. We do well as far as getting housework and yard work done, and we do a ton of cooking and food prep - bake our own bread, scratch-made dinners most nights, and making/packing the kids' lunches daily - but can't squeeze one extra thing into the daily routine as it stands now. Doctors' appointments, staying late at work, and other little things can throw off the delicate balance dramatically. I can't imagine having more kids, longer work hours, longer commutes, a bigger house, a bigger yard, etc., and keeping up with everything. We could certainly live on one income, but it would be tough to save much. We put away pretty much all of the second salary. Whether this means we have it tougher than the previous generation I can't say, but I do think it's tough to maximize efficiency when both spouses are working.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on May 02, 2016, 03:40:51 PM
Quote
This. One reason why people go out to eat so much and spend so much on "luxuries" like instant food is because both parents are working full-time plus commuting and picking their kids up from daycare. I'm not saying it's impossible, but it takes a lot of planning and hard work  to meal-plan for the week, prep for tomorrow night's meal, clean up everything from the day, pack lunch for the kids and ourselves, do laundry, minimally clean the house, and get organized to go to work. All of that unseen, unrewarded work that Marx called "reproductive labor"-- labor that is required for us to go on living. We still have to do it, and now we're both working full-time.

Yes, it's a struggle.  We manage it (though we do have a cleaning person every 2 weeks, sorry not sorry!).

It's hard to explain if you aren't in the thick of it, because it's easy to forget.  I've got 2 kids, and only one is school-aged, and in a sport, and man, the scheduling!  Figuring out meal plans based on what day is practice, what day is a game (not the same days every week).

Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on May 02, 2016, 03:47:35 PM
What are your thoughts on public school? The government takes money from hardworking taxpayers and GIVES it to young immature citizens for 12 years!

You mean the public schools that consistently rank near the bottom in OECD rankings, those schools? Where about 19% of high school graduates are illiterate? The ones designed to prepare our children to be factory workers in a country with few factory jobs? Where children are generally forced into districts based on where they happen to live and have little choice to switch to a better school? Yes, those are the schools my taxes have paid for for decades now. Since I have little hope of recovering what I've paid into these, now that my kids are approaching school age I'll take some vouchers for private schools or homeschooling please!
This is interesting because I have a school-aged child.  And being involved in the school over the last few years makes me wonder how to fix things.  I'm an engineer, so I like experimentation and data.  But I think data-driven answers at school often fail, because it's simply test scores.

In my area, the difference between a failing school and a succeeding school is nothing more than how white the students are.  Our public schools aren't trying to train people to work in factories.  They are pushing college, to families who wouldn't have the first idea how to pay for it or what to major in. What a joke.

So what the answer other than white flight?  I don't really know.  The fact of the matter is, my son is getting a fine education in a failing school.  For lack of a better empirical measure, the white kids at our school score as well as the students at the rich school a half mile down the road.

And how to fix the illiteracy?  Advancing students has been happening forever.  My 70 year old step dad graduated from HS and couldn't read.  My son has kids in his 4th grade class who can't do 1st grade math.  Who decides to advance the kids?

From what I can see, our schools and our teachers are doing their very best with what they have - increasing enrollments, increasing # of kids who: don't speak English, are poor, have parents in jail, are homeless.  I can't imagine how easy it is to teach to my 10 year old who can read and do math at the 8th grade level, along with kids barely at 1st grade level, who don't speak English.  Or are borderline disabled.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Cassie on May 02, 2016, 03:53:25 PM
One way to prevent eating out a lot is to have some easy things in the freezer and just pop them in the oven. I also used to make breakfast for dinner 1 night a week and the kids loved it. Even though easy stuff costs more (convenience food) is still cheaper then eating out.  My kids are long grown but it is hard with both working and have to make dinner, etc after getting home. It can all feel like a blur.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: SwordGuy on May 02, 2016, 06:45:18 PM
Quote
This. One reason why people go out to eat so much and spend so much on "luxuries" like instant food is because both parents are working full-time plus commuting and picking their kids up from daycare. I'm not saying it's impossible, but it takes a lot of planning and hard work  to meal-plan for the week, prep for tomorrow night's meal, clean up everything from the day, pack lunch for the kids and ourselves, do laundry, minimally clean the house, and get organized to go to work. All of that unseen, unrewarded work that Marx called "reproductive labor"-- labor that is required for us to go on living. We still have to do it, and now we're both working full-time.

Yes, it's a struggle.  We manage it (though we do have a cleaning person every 2 weeks, sorry not sorry!).

It's hard to explain if you aren't in the thick of it, because it's easy to forget.  I've got 2 kids, and only one is school-aged, and in a sport, and man, the scheduling!  Figuring out meal plans based on what day is practice, what day is a game (not the same days every week).

Why don't you buy your kid a bike and let them bike to practices and local games?

That will take a load off of you.

FYI - you don't have to be at every game...   They just need to know you really care and are interested.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 02, 2016, 09:35:20 PM
What are your thoughts on public school? The government takes money from hardworking taxpayers and GIVES it to young immature citizens for 12 years!

You mean the public schools that consistently rank near the bottom in OECD rankings, those schools? Where about 19% of high school graduates are illiterate? The ones designed to prepare our children to be factory workers in a country with few factory jobs? Where children are generally forced into districts based on where they happen to live and have little choice to switch to a better school? Yes, those are the schools my taxes have paid for for decades now. Since I have little hope of recovering what I've paid into these, now that my kids are approaching school age I'll take some vouchers for private schools or homeschooling please!
This is interesting because I have a school-aged child.  And being involved in the school over the last few years makes me wonder how to fix things.  I'm an engineer, so I like experimentation and data.  But I think data-driven answers at school often fail, because it's simply test scores.

In my area, the difference between a failing school and a succeeding school is nothing more than how white the students are.  Our public schools aren't trying to train people to work in factories.  They are pushing college, to families who wouldn't have the first idea how to pay for it or what to major in. What a joke.

So what the answer other than white flight?  I don't really know.  The fact of the matter is, my son is getting a fine education in a failing school.  For lack of a better empirical measure, the white kids at our school score as well as the students at the rich school a half mile down the road.

And how to fix the illiteracy?  Advancing students has been happening forever.  My 70 year old step dad graduated from HS and couldn't read.  My son has kids in his 4th grade class who can't do 1st grade math.  Who decides to advance the kids?

From what I can see, our schools and our teachers are doing their very best with what they have - increasing enrollments, increasing # of kids who: don't speak English, are poor, have parents in jail, are homeless.  I can't imagine how easy it is to teach to my 10 year old who can read and do math at the 8th grade level, along with kids barely at 1st grade level, who don't speak English.  Or are borderline disabled.

There are schools with low test scores, and then there are truly terrible schools. If a school has a low rating but is otherwise functional then I think it's still very possible to get a good education since it's largely a function effort invested. My wife taught K at a school like this before we FIREd. The students were poor and mostly non-white, but they and their families valued education and were motivated to learn. So although they did not test well because of ESL issues, they still made rapid progress.

I, on the other hand, had the misfortune of attending a truly terrible school for my Jr High years. The school had low test scores, but it was also totally mismanaged and there were serious behavioral issues. Lots of fights, kids bringing drugs and weapons to school, and so on. The administration basically shrugged their shoulders and looked the other way. It's nearly impossible to learn after being knocked down a few levels on Maslow's hierarchy and having to worry about physical safety. This school district did not have funds for basic essentials like books or teaching supplies, but they managed to spend hundreds of thousands of dollars redoing the sports field, which then had to be redone within a year because they did it incorrectly. This same district had another several hundred thousand dollars vanish from its accounts without any accounting or audit trail (we still don't know what happened to it). It also spent millions on the construction of a new middle school only to get shut down in the early phases of construction because they didn't pull any permits or do any of the EIR work. Turns out the area is not buildable because it's sensitive habitat. I did not grow up rich, but I begged my parents to send me to a local private school for high school, which they did at great sacrifice. The private school was not prestigious, it's tuition was about 2/3 of what the state paid per student to public schools, yet the experience and quality of education were far superior.

My kids are about to enter school and the public schools in our district are excellent (affluent neighborhood, lots of support from the PTA). We have people moving to our town for no other reason than the schools, and I personally know of several cases where people have falsified their address to get in. This entire setup is absurd. Why should something as arbitrary as location dictate what school a kid attends? The wealthy have the option of moving, or sending their kids to private schools. The poor should not be condemned to a failed education because they have no other choice. This issue for me is one of social justice - each kid who would otherwise be a good student but cannot learn because of a dysfunctional environment, is a tragedy. It's a personal tragedy for the life they could have had, and it's a tragedy for society because that person was not able to achieve their full potential. Vouchers would at least (largely) equalize educational opportunities for motivated students/families of all income levels.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on May 02, 2016, 10:26:29 PM
Why should something as arbitrary as location dictate what school a kid attends? The wealthy have the option of moving, or sending their kids to private schools. The poor should not be condemned to a failed education because they have no other choice. This issue for me is one of social justice - each kid who would otherwise be a good student but cannot learn because of a dysfunctional environment, is a tragedy. It's a personal tragedy for the life they could have had, and it's a tragedy for society because that person was not able to achieve their full potential. Vouchers would at least (largely) equalize educational opportunities for motivated students/families of all income levels.

I think vouchers end up basically covering up the real problem. The reason for vouchers is that the school district I live in sucks, so I should be able to use the money the state would pay to that shitty district and use it for the school I want. Sounds fair enough.

But the shitty school district still exists and gets worse and worse since the only parents using vouchers are ones who care at least a little bit about their kids' educations. The students with parents who couldn't care less are left at schools receiving less and less funding.

Students without much opportunity are then surrounded by students without much opportunity. That can't be good for economic mobility. I suspect that most poor kids and young adults who "make it" can look back and think of a best friend who encouraged college, a supervisor at an early job who took an interest, etc. This social capital is under appreciated IMO.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on May 03, 2016, 05:39:58 AM
The stats are there. This is one guy's story of how he fits into them, and there are millions of others. Probably a few made a lot of mistakes, like him, some made just a few mistakes but were on the edge, and this pushed them over, while a smaller proportion had a lot of really, really bad luck. Still, I appreciated the glimpse onto one person's life who fits the shocking stats. I know a few people IRL that have variations but it would be a bit socially awkward to get the level of detail here.

It's very interesting to see the cherry picking of statistics on this thread.  There is an affordability crisis brewing in the United States.  The popularity of both Donald Trump and Bernie Sanders is strong evidence that middle class Americans are fed up with the current economic system because they can't maintain previous lifestyles and, at the same time, help their children climb the economic ladder.  Yes, nipping around the edges of the middle class's personal financial situations would help a bit but real (and realistic) systemic change will be necessary to restore the economic security that Americans have known over the last 50 years years and expect from their government and economy.  Below are some of the macro-economic issues (I'm sure I'm missing some) that are driving American economic insecurity.  Because we have not properly and pro-actively addressed these rotten macro-economic statistics, these issues will fuel American politics until they are properly fixed on a macro-economic level.  Telling Americans to adjust their expectations down on the American dream or that the American dream was a myth is not a recipe for winning elections.  Also, shaming the individual for arguably poor financial choices will become more and more resented by middle class Americans who don't want to have to choose between saving for retirement AND living in a safe neighborhood with good schools for the benefit of their children.  This type of "Catch 22" argument worked very well with seniors who - because of the nation's health care system in the 1990s - had to make a choice between food and medications.  This tidal wave is coming.  The current status quo will likely change to address the macro-economic issues raised in this article.

Middle Class Wages are stagnant: http://fivethirtyeight.com/features/the-american-middle-class-hasnt-gotten-a-raise-in-15-years/

Health care costs are increasing: http://www.npr.org/2016/05/03/476517927/politics-in-real-life-rising-health-care-costs-weigh-on-voters

Child care costs are increasing: http://www.huffingtonpost.com/2013/11/05/child-care-costs_n_4215659.html

Tuition is increasing (since 1978, it is up1,120%): http://www.usatoday.com/story/money/personalfinance/2014/11/08/credit-dotcom-tuition/18417721/

Regressive taxation is increasing: http://www.usatoday.com/story/money/personalfinance/2015/02/15/247-wall-st-worst-taxes-average-earners/23361553/

Governmental fees and fines are increasing: http://thinkprogress.org/justice/2012/08/22/725811/fees-fines-and-debt-how-governments-and-companies-are-jailing-poor-people-to-make-a-buck/ and http://www.governing.com/topics/public-justice-safety/gov-ferguson-missouri-court-fines-budget.html

Retirement savings are non-existent for 1/3 of Americans: http://www.usatoday.com/story/money/personalfinance/2014/03/18/retirement-confidence-survey-savings/6432241/

Middle class Americans have only about $20K saved for retirment: http://time.com/3536683/retirement-savings-middle-class/

Business group's fiercely lobby against opt out (and mandatory) retirement savings plans making structural change even more difficult: http://www.chicagomag.com/city-life/January-2015/Illinois-Gets-the-Nations-First-Automatic-Retirement-Program/ and http://www.ibtimes.com/middle-class-americans-living-regret-about-retirement-savings-1710270

Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on May 03, 2016, 05:46:56 AM
The average student loan debt load now stands at about $35,000. That's the price of a new mid-sized car. Has this gone up in recent years? Yes. Is it the end of the world? No, it's doable. This can be paid off by working a few years full time wil living as cheap as possible. Also, that's the average amount owed. The median among borrows is closer to $15,000 because there's a small percentage of borrowers skewing the results on the high end, so for the majority of college students their loan burden is really very manageable.

The previous posters say that the cost of a mid-size car is now about $18-19,000.  You are off by a lot here.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metric Mouse on May 03, 2016, 05:55:37 AM
The stats are there. This is one guy's story of how he fits into them, and there are millions of others. Probably a few made a lot of mistakes, like him, some made just a few mistakes but were on the edge, and this pushed them over, while a smaller proportion had a lot of really, really bad luck. Still, I appreciated the glimpse onto one person's life who fits the shocking stats. I know a few people IRL that have variations but it would be a bit socially awkward to get the level of detail here.

It's very interesting to see the cherry picking of statistics on this thread.  There is an affordability crisis brewing in the United States.  The popularity of both Donald Trump and Bernie Sanders is strong evidence that middle class Americans are fed up with the current economic system because they can't maintain previous lifestyles and, at the same time, help their children climb the economic ladder.  Yes, nipping around the edges of the middle class's personal financial situations would help a bit but real (and realistic) systemic change will be necessary to restore the economic security that Americans have known over the last 50 years years and expect from their government and economy.  Below are some of the macro-economic issues (I'm sure I'm missing some) that are driving American economic insecurity.  Because we have not properly and pro-actively addressed these rotten macro-economic statistics, these issues will fuel American politics until they are properly fixed on a macro-economic level.  Telling Americans to adjust their expectations down on the American dream or that the American dream was a myth is not a recipe for winning elections.  Also, shaming the individual for arguably poor financial choices will become more and more resented by middle class Americans who don't want to have to choose between saving for retirement AND living in a safe neighborhood with good schools for the benefit of their children.  This type of "Catch 22" argument worked very well with seniors who - because of the nation's health care system in the 1990s - had to make a choice between food and medications.  This tidal wave is coming.  The current status quo will likely change to address the macro-economic issues raised in this article.

Middle Class Wages are stagnant: http://fivethirtyeight.com/features/the-american-middle-class-hasnt-gotten-a-raise-in-15-years/

Health care costs are increasing: http://www.npr.org/2016/05/03/476517927/politics-in-real-life-rising-health-care-costs-weigh-on-voters

Child care costs are increasing: http://www.huffingtonpost.com/2013/11/05/child-care-costs_n_4215659.html

Tuition is increasing (since 1978, it is up1,120%): http://www.usatoday.com/story/money/personalfinance/2014/11/08/credit-dotcom-tuition/18417721/

Regressive taxation is increasing: http://www.usatoday.com/story/money/personalfinance/2015/02/15/247-wall-st-worst-taxes-average-earners/23361553/

Governmental fees and fines are increasing: http://thinkprogress.org/justice/2012/08/22/725811/fees-fines-and-debt-how-governments-and-companies-are-jailing-poor-people-to-make-a-buck/ and http://www.governing.com/topics/public-justice-safety/gov-ferguson-missouri-court-fines-budget.html

Retirement savings are non-existent for 1/3 of Americans: http://www.usatoday.com/story/money/personalfinance/2014/03/18/retirement-confidence-survey-savings/6432241/

Middle class Americans have only about $20K saved for retirment: http://time.com/3536683/retirement-savings-middle-class/

Business group's fiercely lobby against opt out (and mandatory) retirement savings plans making structural change even more difficult: http://www.chicagomag.com/city-life/January-2015/Illinois-Gets-the-Nations-First-Automatic-Retirement-Program/ and http://www.ibtimes.com/middle-class-americans-living-regret-about-retirement-savings-1710270

Quite right! One should be allowed to make as many poor decisions as possible with no shaming or repercussions. It's disgraceful.  And really, no one should have to choose between a luxury SUV, a beach side vacation home, an ivy league education, yearly international vacations AND saving for retirement. I mean, I'm middle class! I should have all of those things! 'Murica!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on May 03, 2016, 05:58:30 AM
Quote
In 1985, when a new car cost $15,000, college tuition at my state university was about 20% of that cost or $3,000.  In California, public university tuition was about 10% of that cost or $1,500 per year.  Private school tuition was even cheaper than a car - at about $8 or $9,000 per year.  Tuition was even cheaper in the 1960s and 1970s.  In the 60s, 70s and 80s, you could realistically flip burgers and make it through college without any debt.  From 1960-1990, there wasn't nearly as much credentialism that pigeon holes certain majors into certain jobs and mandates (via law or business practice) a diploma to even get an interview as there exists today.  If you borrowed money, you could work it off fairly easily even if you didn't use your degree for a job.  The car example is a good one to demonstrate the impact of higher education inflation on Millennials and Generation Z and how their debt burden is much more significant than previous generations.

Your car quote is WAY off base unless you are talking larger luxury cars.

The base price of a Honda Civic in 1985 was $5400

In 1992 I bought a used Escort for $6300.

While tuition has gone up, it is going to vary a lot on where you go:
1985:
Civic: $5400
Tuition at Penn State: $2555

1992:
Escort: $6300
Tuition: $4350

Today:
Civic: $18640
Tuition: $16570

So yes, Tuition has gone up since 1985 by a factor of 6.5
A civic has gone up by a factor of 3.4

(but the car's going to last longer)
Civic

Man, that's really high for tuition at a state school. My alma mater's in-state tuition price is $10,586. The way I see it if you go in-state to most state schools for 2 years after spending 2 years at a CC you can still get a college degree for under $30k.

A little perspective on car and tuition costs from the New York Times: "If over the past three decades car prices had gone up as fast as tuition, the average new car would cost more than $80,000."

http://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html?_r=0
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on May 03, 2016, 06:02:23 AM
The stats are there. This is one guy's story of how he fits into them, and there are millions of others. Probably a few made a lot of mistakes, like him, some made just a few mistakes but were on the edge, and this pushed them over, while a smaller proportion had a lot of really, really bad luck. Still, I appreciated the glimpse onto one person's life who fits the shocking stats. I know a few people IRL that have variations but it would be a bit socially awkward to get the level of detail here.

It's very interesting to see the cherry picking of statistics on this thread.  There is an affordability crisis brewing in the United States.  The popularity of both Donald Trump and Bernie Sanders is strong evidence that middle class Americans are fed up with the current economic system because they can't maintain previous lifestyles and, at the same time, help their children climb the economic ladder.  Yes, nipping around the edges of the middle class's personal financial situations would help a bit but real (and realistic) systemic change will be necessary to restore the economic security that Americans have known over the last 50 years years and expect from their government and economy.  Below are some of the macro-economic issues (I'm sure I'm missing some) that are driving American economic insecurity.  Because we have not properly and pro-actively addressed these rotten macro-economic statistics, these issues will fuel American politics until they are properly fixed on a macro-economic level.  Telling Americans to adjust their expectations down on the American dream or that the American dream was a myth is not a recipe for winning elections.  Also, shaming the individual for arguably poor financial choices will become more and more resented by middle class Americans who don't want to have to choose between saving for retirement AND living in a safe neighborhood with good schools for the benefit of their children.  This type of "Catch 22" argument worked very well with seniors who - because of the nation's health care system in the 1990s - had to make a choice between food and medications.  This tidal wave is coming.  The current status quo will likely change to address the macro-economic issues raised in this article.

Middle Class Wages are stagnant: http://fivethirtyeight.com/features/the-american-middle-class-hasnt-gotten-a-raise-in-15-years/

Health care costs are increasing: http://www.npr.org/2016/05/03/476517927/politics-in-real-life-rising-health-care-costs-weigh-on-voters

Child care costs are increasing: http://www.huffingtonpost.com/2013/11/05/child-care-costs_n_4215659.html

Tuition is increasing (since 1978, it is up1,120%): http://www.usatoday.com/story/money/personalfinance/2014/11/08/credit-dotcom-tuition/18417721/

Regressive taxation is increasing: http://www.usatoday.com/story/money/personalfinance/2015/02/15/247-wall-st-worst-taxes-average-earners/23361553/

Governmental fees and fines are increasing: http://thinkprogress.org/justice/2012/08/22/725811/fees-fines-and-debt-how-governments-and-companies-are-jailing-poor-people-to-make-a-buck/ and http://www.governing.com/topics/public-justice-safety/gov-ferguson-missouri-court-fines-budget.html

Retirement savings are non-existent for 1/3 of Americans: http://www.usatoday.com/story/money/personalfinance/2014/03/18/retirement-confidence-survey-savings/6432241/

Middle class Americans have only about $20K saved for retirment: http://time.com/3536683/retirement-savings-middle-class/

Business group's fiercely lobby against opt out (and mandatory) retirement savings plans making structural change even more difficult: http://www.chicagomag.com/city-life/January-2015/Illinois-Gets-the-Nations-First-Automatic-Retirement-Program/ and http://www.ibtimes.com/middle-class-americans-living-regret-about-retirement-savings-1710270

Quite right! One should be allowed to make as many poor decisions as possible with no shaming or repercussions. It's disgraceful.  And really, no one should have to choose between a luxury SUV, a beach side vacation home, an ivy league education, yearly international vacations AND saving for retirement. I mean, I'm middle class! I should have all of those things! 'Murica!

Were you Bobby Jindal's campaign manager?  Rather than deriding the middle class for making bad financial decisions (or in many cases, not making perfect financial decisions), maybe you can spend some time thinking about ways to conduct a very serious public financial education campaign that harshly derides consumerism, credit card use and current advertising and reality TV practices so the middle class has a fighting chance of making this rigged system work for them?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metric Mouse on May 03, 2016, 06:27:13 AM
Quite right! One should be allowed to make as many poor decisions as possible with no shaming or repercussions. It's disgraceful.  And really, no one should have to choose between a luxury SUV, a beach side vacation home, an ivy league education, yearly international vacations AND saving for retirement. I mean, I'm middle class! I should have all of those things! 'Murica!

Were you Bobby Jindal's campaign manager?  Rather than deriding the middle class for making bad financial decisions (or in many cases, not making perfect financial decisions), maybe you can spend some time thinking about ways to conduct a very serious public financial education campaign that harshly derides consumerism, credit card use and current advertising and reality TV practices so the middle class has a fighting chance of making this rigged system work for them?

I've got no issues with their decisions. They made them, they are more than welcome to live with the consequences. They can even whine about how they couldn't possibly save for retirement while making boat payments.  If the American Dream is to be in debt up to one's eyballs, just like one's parents were, it isn't that hard to accomplish these days. Infact, I'd say it's easier than ever.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: StarBright on May 03, 2016, 06:53:03 AM
  Also, shaming the individual for arguably poor financial choices will become more and more resented by middle class Americans who don't want to have to choose between saving for retirement AND living in a safe neighborhood with good schools for the benefit of their children.  This type of "Catch 22" argument worked very well with seniors who - because of the nation's health care system in the 1990s - had to make a choice between food and medications.  This tidal wave is coming.  The current status quo will likely change to address the macro-economic issues raised in this article.


+1 to all of your excellent points - but especially the above. I was trying to express this in my posts but you did it so succinctly and well! (and then you provided stats and links - yay!)
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ooeei on May 03, 2016, 06:55:59 AM
My parents' first house in the 80's when they were in their late 20's was a little 2 bedroom craphole that my dad had to re-wire himself because it was dangerous to live in otherwise.  They both had college degrees and had been in the working world for 4-5 years.  I know people in their 20's today who whine about their 3-4 bedroom houses not having the right countertops or bathroom layouts. 

The problem I as a 27 year old see, is a lot of people in my age group remember what their parents had when they were kids (the parents were probably in their 40's) and expect to emulate that instantly after leaving home/college.  That is their "baseline" and they only expect to go up from there.  Eating at restaurants or driving new cars on long commutes are also huge money sink that most people don't even notice.  How is paying someone else to make your food for you considered a standard middle class thing?  That's freakin royalty status, yet I know people whose ovens are never used.

This certainly isn't everyone, but it's very frustrating to see. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on May 03, 2016, 09:17:20 AM
Quote
This. One reason why people go out to eat so much and spend so much on "luxuries" like instant food is because both parents are working full-time plus commuting and picking their kids up from daycare. I'm not saying it's impossible, but it takes a lot of planning and hard work  to meal-plan for the week, prep for tomorrow night's meal, clean up everything from the day, pack lunch for the kids and ourselves, do laundry, minimally clean the house, and get organized to go to work. All of that unseen, unrewarded work that Marx called "reproductive labor"-- labor that is required for us to go on living. We still have to do it, and now we're both working full-time.

Yes, it's a struggle.  We manage it (though we do have a cleaning person every 2 weeks, sorry not sorry!).

It's hard to explain if you aren't in the thick of it, because it's easy to forget.  I've got 2 kids, and only one is school-aged, and in a sport, and man, the scheduling!  Figuring out meal plans based on what day is practice, what day is a game (not the same days every week).

Why don't you buy your kid a bike and let them bike to practices and local games?

That will take a load off of you.

FYI - you don't have to be at every game...   They just need to know you really care and are interested.
He has a bike, but the games aren't close by and drivers are crazy.  And he's not allowed to leave the elementary school grounds without a parent to sign him out. (not until he's 12, which is another 2 years).

I don't actually go to every game.  The mid-week games I drop him off and then get the toddler and go home and make dinner.  My husband picks him up after he eats dinner.

We've been getting lucky a few weeks in a row that his mid-week practice has been Thursday, at a different park right next to where his music practice is (on the same day!)  So we tell him "When you get out of music practice, just walk across the field to baseball!  But change into baseball clothing in the junior high school bathroom NOT the public park bathroom" (too many homeless).  So he gets bussed to music class from the school, then goes to baseball, then we got pick him up after.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 03, 2016, 10:02:15 AM
Why should something as arbitrary as location dictate what school a kid attends? The wealthy have the option of moving, or sending their kids to private schools. The poor should not be condemned to a failed education because they have no other choice. This issue for me is one of social justice - each kid who would otherwise be a good student but cannot learn because of a dysfunctional environment, is a tragedy. It's a personal tragedy for the life they could have had, and it's a tragedy for society because that person was not able to achieve their full potential. Vouchers would at least (largely) equalize educational opportunities for motivated students/families of all income levels.

I think vouchers end up basically covering up the real problem. The reason for vouchers is that the school district I live in sucks, so I should be able to use the money the state would pay to that shitty district and use it for the school I want. Sounds fair enough.

But the shitty school district still exists and gets worse and worse since the only parents using vouchers are ones who care at least a little bit about their kids' educations. The students with parents who couldn't care less are left at schools receiving less and less funding.

Students without much opportunity are then surrounded by students without much opportunity. That can't be good for economic mobility. I suspect that most poor kids and young adults who "make it" can look back and think of a best friend who encouraged college, a supervisor at an early job who took an interest, etc. This social capital is under appreciated IMO.

I ask that you take a moment to put yourself in the shoes of a student stuck at a terrible school who values education and is motivated to learn. Why should you be forced to stay in a dysfunctional environment just for the sake of propping up the average? Your wealthier peers are either home schooled (they can live on one income), or they go to private school, or they moved to a better neighborhood. You, on the other hand, are poor so you don't have options. So you struggle to learn while being surrounded by people who don't care, and the deck is stacked against you. Your values place you in the minority and single you out as a 'nerd' so it's not like you're influential among your peers. I find this extremely unjust.

Vouchers don't fix everything. They certainly don't address the problem of students/parents who don't value education. But they equalize opportunity for the most disadvantaged who do value education. It's highly inconsistent that, in every other context, education decisions are primarily driven by what is best for the individual needs of a student. Only in the case of poorly performing schools do we say that it is the duty of good students, those who are too poor to have other options, to stay put for the sake of a community that does not value education. These poor students didn't create the problem, why should it be their burden to fix it, especially since they are the least equipped to solve the problem?

Forcing poor students to stay in poorly performing schools is classist, a form of economic redlining.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: MoneyCat on May 03, 2016, 10:08:06 AM
My wife and I both work long hours (11-12 hour days are typical) and when we get home we cook our meals and clean our house. That leave us maybe an hour or two for watching TV or something except for the weekends. Luckily, we don't have children or it would be impossible. I completely understand how families fall into the trap of ordering takeout every night, hiring cleaning companies and landscapers, paying ridiculous amounts for day care services, etc. It would be so much simpler just having one person work and the other person stay home and take care of the house. However, our world has changed and that's usually not something available to most families anymore.

That being said, if people want to be successful financially, they need to suck it up and put in the long hours. Otherwise, they are just delaying the financial pain.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: jinga nation on May 03, 2016, 10:09:57 AM
My parents' first house in the 80's when they were in their late 20's was a little 2 bedroom craphole that my dad had to re-wire himself because it was dangerous to live in otherwise.  They both had college degrees and had been in the working world for 4-5 years.  I know people in their 20's today who whine about their 3-4 bedroom houses not having the right countertops or bathroom layouts. 

The problem I as a 27 year old see, is a lot of people in my age group remember what their parents had when they were kids (the parents were probably in their 40's) and expect to emulate that instantly after leaving home/college.  That is their "baseline" and they only expect to go up from there.  Eating at restaurants or driving new cars on long commutes are also huge money sink that most people don't even notice.  How is paying someone else to make your food for you considered a standard middle class thing?  That's freakin royalty status, yet I know people whose ovens are never used.

This certainly isn't everyone, but it's very frustrating to see.

+1 on the Baseline Inflation. I've been saying this for a few years to family, friends, and coworkers. Only the savvy get it.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on May 03, 2016, 10:11:38 AM
Why should something as arbitrary as location dictate what school a kid attends? The wealthy have the option of moving, or sending their kids to private schools. The poor should not be condemned to a failed education because they have no other choice. This issue for me is one of social justice - each kid who would otherwise be a good student but cannot learn because of a dysfunctional environment, is a tragedy. It's a personal tragedy for the life they could have had, and it's a tragedy for society because that person was not able to achieve their full potential. Vouchers would at least (largely) equalize educational opportunities for motivated students/families of all income levels.

I think vouchers end up basically covering up the real problem. The reason for vouchers is that the school district I live in sucks, so I should be able to use the money the state would pay to that shitty district and use it for the school I want. Sounds fair enough.

But the shitty school district still exists and gets worse and worse since the only parents using vouchers are ones who care at least a little bit about their kids' educations. The students with parents who couldn't care less are left at schools receiving less and less funding.

Students without much opportunity are then surrounded by students without much opportunity. That can't be good for economic mobility. I suspect that most poor kids and young adults who "make it" can look back and think of a best friend who encouraged college, a supervisor at an early job who took an interest, etc. This social capital is under appreciated IMO.

 Why should you be forced to stay in a dysfunctional environment just for the sake of propping up the average? Your wealthier peers are either home schooled (they can live on one income), or they go to private school, or they moved to a better neighborhood. You, on the other hand, are poor so you don't have options. So you struggle to learn while being surrounded by people who don't care, and the deck is stacked against you. Your values place you in the minority and single you out as a 'nerd' so it's not like you're influential among your peers. I find this extremely unjust.

I knew that was coming and I don't really expect people to "sacrifice" their children for the good of others'. Vouchers seem like a quick dose of morphine though. The pain goes away, but the underlying problem is still there. The issue is that we have entire school districts that suck so bad to need vouchers in the first place.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 03, 2016, 10:50:32 AM
Why should something as arbitrary as location dictate what school a kid attends? The wealthy have the option of moving, or sending their kids to private schools. The poor should not be condemned to a failed education because they have no other choice. This issue for me is one of social justice - each kid who would otherwise be a good student but cannot learn because of a dysfunctional environment, is a tragedy. It's a personal tragedy for the life they could have had, and it's a tragedy for society because that person was not able to achieve their full potential. Vouchers would at least (largely) equalize educational opportunities for motivated students/families of all income levels.

I think vouchers end up basically covering up the real problem. The reason for vouchers is that the school district I live in sucks, so I should be able to use the money the state would pay to that shitty district and use it for the school I want. Sounds fair enough.

But the shitty school district still exists and gets worse and worse since the only parents using vouchers are ones who care at least a little bit about their kids' educations. The students with parents who couldn't care less are left at schools receiving less and less funding.

Students without much opportunity are then surrounded by students without much opportunity. That can't be good for economic mobility. I suspect that most poor kids and young adults who "make it" can look back and think of a best friend who encouraged college, a supervisor at an early job who took an interest, etc. This social capital is under appreciated IMO.

 Why should you be forced to stay in a dysfunctional environment just for the sake of propping up the average? Your wealthier peers are either home schooled (they can live on one income), or they go to private school, or they moved to a better neighborhood. You, on the other hand, are poor so you don't have options. So you struggle to learn while being surrounded by people who don't care, and the deck is stacked against you. Your values place you in the minority and single you out as a 'nerd' so it's not like you're influential among your peers. I find this extremely unjust.

I knew that was coming and I don't really expect people to "sacrifice" their children for the good of others'. Vouchers seem like a quick dose of morphine though. The pain goes away, but the underlying problem is still there. The issue is that we have entire school districts that suck so bad to need vouchers in the first place.

Except that morphine is not a good analogy in this case. Morphine provides short-term relief whereas vouchers allow good students to attend good schools, and this provides a life-long benefit to them and to society. Ideally vouchers would not be needed, but after decades of experimentation to fix the problem, nothing has improved. In the meantime poor students should not bear the cost of poorly managed districts, the human cost is too high.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Ellabean on May 03, 2016, 11:30:19 AM
I agree that vouchers don't help the kids who need them the most-- the poorest kids and/or the ones with checked-out/overworked parents. Vouchers also don't solve the issue of location and busing-- how are the kids going to get to the good schools? And who pays for that in time/money?

The problem with our schools is that too large a percentage comes from real estate taxes... and parents propping up schools through donations to the PTO/PTA (though of course I'm paying higher city taxes and making donations to my PTA-- this is where politics collides with the personal). Our schools are inherently un-equal. And as others have said, a culture of disengagement from school (fights, etc.) harms all students.

And with regard to the other conversation, yes, we make poor financial choices because we are ignorant. I had no idea what I was signing on for with my student loans-- it seemed like free money. Now I wish I could talk some sense into my past self. It seemed perfectly normal to accept loan money and go out to eat all the time. Alas. Now I'm paying for it... with interest! (bada-bing!)

We also live in a consumerist culture where we are bombarded with ads suggesting that our worth as human beings depends on the crap we buy. You can resist, but you have to go against the neighbors, the TV (low information diet to the rescue!), and what most people model. My neighbors live in a house that costs 3 times what our house did and just leased a brand new car with two miles on it (literally). I know that this is not the financial behavior I want to emulate... but it is easy to drool over her car and enormous house. I know, I know, I'm not supposed to covet shit. And I'm thankful that I have this community to model different norms and remind me why I don't want that lifestyle and to be proud of frugality and aim to be more frugal (one day I would love to bike to work... to live close enough to bike to work!)




Title: Re: The Secret Shame of Middle-Class Americans
Post by: Jack on May 03, 2016, 11:51:06 AM
I agree that vouchers don't help the kids who need them the most-- the poorest kids and/or the ones with checked-out/overworked parents. Vouchers also don't solve the issue of location and busing-- how are the kids going to get to the good schools? And who pays for that in time/money?

The problem with our schools is that too large a percentage comes from real estate taxes... and parents propping up schools through donations to the PTO/PTA (though of course I'm paying higher city taxes and making donations to my PTA-- this is where politics collides with the personal). Our schools are inherently un-equal. And as others have said, a culture of disengagement from school (fights, etc.) harms all students.

You can't really say if that's actually the problem without first figuring out whether the lack of achievement is due to lack of funding or some other cause (e.g. bad parenting). I don't know what the cause really is (for example, I don't trust the Heritage Foundation (http://www.heritage.org/research/reports/2008/09/does-spending-more-on-education-improve-academic-achievement) to be impartial), but I think it's safe to say that there's disagreement about it.

I think it is at least possible that, instead of increasing funding for schools in poor areas, it might be better to (for example) keep the funding the same but turn them into boarding schools (even though the money spent on instruction would decrease because of the costs to house the students).
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on May 03, 2016, 12:07:30 PM
I agree that vouchers don't help the kids who need them the most-- the poorest kids and/or the ones with checked-out/overworked parents. Vouchers also don't solve the issue of location and busing-- how are the kids going to get to the good schools? And who pays for that in time/money?

The problem with our schools is that too large a percentage comes from real estate taxes... and parents propping up schools through donations to the PTO/PTA (though of course I'm paying higher city taxes and making donations to my PTA-- this is where politics collides with the personal). Our schools are inherently un-equal. And as others have said, a culture of disengagement from school (fights, etc.) harms all students.

You can't really say if that's actually the problem without first figuring out whether the lack of achievement is due to lack of funding or some other cause (e.g. bad parenting). I don't know what the cause really is (for example, I don't trust the Heritage Foundation (http://www.heritage.org/research/reports/2008/09/does-spending-more-on-education-improve-academic-achievement) to be impartial), but I think it's safe to say that there's disagreement about it.

I think it is at least possible that, instead of increasing funding for schools in poor areas, it might be better to (for example) keep the funding the same but turn them into boarding schools (even though the money spent on instruction would decrease because of the costs to house the students).
The problem is that lack of achievement = a lot of reasons.  All types of individual reasons.  The old principal at our school could NOT figure out why we had such a problem with absenteeism.  I suggested that she do a statistical analysis (heck, I could have done it for her, just if she had given me student #'s not names). 

- Do we have a lot of offenders, or a few people who offend a lot?
- Is it mostly the 55% of the kids who are bussed?  Or the other kids?
- How do the worst offenders get to school?  If their parents drive them, can they carpool?  Do they miss on certain days?

Some of these kids are homeless.  Living in cars.
Some of them have parents who work until 3 am.  Good luck having them get up to get you to the bus stop by 7 am.
There's a kid in my son's class who has been "fragile" lately.  The teacher and my spouse (who volunteers at the classroom), have noticed it.  Well, his dad is either just out of jail or back in jail, not sure which.  I mean, no wonder.  Poor kid.

Some of it is cultural.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on May 04, 2016, 05:45:17 AM
Why should something as arbitrary as location dictate what school a kid attends? The wealthy have the option of moving, or sending their kids to private schools. The poor should not be condemned to a failed education because they have no other choice. This issue for me is one of social justice - each kid who would otherwise be a good student but cannot learn because of a dysfunctional environment, is a tragedy. It's a personal tragedy for the life they could have had, and it's a tragedy for society because that person was not able to achieve their full potential. Vouchers would at least (largely) equalize educational opportunities for motivated students/families of all income levels.

I think vouchers end up basically covering up the real problem. The reason for vouchers is that the school district I live in sucks, so I should be able to use the money the state would pay to that shitty district and use it for the school I want. Sounds fair enough.

But the shitty school district still exists and gets worse and worse since the only parents using vouchers are ones who care at least a little bit about their kids' educations. The students with parents who couldn't care less are left at schools receiving less and less funding.

Students without much opportunity are then surrounded by students without much opportunity. That can't be good for economic mobility. I suspect that most poor kids and young adults who "make it" can look back and think of a best friend who encouraged college, a supervisor at an early job who took an interest, etc. This social capital is under appreciated IMO.

 Why should you be forced to stay in a dysfunctional environment just for the sake of propping up the average? Your wealthier peers are either home schooled (they can live on one income), or they go to private school, or they moved to a better neighborhood. You, on the other hand, are poor so you don't have options. So you struggle to learn while being surrounded by people who don't care, and the deck is stacked against you. Your values place you in the minority and single you out as a 'nerd' so it's not like you're influential among your peers. I find this extremely unjust.

I knew that was coming and I don't really expect people to "sacrifice" their children for the good of others'. Vouchers seem like a quick dose of morphine though. The pain goes away, but the underlying problem is still there. The issue is that we have entire school districts that suck so bad to need vouchers in the first place.

Except that morphine is not a good analogy in this case. Morphine provides short-term relief whereas vouchers allow good students to attend good schools, and this provides a life-long benefit to them and to society. Ideally vouchers would not be needed, but after decades of experimentation to fix the problem, nothing has improved. In the meantime poor students should not bear the cost of poorly managed districts, the human cost is too high.

It seems to me that vouchers allow "good" students to flee perceived "bad" schools and spend money on private or religious schools or transfer to "good" public schools within the same school district.  Vouchers seem like the kind of fix that has the potential to erode public education in many poor communities if the voucher systems is not implemented properly.  The real problem is how public education is funded in the United States.  Property taxes pay a large portion of K-12 public education in the United States.  Even though every school district takes state money, they limit enrollment to their geographical boundaries which coincide with the property taxing district.  I might be for a voucher system if students were allowed to transfer (with busing) from any urban or suburban district to any urban or suburban district.  This would allow for much greater diversity in both urban and suburban schools which is greatly lacking now.  If this type of broad freedom to transfer is denied students in a voucher system, then I think it's better to focus on fixing the current system rather than complaining about it.  As a result, I think vouchers are bad because they create larger problems by concentrating the "bad" kids all in "bad" schools that will serve as a breeding ground for all kinds of bad problems.  As another poster suggested, and if we can't get a regional school choice voucher system, it is much better policy to use resources to simply make the "bad" schools better so the "good" students don't want to leave their neighborhood school.  Running away from problems never fixes problems although moving from a "bad" public school district to a "good" public school district would help solve some short term problems that your own children might be experiencing rather than staying put and hoping to use a voucher to pay for a private or religious school or transferring to a different public school within the same school district.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on May 04, 2016, 06:05:46 AM
Quite right! One should be allowed to make as many poor decisions as possible with no shaming or repercussions. It's disgraceful.  And really, no one should have to choose between a luxury SUV, a beach side vacation home, an ivy league education, yearly international vacations AND saving for retirement. I mean, I'm middle class! I should have all of those things! 'Murica!

Were you Bobby Jindal's campaign manager?  Rather than deriding the middle class for making bad financial decisions (or in many cases, not making perfect financial decisions), maybe you can spend some time thinking about ways to conduct a very serious public financial education campaign that harshly derides consumerism, credit card use and current advertising and reality TV practices so the middle class has a fighting chance of making this rigged system work for them?

I've got no issues with their decisions. They made them, they are more than welcome to live with the consequences. They can even whine about how they couldn't possibly save for retirement while making boat payments.  If the American Dream is to be in debt up to one's eyballs, just like one's parents were, it isn't that hard to accomplish these days. Infact, I'd say it's easier than ever.

I don't understand why you would be okay with a system so broken that a majority of Americans think the system is rigged against them to cause them to fail?  The DIY retirement system is an absolute disaster.  I'm not sure why anyone backing the status quo - especially on this site - would oppose a vigorous MMM face punch style public education campaign on over-spending, debt, emergency fund, college and retirement saving, etc. that would properly attack the root causes of individuals making dumb short and long term financial decisions?  Is it because business owners fear that middle class workers might discover that they can't live in a decent K-12 school district AND save for retirement and college on the wages and benefits they are earning now?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ender on May 04, 2016, 06:12:47 AM
I don't understand why you would be okay with a system so broken that a majority of Americans think the system is rigged against them to fail?  The DIY retirement system is an absolute disaster.  I'm not sure why anyone backing the status quo - especially on this site - would oppose a vigorous MMM face punch style public education campaign on over-spending, debt, emergency fund, college and retirement saving, etc. that would properly attack the root causes of individuals making dumb short and long term financial decisions?

For most folks, information is not the problem. Most people know they "should" save for retirement (particularly the middle class that the original quote was referring to). And even if it is, billions upon billions get spent every year convincing people they need X and must buy it.

But think about how many people smoke. Or are alcoholics. Information is normally not the primary problem - behavior change is hard, in general.

The problem is most people expect to have everything. They want their cake, they want to eat it, they want to take loans out against future cakes, and then they want to be guaranteed that future cake. And when people act in this way, what do you expect them to think? Clearly they will think the system is rigged against them.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on May 04, 2016, 06:22:13 AM
I don't understand why you would be okay with a system so broken that a majority of Americans think the system is rigged against them to fail?  The DIY retirement system is an absolute disaster.  I'm not sure why anyone backing the status quo - especially on this site - would oppose a vigorous MMM face punch style public education campaign on over-spending, debt, emergency fund, college and retirement saving, etc. that would properly attack the root causes of individuals making dumb short and long term financial decisions?

For most folks, information is not the problem. Most people know they "should" save for retirement (particularly the middle class that the original quote was referring to). And even if it is, billions upon billions get spent every year convincing people they need X and must buy it.

But think about how many people smoke. Or are alcoholics. Information is normally not the primary problem - behavior change is hard, in general.

The problem is most people expect to have everything. They want their cake, they want to eat it, they want to take loans out against future cakes, and then they want to be guaranteed that future cake. And when people act in this way, what do you expect them to think? Clearly they will think the system is rigged against them.

I think how the information is presented is a problem.  For example, if, after a public education campaign, the general public were to perceive an urban or suburban F-150 driver as a wasteful idiot (as many of us do on this site) rather than an urban cowboy, then attitudes and behaviors would change.  In our DIY retirement system, not aggressively educating those making less money (and who cannot afford to make mistakes in managing their money starting in their twenties) and don't come from financially sophisticated, white collar backgrounds, is really rigging the system against them.  As you can see with the Trump and Sanders vote totals, the middle class is rejecting the United states current economic model because they don't believe they have a fighting chance.  Running away from giving them the tools to make the system work only reinforces the notion that the US economic system is rigged against the middle class.

With regard to retirement savings, an opt out or mandatory system would help solve this problem.  Not saving for your retirement in your twenties is very normal for most people.  The United States' current system fails to take that into account.  Many business leaders oppose this change in the system.  How can a system work if it ignores basic human nature?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: infogoon on May 04, 2016, 09:42:42 AM
Except that morphine is not a good analogy in this case. Morphine provides short-term relief whereas vouchers allow good students to attend good schools, and this provides a life-long benefit to them and to society. Ideally vouchers would not be needed, but after decades of experimentation to fix the problem, nothing has improved. In the meantime poor students should not bear the cost of poorly managed districts, the human cost is too high.

Wouldn't vouchers just lead to the same sort of problems that "free money" loans did in secondary education?

If every poor kid in Buffalo got a tuition voucher for $20k/year, all that would do is make the private schools raise their tuition by $20k/year. The same students would attend, the parents would pay the same amount out of pocket. Meanwhile, for-profit K-12 companies would spring up to offer new schools with terrible education but really impressive computer labs and athletic programs.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: shelivesthedream on May 04, 2016, 10:06:41 AM
My parents' first house in the 80's when they were in their late 20's was a little 2 bedroom craphole that my dad had to re-wire himself because it was dangerous to live in otherwise.  They both had college degrees and had been in the working world for 4-5 years.  I know people in their 20's today who whine about their 3-4 bedroom houses not having the right countertops or bathroom layouts. 

The problem I as a 27 year old see, is a lot of people in my age group remember what their parents had when they were kids (the parents were probably in their 40's) and expect to emulate that instantly after leaving home/college.  That is their "baseline" and they only expect to go up from there.  Eating at restaurants or driving new cars on long commutes are also huge money sink that most people don't even notice.  How is paying someone else to make your food for you considered a standard middle class thing?  That's freakin royalty status, yet I know people whose ovens are never used.

This certainly isn't everyone, but it's very frustrating to see.

+1 on the Baseline Inflation. I've been saying this for a few years to family, friends, and coworkers. Only the savvy get it.

Argh! I wrote a really long post about this put it didn't post, so here's the short version.

Is the 'problem' that people are having children later? Assuming everyone's life generally goes like this:

Early twenties: cockroach infested basement
Late twenties: no cockroaches but no luxuries
Early thirties: first 'family home'
Late thirties: interest in landscaping and granite countertops

If you have children in your early twenties then they'll mostly remember "no cockroaches" and the big deal that was moving into "first family home". Late twenties, it's "first family home" and the upgrades that came through landscaping and granite countertops. Early thirties and all they'll remember is the landscaping and granite countertops.

My parents had me and my brother in their mid to late thirties and we moved into "big forever family home" when I was five so that's all I remember. I am aware that we lived in a small house for five whole years of my life but that's not really a part of my experience. And my parents have mentioned crappy places they lived earlier in life but obviously I've never seen them and they've never gone into detail. My whole conception of "how people live" (in the sense that children can only extrapolate to generalities from what they know) was based on "big forever family home". How can it be any different for children who are born when their parents are in their thirties?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ooeei on May 04, 2016, 12:14:58 PM
My parents' first house in the 80's when they were in their late 20's was a little 2 bedroom craphole that my dad had to re-wire himself because it was dangerous to live in otherwise.  They both had college degrees and had been in the working world for 4-5 years.  I know people in their 20's today who whine about their 3-4 bedroom houses not having the right countertops or bathroom layouts. 

The problem I as a 27 year old see, is a lot of people in my age group remember what their parents had when they were kids (the parents were probably in their 40's) and expect to emulate that instantly after leaving home/college.  That is their "baseline" and they only expect to go up from there.  Eating at restaurants or driving new cars on long commutes are also huge money sink that most people don't even notice.  How is paying someone else to make your food for you considered a standard middle class thing?  That's freakin royalty status, yet I know people whose ovens are never used.

This certainly isn't everyone, but it's very frustrating to see.

+1 on the Baseline Inflation. I've been saying this for a few years to family, friends, and coworkers. Only the savvy get it.

Argh! I wrote a really long post about this put it didn't post, so here's the short version.

Is the 'problem' that people are having children later? Assuming everyone's life generally goes like this:

Early twenties: cockroach infested basement
Late twenties: no cockroaches but no luxuries
Early thirties: first 'family home'
Late thirties: interest in landscaping and granite countertops

If you have children in your early twenties then they'll mostly remember "no cockroaches" and the big deal that was moving into "first family home". Late twenties, it's "first family home" and the upgrades that came through landscaping and granite countertops. Early thirties and all they'll remember is the landscaping and granite countertops.

My parents had me and my brother in their mid to late thirties and we moved into "big forever family home" when I was five so that's all I remember. I am aware that we lived in a small house for five whole years of my life but that's not really a part of my experience. And my parents have mentioned crappy places they lived earlier in life but obviously I've never seen them and they've never gone into detail. My whole conception of "how people live" (in the sense that children can only extrapolate to generalities from what they know) was based on "big forever family home". How can it be any different for children who are born when their parents are in their thirties?

Everyone thinks they should be doing better than their parents (up, up, up!), and easy credit makes it possible, temporarily. 

I think another part of it is parents shielding their kids from crappy sacrifices they have to make, or at the least downplaying them.  Nobody tells their 5 year old "Daddy's working this weekend because he took out too much of a loan for his new car, so he can't quit his job even though his boss is a complete asshole."
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ShoulderThingThatGoesUp on May 04, 2016, 12:25:52 PM
I don't think real estate tax bases are the real problem. The local horrible, unsafe urban district spends on the high end per student compared with nearby districts that are among the best in the state. Baltimore spends $15,287 per student every year. Newark, NJ spends $23,946. Throwing more money at it is not a fix.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: pachnik on May 04, 2016, 12:36:13 PM
Everyone thinks they should be doing better than their parents (up, up, up!), and easy credit makes it possible, temporarily. 

I think another part of it is parents shielding their kids from crappy sacrifices they have to make, or at the least downplaying them.  Nobody tells their 5 year old "Daddy's working this weekend because he took out too much of a loan for his new car, so he can't quit his job even though his boss is a complete asshole."

I think this assumption about everyone thinking they should be doing better than their parents is unrealistic (in my opinion).  It is also something that is very rarely questioned.  Of course, it would be nice if every generation did better than the previous one but I don't think this is economically possible.  Things can't always be on an upswing.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: stoaX on May 04, 2016, 01:29:48 PM
I don't think real estate tax bases are the real problem. The local horrible, unsafe urban district spends on the high end per student compared with nearby districts that are among the best in the state. Baltimore spends $15,287 per student every year. Newark, NJ spends $23,946. Throwing more money at it is not a fix.

Agreed - my tale of 3 school districts confirms this.  I sent my kids to school in 3 different school districts over the years.  One school district had property taxes of $1000 per year, the other two cost me about $5000 per year.  One of the $5000 per year districts was the best, the $1000 district was a close second.  The other $5000 district was the worst.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: rosaz on May 04, 2016, 01:37:15 PM
The problem with our schools is that too large a percentage comes from real estate taxes... Our schools are inherently un-equal.

I think the idea that failing schools are failing because they spend less per student is a misconception (generally - of course there will be exceptions). In Massachusetts at least, some of the worst school districts spend far more money than the statewide average - and the best school districts frequently spend average or less.

That's not to say that more money wouldn't help these schools, but if we ever did go to just a statewide tax funding for the schools, a lot of our urban schools would be worse off.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 04, 2016, 03:03:47 PM
Except that morphine is not a good analogy in this case. Morphine provides short-term relief whereas vouchers allow good students to attend good schools, and this provides a life-long benefit to them and to society. Ideally vouchers would not be needed, but after decades of experimentation to fix the problem, nothing has improved. In the meantime poor students should not bear the cost of poorly managed districts, the human cost is too high.

Wouldn't vouchers just lead to the same sort of problems that "free money" loans did in secondary education?

If every poor kid in Buffalo got a tuition voucher for $20k/year, all that would do is make the private schools raise their tuition by $20k/year. The same students would attend, the parents would pay the same amount out of pocket. Meanwhile, for-profit K-12 companies would spring up to offer new schools with terrible education but really impressive computer labs and athletic programs.

Assuming $20k is per student per year is enough to fund a school, then this would result in the creation of more private schools. So existing ones may raise their tuition, but others will step in to fill the gaps.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: yourusernamehere on May 04, 2016, 03:12:18 PM

My parents' first house in the 80's when they were in their late 20's was a little 2 bedroom craphole that my dad had to re-wire himself because it was dangerous to live in otherwise.  They both had college degrees and had been in the working world for 4-5 years.  I know people in their 20's today who whine about their 3-4 bedroom houses not having the right countertops or bathroom layouts. 

The problem I as a 27 year old see, is a lot of people in my age group remember what their parents had when they were kids (the parents were probably in their 40's) and expect to emulate that instantly after leaving home/college.  That is their "baseline" and they only expect to go up from there.  Eating at restaurants or driving new cars on long commutes are also huge money sink that most people don't even notice.  How is paying someone else to make your food for you considered a standard middle class thing?  That's freakin royalty status, yet I know people whose ovens are never used.

This certainly isn't everyone, but it's very frustrating to see.

+1 on the Baseline Inflation. I've been saying this for a few years to family, friends, and coworkers. Only the savvy get it.

Argh! I wrote a really long post about this put it didn't post, so here's the short version.

Is the 'problem' that people are having children later? Assuming everyone's life generally goes like this:

Early twenties: cockroach infested basement
Late twenties: no cockroaches but no luxuries
Early thirties: first 'family home'
Late thirties: interest in landscaping and granite countertops

If you have children in your early twenties then they'll mostly remember "no cockroaches" and the big deal that was moving into "first family home". Late twenties, it's "first family home" and the upgrades that came through landscaping and granite countertops. Early thirties and all they'll remember is the landscaping and granite countertops.

My parents had me and my brother in their mid to late thirties and we moved into "big forever family home" when I was five so that's all I remember. I am aware that we lived in a small house for five whole years of my life but that's not really a part of my experience. And my parents have mentioned crappy places they lived earlier in life but obviously I've never seen them and they've never gone into detail. My whole conception of "how people live" (in the sense that children can only extrapolate to generalities from what they know) was based on "big forever family home". How can it be any different for children who are born when their parents are in their thirties?

Everyone thinks they should be doing better than their parents (up, up, up!), and easy credit makes it possible, temporarily. 

I think another part of it is parents shielding their kids from crappy sacrifices they have to make, or at the least downplaying them.  Nobody tells their 5 year old "Daddy's working this weekend because he took out too much of a loan for his new car, so he can't quit his job even though his boss is a complete asshole."
Interesting point. I remember asking my dad for some spending money once (around age 10 maybe?) and his reply was to walk me into the den and show me which bills he was choosing to pay late to get caught up on the others from last month. He showed me how it was a constant balancing game, and the $5 I wanted would be coming from the grocery money. During this time my parents both worked multiple jobs, and I later learned they had really bought too much house - though not much at all by today's "standards." That memory stuck with me as a Thing I Never Want to Have to Do. I'm sure it made a difference.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 04, 2016, 03:15:44 PM
It seems to me that vouchers allow "good" students to flee perceived "bad" schools and spend money on private or religious schools or transfer to "good" public schools within the same school district.  Vouchers seem like the kind of fix that has the potential to erode public education in many poor communities if the voucher systems is not implemented properly.  The real problem is how public education is funded in the United States.  Property taxes pay a large portion of K-12 public education in the United States.  Even though every school district takes state money, they limit enrollment to their geographical boundaries which coincide with the property taxing district.  I might be for a voucher system if students were allowed to transfer (with busing) from any urban or suburban district to any urban or suburban district.  This would allow for much greater diversity in both urban and suburban schools which is greatly lacking now.  If this type of broad freedom to transfer is denied students in a voucher system, then I think it's better to focus on fixing the current system rather than complaining about it.  As a result, I think vouchers are bad because they create larger problems by concentrating the "bad" kids all in "bad" schools that will serve as a breeding ground for all kinds of bad problems.  As another poster suggested, and if we can't get a regional school choice voucher system, it is much better policy to use resources to simply make the "bad" schools better so the "good" students don't want to leave their neighborhood school.  Running away from problems never fixes problems although moving from a "bad" public school district to a "good" public school district would help solve some short term problems that your own children might be experiencing rather than staying put and hoping to use a voucher to pay for a private or religious school or transferring to a different public school within the same school district.

Vouchers are one way to increase school choice. Charter schools are another option. Or it may be possible to allow more movement across district boundaries. Increased parent choice is always better, we should be pursuing all options. If a school is "bad" because the vast majority of students don't value education, then no one will notice if they lose a few good students to other schools. If, on the other hand, a large number of students (and parents) really care and a school is simply poorly managed, then it's better for that school to be forced to shut down. Voting with your feet is not "running away from problems," it's keeping schools and districts accountable.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: BigoteGato on May 05, 2016, 09:19:26 AM
My parents' first house in the 80's when they were in their late 20's was a little 2 bedroom craphole that my dad had to re-wire himself because it was dangerous to live in otherwise.  They both had college degrees and had been in the working world for 4-5 years.  I know people in their 20's today who whine about their 3-4 bedroom houses not having the right countertops or bathroom layouts. 

The problem I as a 27 year old see, is a lot of people in my age group remember what their parents had when they were kids (the parents were probably in their 40's) and expect to emulate that instantly after leaving home/college.  That is their "baseline" and they only expect to go up from there.  Eating at restaurants or driving new cars on long commutes are also huge money sink that most people don't even notice.  How is paying someone else to make your food for you considered a standard middle class thing?  That's freakin royalty status, yet I know people whose ovens are never used.

This certainly isn't everyone, but it's very frustrating to see.

+1 on the Baseline Inflation. I've been saying this for a few years to family, friends, and coworkers. Only the savvy get it.

Argh! I wrote a really long post about this put it didn't post, so here's the short version.

Is the 'problem' that people are having children later? Assuming everyone's life generally goes like this:

Early twenties: cockroach infested basement
Late twenties: no cockroaches but no luxuries
Early thirties: first 'family home'
Late thirties: interest in landscaping and granite countertops

If you have children in your early twenties then they'll mostly remember "no cockroaches" and the big deal that was moving into "first family home". Late twenties, it's "first family home" and the upgrades that came through landscaping and granite countertops. Early thirties and all they'll remember is the landscaping and granite countertops.

My parents had me and my brother in their mid to late thirties and we moved into "big forever family home" when I was five so that's all I remember. I am aware that we lived in a small house for five whole years of my life but that's not really a part of my experience. And my parents have mentioned crappy places they lived earlier in life but obviously I've never seen them and they've never gone into detail. My whole conception of "how people live" (in the sense that children can only extrapolate to generalities from what they know) was based on "big forever family home". How can it be any different for children who are born when their parents are in their thirties?

Excellent post. I had noticed the increase in expectations, but had not connected it to later births. Thanks for the insight.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: golden1 on May 05, 2016, 09:58:51 AM
There is a follow up article to this in the Atlantic: 

http://www.theatlantic.com/business/archive/2016/05/american-financial-hell/481107/ (http://www.theatlantic.com/business/archive/2016/05/american-financial-hell/481107/)

It essentially tries to tie increasing wealth inequality to people spending like they are living on the edge.  I think there is some truth to that.  I live in MA, and people around here are definitely house poor since we have great schools here.  It is just assumed that you will live in the most expensive town you can afford in order to get your kids in the best schools. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: dogboyslim on May 05, 2016, 11:10:44 AM
He has a bike, but the games aren't close by and drivers are crazy.  And he's not allowed to leave the elementary school grounds without a parent to sign him out. (not until he's 12, which is another 2 years).

We don't let our kids bike to soccer or swimming because we live in suburbia and the roads are all 4 lane 45 mph roads. We do let them bike to school since that is within our neighborhood and no major streets are involved.  We had to sign something saying that he could leave school on bike and understood that he would not be under supervision if he did so.  School is about .7 miles from home.  I'm not sure your situation or if you are even interested in having the kids bike to school, but the school may have some alternative checkout for kids that walk/bike to school.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ardrum on May 05, 2016, 11:15:43 AM
Quote
In the absence of a good understanding of what is going on, people frequently disparage those who are suffering. There are two common reactions to The Atlantic’s May cover story. On the left there seems to be a lot of, “Boohoo, a rich person who spends too much. We have real poverty to worry about.” On the right there was more of, “He made bad decisions and blames the system, our glorious system, for it!”

The author seems quick to dismiss any critique of the featured individual's situation here.  She implies for someone to raise either of these critiques (which could be both put forth by the same person rather than dependent on left/right leanings as she suggests), they must be lacking "a good understanding of what is going on.". Hah!

She then fails to adequately address either of these "common reactions," instead going on and on about housing being too expensive.  If these "suffering" middle class Americans (itself an insulting characterization to over a billion people on the planet at the true bottom of the economic barrel) presented their financial situations in case study format on this forum, I would love to see the average amount of complete waste in their spending (look, I levied both common reactions!).  Of course, most people couldn't present this information because they don't bother to even pay attention to their own economic behavior over time.

I am in probably the perceived "best" school district in my area and live comfortably at $18k/year, including housing expenses, with a bit of waste still in my budget that I will reduce further when I move. 

Nobody NEEDS to be spending $50-100k of earned income to "get by" and have children be adequately educated.  I would start to question one's perception of what constitutes a good education rather than blindly think the most expensive school is necessarily the best.  Last I checked, hard work had something to do with learning, and many college students aren't even cracking open books in expensive private schools. 

Overall, these kinds of articles just reek of complainypants sentiment and a deep desire to play the victim card.

Title: Re: The Secret Shame of Middle-Class Americans
Post by: golden1 on May 05, 2016, 11:37:07 AM
It is definitely possible to live in a good school district and live frugally, but the supply of those living situations is limited.  The point isn't that you CAN"T live frugally, it is that our society's incentives to get your kids in the best possible school district are very strong and hard to ignore for a variety of reasons.  Not all of these are logical reasons, but they are driving people en mass to spend a lot of money.  So to me the stereotype of the wasteful spender who is buying large screen TVs and expensive cable isn't what I see.  I see people paying 50+ percent of their income in housing so their kids can go to a highly ranked school district so they can get into a good college and have a shot at moving up the ladder.  And it isn't just the parents, it is the culture at large that is pushing this path to prosperity.  Changing culture is hard. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: infogoon on May 05, 2016, 12:02:49 PM
Assuming $20k is per student per year is enough to fund a school, then this would result in the creation of more private schools. So existing ones may raise their tuition, but others will step in to fill the gaps.

Oh, I'm sure others will step in. Any time there's an exploitable source of government cash, people are happy to step in and try to get a piece of the action. I just have my doubts that the people stepping in will be able to actually run a better school than the ones in the public system they're taking money from. I imagine a lot of it will end up like Deion Sanders' charter school, or the other for-profit corporate charter schools that are failing all over America.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Tyson on May 05, 2016, 12:42:29 PM
Assuming $20k is per student per year is enough to fund a school, then this would result in the creation of more private schools. So existing ones may raise their tuition, but others will step in to fill the gaps.

Oh, I'm sure others will step in. Any time there's an exploitable source of government cash, people are happy to step in and try to get a piece of the action. I just have my doubts that the people stepping in will be able to actually run a better school than the ones in the public system they're taking money from. I imagine a lot of it will end up like Deion Sanders' charter school, or the other for-profit corporate charter schools that are failing all over America.

The problem with private anything is that the companies are motivated by profit, so they will always try to cut costs as low as possible (such as teacher salaries and buildings and supplies) as low as possible.  First, drive out the competition, then ruthlessly lower standards and costs in order to maximize profit.  Its the American Way!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Sid888 on May 05, 2016, 12:51:08 PM
There is a follow up article to this in the Atlantic: 

http://www.theatlantic.com/business/archive/2016/05/american-financial-hell/481107/ (http://www.theatlantic.com/business/archive/2016/05/american-financial-hell/481107/)

It essentially tries to tie increasing wealth inequality to people spending like they are living on the edge.  I think there is some truth to that.  I live in MA, and people around here are definitely house poor since we have great schools here.  It is just assumed that you will live in the most expensive town you can afford in order to get your kids in the best schools.

Thanks for posting.  This paragraph pretty much sums it up.

"There’s no escaping the pressure that U.S. inequality exerts on parents to make sure their kids succeed.  At its core, this relentless drive to spend any money available comes not from a desire to consume more lattes and own nicer cars, but, largely, from the pressure people feel to provide their kids with access to the best schools they can afford (purchased, in most cases, not via tuition but via real estate in a specific public-school district). Breaking the bank for your kids’ education is, to an extent, perfectly reasonable: In a deeply unequal society, the gains to be made by being among the elite are enormous, and the consequences of not being among them are dire. When understood mainly as a consequence of this rush to provide for one’s children, the drive to maximize spending is not some bizarre mystery, nor a sign of massive irresponsibility, but a predictable consequence of severe inequality."
Title: Re: The Secret Shame of Middle-Class Americans
Post by: MrMoogle on May 05, 2016, 12:53:16 PM
Assuming $20k is per student per year is enough to fund a school, then this would result in the creation of more private schools. So existing ones may raise their tuition, but others will step in to fill the gaps.

Oh, I'm sure others will step in. Any time there's an exploitable source of government cash, people are happy to step in and try to get a piece of the action. I just have my doubts that the people stepping in will be able to actually run a better school than the ones in the public system they're taking money from. I imagine a lot of it will end up like Deion Sanders' charter school, or the other for-profit corporate charter schools that are failing all over America.

The problem with private anything is that the companies are motivated by profit, so they will always try to cut costs as low as possible (such as teacher salaries and buildings and supplies) as low as possible.  First, drive out the competition, then ruthlessly lower standards and costs in order to maximize profit.  Its the American Way!
If parents homeschool, can they get that $20k?  I bet a lot of parents with a lot of kids would do that.

If you successfully drive out competition, and it becomes a monopoly, then yes, you can cut costs, but as long as there is choice, some people will see the difference.  It's the same on the teacher side.

Paying teachers as low as possible isn't a bad thing, as long as you still get results.  It's when you choose less quality because it is cheaper, that's the problem. 

Frugal vs cheap, we want frugal, not cheap.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 05, 2016, 01:00:30 PM
Assuming $20k is per student per year is enough to fund a school, then this would result in the creation of more private schools. So existing ones may raise their tuition, but others will step in to fill the gaps.

Oh, I'm sure others will step in. Any time there's an exploitable source of government cash, people are happy to step in and try to get a piece of the action. I just have my doubts that the people stepping in will be able to actually run a better school than the ones in the public system they're taking money from. I imagine a lot of it will end up like Deion Sanders' charter school, or the other for-profit corporate charter schools that are failing all over America.

The problem with private anything is that the companies are motivated by profit, so they will always try to cut costs as low as possible (such as teacher salaries and buildings and supplies) as low as possible.  First, drive out the competition, then ruthlessly lower standards and costs in order to maximize profit.  Its the American Way!

Many private schools are non-profits. As I mentioned earlier in the thread, I attended a private high school with a budget substantially less than that of the local public schools, and yet it had much better outcomes. If private schools, charters, or other options don't do a better job then parents can pull their kids and go elsewhere. Some charter schools have failed whereas others have succeeded. The charter schools in my area outperform the other public schools. YMMV. I don't understand what's so scary about giving ALL parents, regardless of wealth, choices for their kids education.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Tyson on May 05, 2016, 01:04:55 PM
Assuming $20k is per student per year is enough to fund a school, then this would result in the creation of more private schools. So existing ones may raise their tuition, but others will step in to fill the gaps.

Oh, I'm sure others will step in. Any time there's an exploitable source of government cash, people are happy to step in and try to get a piece of the action. I just have my doubts that the people stepping in will be able to actually run a better school than the ones in the public system they're taking money from. I imagine a lot of it will end up like Deion Sanders' charter school, or the other for-profit corporate charter schools that are failing all over America.

The problem with private anything is that the companies are motivated by profit, so they will always try to cut costs as low as possible (such as teacher salaries and buildings and supplies) as low as possible.  First, drive out the competition, then ruthlessly lower standards and costs in order to maximize profit.  Its the American Way!

Many private schools are non-profits. As I mentioned earlier in the thread, I attended a private high school with a budget substantially less than that of the local public schools, and yet it had much better outcomes. If private schools, charters, or other options don't do a better job then parents can pull their kids and go elsewhere. Some charter schools have failed whereas others have succeeded. The charter schools in my area outperform the other public schools. YMMV. I don't understand what's so scary about giving ALL parents, regardless of wealth, choices for their kids education.

I think Denver (where we live now) has a very good approach - you have a home district that you are automatically enrolled in, but you are allowed to "Choice" into another school if you feel like that's a better fit for you and your family.  Of course there's a limit to how many kids are allowed at each school, so once that's filled you can't get in there any more.  So what Denver does is have you pick 5 schools you'd like to Choice into, and they'll just go down the list until there's one with an opening. 

See, plenty of choice without any need to privatize anything.  I say, make basic education (public education) better for everyone and leave the private schools for rich suckers. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 05, 2016, 05:28:53 PM
Assuming $20k is per student per year is enough to fund a school, then this would result in the creation of more private schools. So existing ones may raise their tuition, but others will step in to fill the gaps.

Oh, I'm sure others will step in. Any time there's an exploitable source of government cash, people are happy to step in and try to get a piece of the action. I just have my doubts that the people stepping in will be able to actually run a better school than the ones in the public system they're taking money from. I imagine a lot of it will end up like Deion Sanders' charter school, or the other for-profit corporate charter schools that are failing all over America.

The problem with private anything is that the companies are motivated by profit, so they will always try to cut costs as low as possible (such as teacher salaries and buildings and supplies) as low as possible.  First, drive out the competition, then ruthlessly lower standards and costs in order to maximize profit.  Its the American Way!

Many private schools are non-profits. As I mentioned earlier in the thread, I attended a private high school with a budget substantially less than that of the local public schools, and yet it had much better outcomes. If private schools, charters, or other options don't do a better job then parents can pull their kids and go elsewhere. Some charter schools have failed whereas others have succeeded. The charter schools in my area outperform the other public schools. YMMV. I don't understand what's so scary about giving ALL parents, regardless of wealth, choices for their kids education.

I think Denver (where we live now) has a very good approach - you have a home district that you are automatically enrolled in, but you are allowed to "Choice" into another school if you feel like that's a better fit for you and your family.  Of course there's a limit to how many kids are allowed at each school, so once that's filled you can't get in there any more.  So what Denver does is have you pick 5 schools you'd like to Choice into, and they'll just go down the list until there's one with an opening. 

See, plenty of choice without any need to privatize anything.  I say, make basic education (public education) better for everyone and leave the private schools for rich suckers.

It's a step in the right direction, though still limited to a single district. Would still prefer to see things change to allow parents many more choices.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ShoulderThingThatGoesUp on May 06, 2016, 05:15:13 AM
It is definitely possible to live in a good school district and live frugally, but the supply of those living situations is limited.  The point isn't that you CAN"T live frugally, it is that our society's incentives to get your kids in the best possible school district are very strong and hard to ignore for a variety of reasons.  Not all of these are logical reasons, but they are driving people en mass to spend a lot of money.  So to me the stereotype of the wasteful spender who is buying large screen TVs and expensive cable isn't what I see.  I see people paying 50+ percent of their income in housing so their kids can go to a highly ranked school district so they can get into a good college and have a shot at moving up the ladder.  And it isn't just the parents, it is the culture at large that is pushing this path to prosperity.  Changing culture is hard.

Wow, Massachusetts sounds awful.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: golden1 on May 06, 2016, 06:22:11 AM
How does that actually add anything to the discussion?  I guess if thinking that a place is "awful" makes you happy in your own world view, then so be it. 

No it isn't actually.  It's a fairly nice place to live in many respects with great schools, hospitals, museums and culture.  And when I am speaking of my area, I am talking of the suburban Boston area.  Western MA is more affordable and more rural.  Our state has not only some of the best public schools in the country, it has some of the best schools in the world.  The reason why people are willing to pay the high house prices is because there are a lot of benefits to living here. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ShoulderThingThatGoesUp on May 06, 2016, 07:32:41 AM
But there are lots of school districts out there that are quite good and affordable at around the median income. If Massachusetts can't make that happen and the middle class has to choose between bad schools and living on the edge of their means, it's doing something seriously wrong.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Cassie on May 06, 2016, 01:58:19 PM
We went to Boston for the first time in Nov and just loved it. The people were nice and there was so much to see and do. I would love to go back.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mwulff on May 07, 2016, 12:43:59 AM
As a foreigner there is something I just don't get. Let's for the moment assume that all the best schools are in expensive districts and all the horrible ones are in cheap districts.

What happened to the good-enough schools in the sensibly priced areas? Is going to a top school really the only way to get a decent college education?

I'll assume that now everyone gets to go to an Ivy League school and that you can get a good job without that.

Have the schools become so polarized that there are only great/expensive and crap/cheap to choose from?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 07, 2016, 01:50:36 AM
As a foreigner there is something I just don't get. Let's for the moment assume that all the best schools are in expensive districts and all the horrible ones are in cheap districts.

What happened to the good-enough schools in the sensibly priced areas? Is going to a top school really the only way to get a decent college education?

I'll assume that now everyone gets to go to an Ivy League school and that you can get a good job without that.

Have the schools become so polarized that there are only great/expensive and crap/cheap to choose from?

There are plenty of good-enough schools in the middle. In most fields your alma mater is largely irrelevant 3-5+ years into your career. What really matters is whether you learned what you needed to, and then applied that knowledge to become proficient.

But this is 'Merica and we're all special and unique snowflakes. Especially our kids, who are all gifted and above average. So we obsess about providing the absolute 'best' for our kids. This provides us with a way to signal membership in the upper crust, since the old signals (big house, luxury cars, fancy vacations, etc.) have been appropriated by the vast unwashed masses via credit. Of course, getting little Timmy an Ivy league education for this purpose is vulgar and runs contrary to the narrative that we're doing it because Timmy is gifted. So we tell ourselves that this is a "winner take all economy" and the only way to avoid abject poverty in this life is to attend the very best university, which of course also requires (we tell ourselves) attending the very best secondary-, elementary-, and pre-schools.

It's really not surprising that this perverse outlook on life is producing things such as the suicide clusters in Palo Alto (http://www.theatlantic.com/magazine/archive/2015/12/the-silicon-valley-suicides/413140/). Quoting that article: "Many have also fallen prey to what Levine calls a 'mass delusion' that there is but one path to a successful life, and that it is very narrow."
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ShoulderThingThatGoesUp on May 07, 2016, 05:22:45 AM
As a foreigner there is something I just don't get. Let's for the moment assume that all the best schools are in expensive districts and all the horrible ones are in cheap districts.

What happened to the good-enough schools in the sensibly priced areas? Is going to a top school really the only way to get a decent college education?

I'll assume that now everyone gets to go to an Ivy League school and that you can get a good job without that.

Have the schools become so polarized that there are only great/expensive and crap/cheap to choose from?

There are plenty of good-enough schools in the middle. In most fields your alma mater is largely irrelevant 3-5+ years into your career. What really matters is whether you learned what you needed to, and then applied that knowledge to become proficient.

But this is 'Merica and we're all special and unique snowflakes. Especially our kids, who are all gifted and above average. So we obsess about providing the absolute 'best' for our kids. This provides us with a way to signal membership in the upper crust, since the old signals (big house, luxury cars, fancy vacations, etc.) have been appropriated by the vast unwashed masses via credit. Of course, getting little Timmy an Ivy league education for this purpose is vulgar and runs contrary to the narrative that we're doing it because Timmy is gifted. So we tell ourselves that this is a "winner take all economy" and the only way to avoid abject poverty in this life is to attend the very best university, which of course also requires (we tell ourselves) attending the very best secondary-, elementary-, and pre-schools.

I think the very top-rated high schools might get a few extra kids into the Ivy League. But it's a very low chance your kid will be one of those marginal kids.

When my wife and I were looking at districts to raise our family in, we looked at (1) safety of the school, (2) number of AP classes offered, (3) the standardized test rankings. We ended up in not-the-fanciest district locally, but a very acceptable one. I volunteer to interview kids applying to the Ivy League school I attended, and I was very impressed with the kids coming out of the local high school who applied. Many of them were taking multivariable calculus in high school, which my fancy high school didn't even offer back when I went.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Classical_Liberal on May 07, 2016, 01:23:46 PM

Thanks for posting.  This paragraph pretty much sums it up.

"There’s no escaping the pressure that U.S. inequality exerts on parents to make sure their kids succeed.  At its core, this relentless drive to spend any money available comes not from a desire to consume more lattes and own nicer cars, but, largely, from the pressure people feel to provide their kids with access to the best schools they can afford (purchased, in most cases, not via tuition but via real estate in a specific public-school district). Breaking the bank for your kids’ education is, to an extent, perfectly reasonable: In a deeply unequal society, the gains to be made by being among the elite are enormous, and the consequences of not being among them are dire. When understood mainly as a consequence of this rush to provide for one’s children, the drive to maximize spending is not some bizarre mystery, nor a sign of massive irresponsibility, but a predictable consequence of severe inequality."

This is interesting and may be true.  However, it also shows another side of the issue.  In our society people have the ability to manufacture upward mobility.  This is why parents are willing to sacrifice much to improve their children's odds at being in the "elite" class. We take this for granted, but in the not so distant past social mobility was near nonexistent. In general, most US citizens want the opportunity for upward mobility without letting those who "win" the game do so by by too much of a margin.  Afterall, everyone wants the opportunity to better their position with hard work (there is, no doubt other things involved). The smaller the margin of "victory", the less people who are willing to put forth the effort.   So the problem lies in finding a balance between the two, equality and social mobility opportunities.  Of course, if as a society we change what the definition of "winning" is, then the entire game changes.  IMO this should be the long term goal.  Then the problem becomes, how do we achieve this change and exactly what should the new definition be.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: randymarsh on May 07, 2016, 04:47:22 PM
As a foreigner there is something I just don't get. Let's for the moment assume that all the best schools are in expensive districts and all the horrible ones are in cheap districts.

What happened to the good-enough schools in the sensibly priced areas? Is going to a top school really the only way to get a decent college education?

I'll assume that now everyone gets to go to an Ivy League school and that you can get a good job without that.

Have the schools become so polarized that there are only great/expensive and crap/cheap to choose from?

There of still plenty of "regular" schools. I attended K-12 at one district in working/middle class Ohio. The district is rated Excellent AFAIK and houses in the district start at ~120K. Do many, if any, graduates attend the Ivies for undergrad? Not that I'm aware of. I'm sure some elite snobs would look down at my high school. After all, we only had about 7 AP courses instead of the 20 you might find at a "better" school. Your 18 year old is doomed if they can't take Comparative Government and Politics right?

Now we're all destitute. Wait, no, actually many of my classmates are now working as accountants, engineers, nurses, or going to medical/pharmacy school.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: serpentstooth on May 07, 2016, 05:07:37 PM

Thanks for posting.  This paragraph pretty much sums it up.

"There’s no escaping the pressure that U.S. inequality exerts on parents to make sure their kids succeed.  At its core, this relentless drive to spend any money available comes not from a desire to consume more lattes and own nicer cars, but, largely, from the pressure people feel to provide their kids with access to the best schools they can afford (purchased, in most cases, not via tuition but via real estate in a specific public-school district). Breaking the bank for your kids’ education is, to an extent, perfectly reasonable: In a deeply unequal society, the gains to be made by being among the elite are enormous, and the consequences of not being among them are dire. When understood mainly as a consequence of this rush to provide for one’s children, the drive to maximize spending is not some bizarre mystery, nor a sign of massive irresponsibility, but a predictable consequence of severe inequality."

This is interesting and may be true.  However, it also shows another side of the issue.  In our society people have the ability to manufacture upward mobility.  This is why parents are willing to sacrifice much to improve their children's odds at being in the "elite" class. We take this for granted, but in the not so distant past social mobility was near nonexistent.

I'm going to get controversial here, so people may want to scroll.

I wonder if this notion of social mobility isn't part of why the middle class is broke, broke, broke. Most of the middle class in the modern times...wouldn't have been middle class 400 years ago. Pre industrial revolution, you had a landed noble class, a smallish merchant/skilled artisan/warrior/religious class, and a lot of agrarian peasants. Being middle class 400 years ago meant you had your act together enough to master a complex skill and quite possibly run your own business, which means you had to have some ability to weigh tradeoffs and save for the future and use capital wisely, or you weren't going to be middle class for long.

Given that every trait has a substantial genetic component,* maybe a lot of our middle class isn't really supposed to be middle class: instead we're peasants who lucked into being born in an era when the innovations of the skilled artisan and merchant classes generated enough positive dividends to raise living standards broadly. So instead of growing corn, peasants are now driving for UPS or doing accounts receivable at a small company or being a cook or working at a nursery school or... We assume that a middle class household in a lot of credit card debt is doing something wrong, but maybe they are doing really well with the plan-for-the-future-and-delay-gratification genes (or lack thereof) they've got. The Chinese merchant class in Southeast Asia and Jews in Eastern Europe did well for themselves for centuries lending money to peasants who couldn't budget their annual cash inflow from selling the harvest to last the whole year. Maybe this writer, and a lot of middle class Americans, are really Thai rice farmers inside and are acting like them.

Gregory Clark wrote a fascinating book called The Son Also Rises that suggests that social class is about as heritable as height, and he validates this with twin studies. It's a fascinating read and I agree with his thesis that social mobility doesn't really happen.

*Yes, I know that makes people feel icky. But right now the evidence suggests it's true and sooner or later we're going to have to deal with that. http://people.virginia.edu/~ent3c/papers2/three_laws.pdf
Title: Re: The Secret Shame of Middle-Class Americans
Post by: nobodyspecial on May 07, 2016, 07:50:44 PM
America seems to have a rather simplified class definition:
upper class = have own jet
working class = never had a job
middle class = the rest


Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 07, 2016, 09:52:42 PM
I'm going to get controversial here, so people may want to scroll.

I wonder if this notion of social mobility isn't part of why the middle class is broke, broke, broke. Most of the middle class in the modern times...wouldn't have been middle class 400 years ago. Pre industrial revolution, you had a landed noble class, a smallish merchant/skilled artisan/warrior/religious class, and a lot of agrarian peasants. Being middle class 400 years ago meant you had your act together enough to master a complex skill and quite possibly run your own business, which means you had to have some ability to weigh tradeoffs and save for the future and use capital wisely, or you weren't going to be middle class for long.

Given that every trait has a substantial genetic component,* maybe a lot of our middle class isn't really supposed to be middle class: instead we're peasants who lucked into being born in an era when the innovations of the skilled artisan and merchant classes generated enough positive dividends to raise living standards broadly. So instead of growing corn, peasants are now driving for UPS or doing accounts receivable at a small company or being a cook or working at a nursery school or... We assume that a middle class household in a lot of credit card debt is doing something wrong, but maybe they are doing really well with the plan-for-the-future-and-delay-gratification genes (or lack thereof) they've got. The Chinese merchant class in Southeast Asia and Jews in Eastern Europe did well for themselves for centuries lending money to peasants who couldn't budget their annual cash inflow from selling the harvest to last the whole year. Maybe this writer, and a lot of middle class Americans, are really Thai rice farmers inside and are acting like them.

Gregory Clark wrote a fascinating book called The Son Also Rises that suggests that social class is about as heritable as height, and he validates this with twin studies. It's a fascinating read and I agree with his thesis that social mobility doesn't really happen.

*Yes, I know that makes people feel icky. But right now the evidence suggests it's true and sooner or later we're going to have to deal with that. http://people.virginia.edu/~ent3c/papers2/three_laws.pdf

This is why the middle class is broke (https://research.stlouisfed.org/fred2/series/A794RX0Q048SBEA). We can debate why PCE has marched steadily upward: education and healthcare costs have outpaced inflation, lifestyle inflation, whatever. The fact is we are spending more than ever, and we can't afford it. Besides, 400 years ago one inherited class based on the family there were born into, it had nothing to do with genetics or ability. Consider the number of monarchs in the past who were mentally ill or disabled, often times as the result of inbreeding in the royal lines. And the guilds of the era (artisan and merchant) were eventually done away with because they harmed the economy through their rent seeking and protectionism, which kept otherwise capable/skilled people from competing with them. I really don't think this is a genetic issue.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: shelivesthedream on May 08, 2016, 06:29:35 AM
America seems to have a rather simplified class definition:
upper class = have own jet
working class = never had a job
middle class = the rest

From reading this thread, this seems pretty accurate. Does America not have a sense of:

Old money upper class
New money upper class
Upper middle class (not quite new money upper class but getting there)
Middle middle class
Lower middle class (probably one generation out of upper working class)
Upper working class
Proud working class
Jobless working class

I know the 'class system' in England is pretty complicated and based on accent, cultural preferences, job, what your parents are like, where you live, what school you went to etc etc as much as or more than money - but does America not have any of that? The plays 'Abigail's Party' and 'Educating Rita' are pretty good examples of the fine delineations of class in the UK and how difficult it is to move up or down a class even if you change one external factor. The lower middle class is proverbially the worst for class in the UK because they care the most about what class they are and having to ostentatiously prove that they are better than the upper working class. New money upper class comes a close second, but I'm not sure most people are that bothered to be honest.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Paul der Krake on May 08, 2016, 06:40:47 AM
America seems to have a rather simplified class definition:
upper class = have own jet
working class = never had a job
middle class = the rest

From reading this thread, this seems pretty accurate. Does America not have a sense of:

Old money upper class
New money upper class
Upper middle class (not quite new money upper class but getting there)
Middle middle class
Lower middle class (probably one generation out of upper working class)
Upper working class
Proud working class
Jobless working class

I know the 'class system' in England is pretty complicated and based on accent, cultural preferences, job, what your parents are like, where you live, what school you went to etc etc as much as or more than money - but does America not have any of that? The plays 'Abigail's Party' and 'Educating Rita' are pretty good examples of the fine delineations of class in the UK and how difficult it is to move up or down a class even if you change one external factor. The lower middle class is proverbially the worst for class in the UK because they care the most about what class they are and having to ostentatiously prove that they are better than the upper working class. New money upper class comes a close second, but I'm not sure most people are that bothered to be honest.
Everybody understands the difference between a Vanderbilt and Elon Musk (both upper class), or a successful plumber and a day laborer (both technically working class but 5-6 gap of zeros in net worth) but it's not like people go about their days wondering were they fit in and then proudly wear that label.

Then you have people who have a middle of the road income, yet by virtue of education and connections, or lack thereof, rub elbows with folks with incomes very different from theirs. The list of caveats is just too long.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: tipster350 on May 08, 2016, 07:18:38 AM
America seems to have a rather simplified class definition:
upper class = have own jet
working class = never had a job
middle class = the rest

From reading this thread, this seems pretty accurate. Does America not have a sense of:

Old money upper class
New money upper class
Upper middle class (not quite new money upper class but getting there)
Middle middle class
Lower middle class (probably one generation out of upper working class)
Upper working class
Proud working class
Jobless working class

I know the 'class system' in England is pretty complicated and based on accent, cultural preferences, job, what your parents are like, where you live, what school you went to etc etc as much as or more than money - but does America not have any of that? The plays 'Abigail's Party' and 'Educating Rita' are pretty good examples of the fine delineations of class in the UK and how difficult it is to move up or down a class even if you change one external factor. The lower middle class is proverbially the worst for class in the UK because they care the most about what class they are and having to ostentatiously prove that they are better than the upper working class. New money upper class comes a close second, but I'm not sure most people are that bothered to be honest.

Americans don't talk about or acknowledge class the same way Brits do. We have the same general classes and people know who their people are, but it's not discussed in the same way, if at all. I think this probably is because America was founded on the idea of limitless possibilities. Even though that is not the case anymore for most citizens, and in fact class mobility is actually similar to that in Britain, no one likes to admit it. We like to think hard work alone can pull anyone from any class or circumstance upward. There are always outliers, and many of the outliers are on this site, but presently, the class one was born into is the class one will stay in. Just like everywhere else, if not more so.

The fact is that most Americans are members of the working class to lower middle class, in terms of what their incomes will buy.

http://www.epi.org/publication/usa-lags-peer-countries-mobility/
Title: Re: The Secret Shame of Middle-Class Americans
Post by: shelivesthedream on May 08, 2016, 12:34:08 PM
America seems to have a rather simplified class definition:
upper class = have own jet
working class = never had a job
middle class = the rest

From reading this thread, this seems pretty accurate. Does America not have a sense of:

Old money upper class
New money upper class
Upper middle class (not quite new money upper class but getting there)
Middle middle class
Lower middle class (probably one generation out of upper working class)
Upper working class
Proud working class
Jobless working class

I know the 'class system' in England is pretty complicated and based on accent, cultural preferences, job, what your parents are like, where you live, what school you went to etc etc as much as or more than money - but does America not have any of that? The plays 'Abigail's Party' and 'Educating Rita' are pretty good examples of the fine delineations of class in the UK and how difficult it is to move up or down a class even if you change one external factor. The lower middle class is proverbially the worst for class in the UK because they care the most about what class they are and having to ostentatiously prove that they are better than the upper working class. New money upper class comes a close second, but I'm not sure most people are that bothered to be honest.
Everybody understands the difference between a Vanderbilt and Elon Musk (both upper class), or a successful plumber and a day laborer (both technically working class but 5-6 gap of zeros in net worth) but it's not like people go about their days wondering were they fit in and then proudly wear that label.

Then you have people who have a middle of the road income, yet by virtue of education and connections, or lack thereof, rub elbows with folks with incomes very different from theirs. The list of caveats is just too long.

That's what I mean, that people are failing to make the distinction between lower middle class (middle class but certainly not able to afford private schools, big cars and flashy holidays) and upper middle class (probably able to afford the above, although might get tricked into trying to ape new money upper class). It's the middle middle class trying to be upper middle class because it's just "middle class" that's the problem - "middle class" means hugely different things yet they're all lumped in together.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ender on May 08, 2016, 02:44:29 PM
America effectively has "poor" and "middle class" and "ultra rich."

What people define as the "middle class" will change depending on their incomes. Which makes it pointless to try to "generalize" -- most people will not accept any such arbitrary boxing like "middle class is poverty line to 100k" and "upper middle class is 100k+" type of generalization, unless they are included in "middle class."

People who make $150k as a family consider themselves middle class. Just as people who make 1/2 that. Or perhaps even 2x that amount.

Politics is rife with manipulation of the "middle class" socioeconomic demographic label.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on May 08, 2016, 10:59:50 PM
America effectively has "poor" and "middle class" and "ultra rich."

What people define as the "middle class" will change depending on their incomes. Which makes it pointless to try to "generalize" -- most people will not accept any such arbitrary boxing like "middle class is poverty line to 100k" and "upper middle class is 100k+" type of generalization, unless they are included in "middle class."

People who make $150k as a family consider themselves middle class. Just as people who make 1/2 that. Or perhaps even 2x that amount.

Politics is rife with manipulation of the "middle class" socioeconomic demographic label.

Part of the problem is that, as Americans, we're obsessed with stratifying ourselves based on income (or perceived income) except for some regions that do make adjustments for more traditional forms of social authority that don't depend on money. There was a great deal of that kind of social authority in Alberta where I grew up, and there's a lot of it here in New Mexico too. It comes down to whether or not "land-as-the-means-of-production" is still part of the social dialogue in the area.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Ellabean on May 09, 2016, 01:52:18 PM
Jews lent money in Europe because they WERE NOT ALLOWED to own land and because Christians were prohibited from lending money. This worked great for the ruling class, who could incite a pogrom against Jews as a scapegoat for peasant anger and preserve the status quo. This is very clearly the product of social structure and not "greater intelligence."
Title: Re: The Secret Shame of Middle-Class Americans
Post by: kite on May 09, 2016, 01:54:01 PM
As a foreigner there is something I just don't get. Let's for the moment assume that all the best schools are in expensive districts and all the horrible ones are in cheap districts.

What happened to the good-enough schools in the sensibly priced areas? Is going to a top school really the only way to get a decent college education?

I'll assume that now everyone gets to go to an Ivy League school and that you can get a good job without that.

Have the schools become so polarized that there are only great/expensive and crap/cheap to choose from?
You understand better than most.   The schools are not so polarized. 
"For the children" is a great big cop out.  It's akin to dog whistle politics and you can be sure you are being sold a bill of goods.  Gabler used it in his own defense, and steered the conversation to a rationally sounding excuse for middle class struggling but it's simply not the reason he's in trouble.  He structured his life so as to be a burden to his daughters.  That doesn't give them an edge in life, but the opposite.  He got to preside over the 401k-draining wedding.  Far from being "in the best interests of the children" that stuff sets unsustainable expectations. 

Relative to our American peers, my husband and I were poor and working class as children. His family relied on food stamps to supplement his mother's minimum wage job; I have 9 siblings, wore only hand-me-downs and had every meal stretched with potatoes.  By our 40s, we could finally afford a plane ticket to the countries our ancestors came from over a hundred years ago.  Meeting the distant cousins, whose parents and grandparents didn't get to leave, was enlightenment.  It's something we simply cannot unlearn.  It turns out, we weren't poor, ever.  We were quite prosperous in comparison to the relatives who weren't Americans.  Height, girth, square footage of homes, number of cars, volume of possessions, availability and diversity of foods.  It's insane just how wealthy we Americans actually are.  I have now seen too much to buy into the American myth of the struggling middle-class.  Heck, even poor Americans are richer than most of the middle class in the rest of the world.  The humble brag worked for Gabler.  He got a magazine article sold in America.   But on a global scale, his (and many Americans') complaint about their personal situation is embarrassingly obtuse.  We're the fattest, richest people in the world and we act like petulant children entitled to even more.  It's the very definition of the Ugly American. 

Rest assured, there will be a line around the American  block for the next iGadget.  The mini-storages dotting the American  landscape will soon contain stuff bought this year.  Stuff nobody needed.  And people will clutch filthy pagers to wait for a table at Olive Garden.  The middle hurts because they're  on a hedonistic treadmill.  They use "for the children" to explain so that you'll nod in deference to their unreasonable behavior without digging.  But we should dig, asking questions like yours. 

It doesn't make sense to a foreigner, because it doesn't make sense.  There are thousands of excellent school districts.  Plenty have affordable places to live.  There is the perfectly valid option of letting your children pay their own way through college or pursue a trade in lieu of college. 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Tyson on May 10, 2016, 12:24:01 PM
kite, that is perhaps the best reply in this whole thread - bravo.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: stoaX on May 10, 2016, 12:50:12 PM
kite, that is perhaps the best reply in this whole thread - bravo.

Agreed!
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ender on May 10, 2016, 05:23:43 PM
It doesn't make sense to a foreigner, because it doesn't make sense.  There are thousands of excellent school districts.  Plenty have affordable places to live.  There is the perfectly valid option of letting your children pay their own way through college or pursue a trade in lieu of college.

An interesting response would be to calculate the cost that a two-income family pays to do the "great school district" thing and daycare for two working parents than one working parent and homeschooling.

Between daycare and additional home price/taxes, I would expect that the second working parent would have to make a lot of money before they broke even.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: BlueHouse on May 19, 2016, 01:04:06 PM
America seems to have a rather simplified class definition:
upper class = have own jet
working class = never had a job
middle class = the rest

From reading this thread, this seems pretty accurate. Does America not have a sense of:

Old money upper class
New money upper class
Upper middle class (not quite new money upper class but getting there)
Middle middle class
Lower middle class (probably one generation out of upper working class)
Upper working class
Proud working class
Jobless working class

I know the 'class system' in England is pretty complicated and based on accent, cultural preferences, job, what your parents are like, where you live, what school you went to etc etc as much as or more than money - but does America not have any of that? The plays 'Abigail's Party' and 'Educating Rita' are pretty good examples of the fine delineations of class in the UK and how difficult it is to move up or down a class even if you change one external factor. The lower middle class is proverbially the worst for class in the UK because they care the most about what class they are and having to ostentatiously prove that they are better than the upper working class. New money upper class comes a close second, but I'm not sure most people are that bothered to be honest.
I think the class system used to exist much more 3 decades ago than it does today, and even then, only in the Northeast (Boston, NY, Philadelphia corridor).  I certainly grew up understanding the difference between old money and new money, but at some point in the 80s and 90s, it became clear that vast amounts of money created real power and the exclusionary tactics of the "old money" set could no longer hold the nouveau riche out of the established clubs, schools, industries, etc.  Later, technological leaps created a sort of meritocracy so that old money no longer mattered and paled in comparison to the excesses of the 90s that came about because of technology.


Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on May 19, 2016, 01:09:27 PM
America seems to have a rather simplified class definition:
upper class = have own jet
working class = never had a job
middle class = the rest

From reading this thread, this seems pretty accurate. Does America not have a sense of:

Old money upper class
New money upper class
Upper middle class (not quite new money upper class but getting there)
Middle middle class
Lower middle class (probably one generation out of upper working class)
Upper working class
Proud working class
Jobless working class

I know the 'class system' in England is pretty complicated and based on accent, cultural preferences, job, what your parents are like, where you live, what school you went to etc etc as much as or more than money - but does America not have any of that? The plays 'Abigail's Party' and 'Educating Rita' are pretty good examples of the fine delineations of class in the UK and how difficult it is to move up or down a class even if you change one external factor. The lower middle class is proverbially the worst for class in the UK because they care the most about what class they are and having to ostentatiously prove that they are better than the upper working class. New money upper class comes a close second, but I'm not sure most people are that bothered to be honest.
I think the class system used to exist much more 3 decades ago than it does today, and even then, only in the Northeast (Boston, NY, Philadelphia corridor).  I certainly grew up understanding the difference between old money and new money, but at some point in the 80s and 90s, it became clear that vast amounts of money created real power and the exclusionary tactics of the "old money" set could no longer hold the nouveau riche out of the established clubs, schools, industries, etc.  Later, technological leaps created a sort of meritocracy so that old money no longer mattered and paled in comparison to the excesses of the 90s that came about because of technology.
I don't think that the classes are wealth-stratified so much as balkanized laterally based on taste and on respective spheres of influence.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Making Cookies on May 23, 2016, 03:21:49 PM
Is this fair?  Hell no.  More importantly, is this dumb policy?  Hell yes.  We are just starting to see the negative ramifications of unaffordable higher education costs and gigantic student loan debt: delayed home buying, delayed marriage, less children, less wealth building, less opportunity, less social advancement, more insecurity, more inequality, and more anger.   When you combine these macro problems with our nation's DIY retirement system, it is truly a recipe for the erosion of the middle class and eventual financial disaster.

When will politics and economics collide on this topic at the ground level?

People are against any gov't sponsored help or regulation of the student loan situation and at the same time they complain that their business selling widgets to people is fading away b/c more recent generations can't afford (won't afford?) to buy squat.

In short for some of the people whom I know well to reconcile their ideas about politics and economics...
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Classical_Liberal on May 23, 2016, 04:42:06 PM
People are against any gov't sponsored help or regulation of the student loan situation and at the same time they complain that their business selling widgets to people is fading away b/c more recent generations can't afford (won't afford?) to buy squat.

The problem isn't always getting people to agree on the problem.  Almost everyone agrees that cost of higher education and the associated debt is a problem, just like most agree the exponential growth of health care cost is a problem.  However, agreeing on a solution... no we've got trouble.  For instance, I believe the reason higher education cost are out of control is because there is TOO MUCH gov't sponsorship and regulation of student loans. The free market will always be more efficient in delivering a product or service than the gov't... Always!  That being said, certain things need to be provided by gov't, despite inefficiencies, because they help create a more even playing field.  Now that post secondary education has become the standard for middle class jobs, gov't should ensure equal access. I'm all for a hillary-type plan of free community college for all, but not with a blank check.  Participating CC's will be expected to keep costs in line, the same way medicare expects hospitals to keep costs in line.  Perhaps there are more efficient means to provide this education?  Add, optional, trade specific, grades 13 and 14 to high schools?  The possibilities are endless, but writing a blank, gov't subsidised,  deferred payment loan check to 18 year old students will only continue to increase the costs of higher education.  If the same thing was offered for ford F150's, half the 18 years olds in the country would have one and the price of base F150's would equal the amount of loan provided by the gov't.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: galliver on May 23, 2016, 08:00:05 PM
Many private schools are non-profits. As I mentioned earlier in the thread, I attended a private high school with a budget substantially less than that of the local public schools, and yet it had much better outcomes. If private schools, charters, or other options don't do a better job then parents can pull their kids and go elsewhere. Some charter schools have failed whereas others have succeeded. The charter schools in my area outperform the other public schools. YMMV. I don't understand what's so scary about giving ALL parents, regardless of wealth, choices for their kids education.

Well, here's two perspectives and they both mention some of the same things, though one is more positive about the concept than the other: http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough (http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough) http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html (http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html)

With charter schools, there is concern that special education students, students whose parents can't or don't support their academics (by going to the right meetings, participating in the charter school, etc), even students who just lose the lottery for admission will be overlooked. The more charter schools are set up, the fewer resources remain for the neighborhood public school, which HAS to accommodate all of the above students. There is also concern that the charters look good compared to the average in large part because they select the top, above average students (probably with above-average family support as well). Or because, as the first article criticizes at length, they drop any students who are not successful.

I think I agree with the author of the NYT article. These schools make sense in an urban environment, where between high population density and public transit (for older students), families can have access to a lot of schools. But in a suburban or rural area, it becomes impractical to provide that degree of choice; people just aren't willing to drive that far to take their kids to school; you already have to gather all the children from a large area to organize a (high) school with good offerings (AP courses, electives) and make it cost-effective. I wonder if online options can be harnessed for these communities to provide additional advanced and elective choices. 1 computer lab and 1 supervising teacher to cover 30-40 students learning different subjects, each of 6-8 class periods?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TheGrimSqueaker on May 23, 2016, 09:57:06 PM
Many private schools are non-profits. As I mentioned earlier in the thread, I attended a private high school with a budget substantially less than that of the local public schools, and yet it had much better outcomes. If private schools, charters, or other options don't do a better job then parents can pull their kids and go elsewhere. Some charter schools have failed whereas others have succeeded. The charter schools in my area outperform the other public schools. YMMV. I don't understand what's so scary about giving ALL parents, regardless of wealth, choices for their kids education.

Well, here's two perspectives and they both mention some of the same things, though one is more positive about the concept than the other: http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough (http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough) http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html (http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html)

With charter schools, there is concern that special education students, students whose parents can't or don't support their academics (by going to the right meetings, participating in the charter school, etc), even students who just lose the lottery for admission will be overlooked. The more charter schools are set up, the fewer resources remain for the neighborhood public school, which HAS to accommodate all of the above students. There is also concern that the charters look good compared to the average in large part because they select the top, above average students (probably with above-average family support as well). Or because, as the first article criticizes at length, they drop any students who are not successful.

I think I agree with the author of the NYT article. These schools make sense in an urban environment, where between high population density and public transit (for older students), families can have access to a lot of schools. But in a suburban or rural area, it becomes impractical to provide that degree of choice; people just aren't willing to drive that far to take their kids to school; you already have to gather all the children from a large area to organize a (high) school with good offerings (AP courses, electives) and make it cost-effective. I wonder if online options can be harnessed for these communities to provide additional advanced and elective choices. 1 computer lab and 1 supervising teacher to cover 30-40 students learning different subjects, each of 6-8 class periods?

In a dense urban environment that has an effective public transit infrastructure, it becomes practical to send kids to a school that isn't necessarily the closest. But there's already a long enough line of idling vehicles to pick up and drop off even high school students.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: FINate on May 23, 2016, 11:34:42 PM
Many private schools are non-profits. As I mentioned earlier in the thread, I attended a private high school with a budget substantially less than that of the local public schools, and yet it had much better outcomes. If private schools, charters, or other options don't do a better job then parents can pull their kids and go elsewhere. Some charter schools have failed whereas others have succeeded. The charter schools in my area outperform the other public schools. YMMV. I don't understand what's so scary about giving ALL parents, regardless of wealth, choices for their kids education.

Well, here's two perspectives and they both mention some of the same things, though one is more positive about the concept than the other: http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough (http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough) http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html (http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html)

With charter schools, there is concern that special education students, students whose parents can't or don't support their academics (by going to the right meetings, participating in the charter school, etc), even students who just lose the lottery for admission will be overlooked. The more charter schools are set up, the fewer resources remain for the neighborhood public school, which HAS to accommodate all of the above students. There is also concern that the charters look good compared to the average in large part because they select the top, above average students (probably with above-average family support as well). Or because, as the first article criticizes at length, they drop any students who are not successful.

I think I agree with the author of the NYT article. These schools make sense in an urban environment, where between high population density and public transit (for older students), families can have access to a lot of schools. But in a suburban or rural area, it becomes impractical to provide that degree of choice; people just aren't willing to drive that far to take their kids to school; you already have to gather all the children from a large area to organize a (high) school with good offerings (AP courses, electives) and make it cost-effective. I wonder if online options can be harnessed for these communities to provide additional advanced and elective choices. 1 computer lab and 1 supervising teacher to cover 30-40 students learning different subjects, each of 6-8 class periods?

Forcing a kid to stay in a school for the benefit of the whole is a terrible approach. How would you feel if you were told you had to sacrifice your child's education for the sake of the community? The wealthy just pay for private or move to a different area. The urban locations are now some of the wealthiest, whereas many rural and suburban areas are the new poor. If the issue is with too much demand and too little supply (hence a lottery) then the solution is to increase supply until demand can be matched.

As for dropping unsuccessful students, I think the public schools should do this more often. This may sound harsh, but some kids simply don't want to be there and will do everything possible to avoid learning. The state is essentially providing expensive day care in these cases, and these students negatively impact the performance of others. I have no issue with having some schools designated for students who want to be there, who want to learn (even if their grades are not great), and then having other schools for kids who just need to be watched while the parents are at work.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: jinga nation on May 24, 2016, 07:20:25 AM
Many private schools are non-profits. As I mentioned earlier in the thread, I attended a private high school with a budget substantially less than that of the local public schools, and yet it had much better outcomes. If private schools, charters, or other options don't do a better job then parents can pull their kids and go elsewhere. Some charter schools have failed whereas others have succeeded. The charter schools in my area outperform the other public schools. YMMV. I don't understand what's so scary about giving ALL parents, regardless of wealth, choices for their kids education.

Well, here's two perspectives and they both mention some of the same things, though one is more positive about the concept than the other: http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough (http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough) http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html (http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html)

With charter schools, there is concern that special education students, students whose parents can't or don't support their academics (by going to the right meetings, participating in the charter school, etc), even students who just lose the lottery for admission will be overlooked. The more charter schools are set up, the fewer resources remain for the neighborhood public school, which HAS to accommodate all of the above students. There is also concern that the charters look good compared to the average in large part because they select the top, above average students (probably with above-average family support as well). Or because, as the first article criticizes at length, they drop any students who are not successful.

I think I agree with the author of the NYT article. These schools make sense in an urban environment, where between high population density and public transit (for older students), families can have access to a lot of schools. But in a suburban or rural area, it becomes impractical to provide that degree of choice; people just aren't willing to drive that far to take their kids to school; you already have to gather all the children from a large area to organize a (high) school with good offerings (AP courses, electives) and make it cost-effective. I wonder if online options can be harnessed for these communities to provide additional advanced and elective choices. 1 computer lab and 1 supervising teacher to cover 30-40 students learning different subjects, each of 6-8 class periods?

Forcing a kid to stay in a school for the benefit of the whole is a terrible approach. How would you feel if you were told you had to sacrifice your child's education for the sake of the community? The wealthy just pay for private or move to a different area. The urban locations are now some of the wealthiest, whereas many rural and suburban areas are the new poor. If the issue is with too much demand and too little supply (hence a lottery) then the solution is to increase supply until demand can be matched.

As for dropping unsuccessful students, I think the public schools should do this more often. This may sound harsh, but some kids simply don't want to be there and will do everything possible to avoid learning. The state is essentially providing expensive day care in these cases, and these students negatively impact the performance of others. I have no issue with having some schools designated for students who want to be there, who want to learn (even if their grades are not great), and then having other schools for kids who just need to be watched while the parents are at work.

+1. I grew up outside the US. If a kid didn't want to stay in school, the school simply told the parents that either the kid shapes up or ships out. In either case, the parent is responsible. It isn't the teachers', principal's, or the school board's problem, as they have to focus on the kids who want to learn. And corporal punishment was the norm, and not the exception, both in school and home (grandpa, mum, and dad).
Title: Re: The Secret Shame of Middle-Class Americans
Post by: mm1970 on May 24, 2016, 09:33:01 AM
Many private schools are non-profits. As I mentioned earlier in the thread, I attended a private high school with a budget substantially less than that of the local public schools, and yet it had much better outcomes. If private schools, charters, or other options don't do a better job then parents can pull their kids and go elsewhere. Some charter schools have failed whereas others have succeeded. The charter schools in my area outperform the other public schools. YMMV. I don't understand what's so scary about giving ALL parents, regardless of wealth, choices for their kids education.

Well, here's two perspectives and they both mention some of the same things, though one is more positive about the concept than the other: http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough (http://www.alternet.org/education/how-do-charter-schools-succeed-cutting-loose-students-who-arent-good-enough) http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html (http://www.nytimes.com/2015/11/22/upshot/a-suburban-urban-divide-in-charter-school-success-rates.html)

With charter schools, there is concern that special education students, students whose parents can't or don't support their academics (by going to the right meetings, participating in the charter school, etc), even students who just lose the lottery for admission will be overlooked. The more charter schools are set up, the fewer resources remain for the neighborhood public school, which HAS to accommodate all of the above students. There is also concern that the charters look good compared to the average in large part because they select the top, above average students (probably with above-average family support as well). Or because, as the first article criticizes at length, they drop any students who are not successful.

I think I agree with the author of the NYT article. These schools make sense in an urban environment, where between high population density and public transit (for older students), families can have access to a lot of schools. But in a suburban or rural area, it becomes impractical to provide that degree of choice; people just aren't willing to drive that far to take their kids to school; you already have to gather all the children from a large area to organize a (high) school with good offerings (AP courses, electives) and make it cost-effective. I wonder if online options can be harnessed for these communities to provide additional advanced and elective choices. 1 computer lab and 1 supervising teacher to cover 30-40 students learning different subjects, each of 6-8 class periods?

Forcing a kid to stay in a school for the benefit of the whole is a terrible approach. How would you feel if you were told you had to sacrifice your child's education for the sake of the community? The wealthy just pay for private or move to a different area. The urban locations are now some of the wealthiest, whereas many rural and suburban areas are the new poor. If the issue is with too much demand and too little supply (hence a lottery) then the solution is to increase supply until demand can be matched.

As for dropping unsuccessful students, I think the public schools should do this more often. This may sound harsh, but some kids simply don't want to be there and will do everything possible to avoid learning. The state is essentially providing expensive day care in these cases, and these students negatively impact the performance of others. I have no issue with having some schools designated for students who want to be there, who want to learn (even if their grades are not great), and then having other schools for kids who just need to be watched while the parents are at work.
Hmm.  This is a tough one though.

Our public school system struggles with a wide income disparity, and English language disparity, and ability disparity.  There's a lot of "white flight".  (And open transfers, but only if there is space.)

For example, there are some schools that are "magnet" for different groups.  The school my son attends (we transferred in), is a magnet program for the developmentally disabled/ special ed kids.  Other schools also have special ed kids, but we have more of them, and parents can opt to send their kids here - where we have more resources.

There is also a GATE (gifted and talented) magnet program at the wealthiest school.  Most GATE testing is done in 2nd grade, district wide.  There are 25 spots and a lottery for them.  (You can opt to join the lottery or stay in your home school).  The # of students increases to 30 from 3rd to 6th.

So.  What does this do, really?  Well, the magnet program really decimates some of the local schools, particularly ours, which is 1/2 mile away.  Many (most?) GATE identified students in our school transfer.  One of the parents (her boys and my son are both GATE and have not transferred) is making it her goal to disband the program.  It makes it *very* difficult for the students who don't transfer - as there is little incentive for the home schools to develop and maintain a program.  (They are too busy working on the EL's).

A site-based cluster program or site-based pullouts will do just as well.  Why do so many people transfer?  This perception that the school isn't great.  Because: test scores. But as I've said before, the test scores of our English speaking kids are AS HIGH as the test scores of the wealthier school.  But the overall school scores aren't great.  Why?  Well for one thing, they test the special kids, some of whom can't even hold a mouse.  And all of these scores are averaged into the school score.  The school with the GATE magnet program?  Scores are averaged in.  So 1/3 of all of the 3rd graders are GATE kids taken from ALL the schools in the district.  That artificially inflates their scores.

There's a difference between "holding your kids back" by having them in a dismally failing school, and keeping your kid at a neighborhood school that is JUST FINE.  I don't know what the heck these rich white kids are going to do when they get to middle school and they are the minority.

I was having a conversation with one of the 5th grade teachers (that I hope my son gets) next year, and she said it's sad how many students are "done" in 5th grade.  They've check out.  Completely.  At age 10.  Why?  I wish I knew the answer to that.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: galliver on May 24, 2016, 12:35:13 PM
As for dropping unsuccessful students, I think the public schools should do this more often. This may sound harsh, but some kids simply don't want to be there and will do everything possible to avoid learning. The state is essentially providing expensive day care in these cases, and these students negatively impact the performance of others. I have no issue with having some schools designated for students who want to be there, who want to learn (even if their grades are not great), and then having other schools for kids who just need to be watched while the parents are at work.

You say "some kids simply don't want to be there." Isn't that actually quite a lot of kids, probably? Except some show up on time and actually try because they know mom and dad want them to, they'll be celebrated/praised/rewarded for doing well, they may even realize the long-term consequences; and if they don't do well/try they'll disappoint mom and dad, and might get grounded, etc. And the parents provide all kinds of support for their kid's school day: they feed, clothe, and wash the kid and get them to school on time. If they have trouble, they might hover over homework time, set up a parent-teacher conference, attend all the meetings and fill out paperwork to get their kid into the charter, magnet, or otherwise "better" school if the opportunity arises.

But not everyone gets lucky with parents/caretakers like that, or even mostly like that. Some are barely keeping it together. And some aren't. Maybe the parents are fighting. Or unemployed. Evicted and homeless. Maybe a family member was shot or went to prison. Maybe the kid has an undiagnosed disability, a psychological trauma, or heck, just needs glasses, and no one has bothered to check. Maybe they've been told their whole life that they were useless and stupid and bad instead of being given help, and now they believe it. This shit happens to people. To kids. And worse stuff happens, too, I don't think I need to go into that. And you're saying, if they can't, at the age of what, 8? 10? 12 even? put these issues, fears, discomforts, difficulties aside and sit unnaturally still for hours, we should just...give up on educating them? And what happens when they get to 18 and can't read, write, count, or  follow instructions?
Title: Re: The Secret Shame of Middle-Class Americans
Post by: ShoulderThingThatGoesUp on May 24, 2016, 01:39:15 PM
I grew up very comfortable and found school boring, miserable, and enervating - and my teachers liked me, and I never had any problems with the material! I can't imagine how unpleasant school must be for kids with challenging home lives or who have to work harder to learn the curriculum.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Warlord1986 on May 24, 2016, 01:43:38 PM
As for dropping unsuccessful students, I think the public schools should do this more often. This may sound harsh, but some kids simply don't want to be there and will do everything possible to avoid learning. The state is essentially providing expensive day care in these cases, and these students negatively impact the performance of others. I have no issue with having some schools designated for students who want to be there, who want to learn (even if their grades are not great), and then having other schools for kids who just need to be watched while the parents are at work.

You say "some kids simply don't want to be there." Isn't that actually quite a lot of kids, probably? Except some show up on time and actually try because they know mom and dad want them to, they'll be celebrated/praised/rewarded for doing well, they may even realize the long-term consequences; and if they don't do well/try they'll disappoint mom and dad, and might get grounded, etc. And the parents provide all kinds of support for their kid's school day: they feed, clothe, and wash the kid and get them to school on time. If they have trouble, they might hover over homework time, set up a parent-teacher conference, attend all the meetings and fill out paperwork to get their kid into the charter, magnet, or otherwise "better" school if the opportunity arises.

But not everyone gets lucky with parents/caretakers like that, or even mostly like that. Some are barely keeping it together. And some aren't. Maybe the parents are fighting. Or unemployed. Evicted and homeless. Maybe a family member was shot or went to prison. Maybe the kid has an undiagnosed disability, a psychological trauma, or heck, just needs glasses, and no one has bothered to check. Maybe they've been told their whole life that they were useless and stupid and bad instead of being given help, and now they believe it. This shit happens to people. To kids. And worse stuff happens, too, I don't think I need to go into that. And you're saying, if they can't, at the age of what, 8? 10? 12 even? put these issues, fears, discomforts, difficulties aside and sit unnaturally still for hours, we should just...give up on educating them? And what happens when they get to 18 and can't read, write, count, or  follow instructions?

My mother was a teacher for twenty odd years and she always said it wasn't the kids who bothered her, it was the parents. The truth is: teachers aren't social workers. They are trained to teach, not solve problems caused by generations of dysfunction and/or lack of parental attention. They cannot and should not be expected to do so. It isn't their job.

I went to a high school reunion a few years ago, and it was largely planned on facebook. Looking at the questions asked repeatedly, the nonexistent grammar and punctuation, and the lack of spell check, it is pretty obvious that people are already graduating without knowing how to read, write, count, or follow instructions.

My mother's job would have been a lot less stressful if the public schools had been able to remove students who didn't want to be there. My education would have a lot less violent if the schools had removed the dysfunctional students who didn't want to be there.

I have sympathy for children who are going through hell, but there's no way the schools can be expected to fix that. If the problems you listed are causing the students to act out and behave so inappropriately that they can't function in a normal school environment, then social services needs to get involved.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Making Cookies on May 26, 2016, 09:16:02 AM
My mother's job would have been a lot less stressful if the public schools had been able to remove students who didn't want to be there. My education would have a lot less violent if the schools had removed the dysfunctional students who didn't want to be there.

I have sympathy for children who are going through hell, but there's no way the schools can be expected to fix that. If the problems you listed are causing the students to act out and behave so inappropriately that they can't function in a normal school environment, then social services needs to get involved.

That's why college was more interesting to me. Most of the folks there wanted to be there. I can see how the kids who don't want to be in school are impacting my oldest. They seem to be eroding his interest in classroom learning b/c of the interruptions. Unfortunately his grades aren't good enough to get into the Honors/AP track where more of the kids might be interested in being in school.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TomTX on May 31, 2016, 03:55:30 PM

I was discussing this with my grandparents a few months ago.  They know young people struggling to get by, but buying TV's and entertainment systems instead of saving money when they get gifts or tax returns.  They have 2 cars instead of 1 (but I live in a rural area and I'll be damned if a SAHP is going to be home with kids without a means of transport, so I'm a big supporter of 2 car families....anyway, tangent) and a few gadgets.  And I point out that yes, a TV is $500 once and that car is $125 month.  But they could save alllll that money and not come close to paying for health insurance if (one of) the parent(s) doesn't have a good deal with it at work.  Let alone if one of them also has student loan payments and didn't take the time to switch to a low payment plan or if the loans are private because they went to a technical training school.

Exactly! $500 didn't even cover my insurance premiums for the month, let alone deductible or out of pocket max (and that's not even counting out of network max - a separate, insane amount). I think a lot of people that pooh pooh young families' expenditures must get a great deal on insurance through their jobs. I know my in-laws and parents were both like that.

I'm in the ACA family trap. My employer covers my insurance, and nominally half the "Family" insurance - but whether it's one kid or a dozen, you pay the same. I've got one.  Plus significant copays, etc when actually using the insurance.

It would actually be cheaper to drop the family side of the plan and get a subsidized ACA Silver plan for them. But I can't - because my employer pays for MY insurance, somehow the family insurance is magically defined as affordable, no matter how overpriced it is.

If we were really mercenary,  I suppose we should just get legally divorced and put my wife and son on subsidized ACA while continuing to live together, and just not tell anyone.  That would save thousands of dollars every year, easily.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TomTX on May 31, 2016, 04:05:09 PM
I would like to know how much their family makes and what they spend it on. How much on the wedding they tapped the 401(k) for.

I don't have any children or nieces/nephews. But is it really necessary to send your kids to private schools?

Well... the article author made sure to live in an area with schools bad enough to "Require" private school until his kids were ready for college, so at that point he moved to a very expensive area with great schools, so he would pay more taxes and get no benefit from them.

This guy was an established writer by that time with all sorts of cred. He could have moved literally anywhere in the world. Instead of choosing somewhere reasonably priced, he chose ever more expensive and impractical places to live. Then sent a daughter off to a $65k/year school to get a $25k/year social worker degree.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: TomTX on May 31, 2016, 06:00:54 PM
The author was on public radio's Marketplace to discuss the article.  Sadly, he had nothing to say about what steps he was taking to try and improve his situation. The host commended him for his honesty in disclosing, but I think was a little surprised that the author remained pessimistic about his financial situation. 

That was very disheartening to hear.  I very much hoped that the author would reveal that having faced his financial situation, he was taking some, any, steps to improve or that he would have suggestions for others in a similar situation.   

Oh, he was all 'woe is me' on that Marketplace interview - I caught most of it while driving one day. He also shucked and jived around the truth - when a caller said he was too focused on the "trappings of wealth" , he was back to his crap about not being wealthy "oh, my car is 40 years old - that's not wealthy, oh I can't afford to fix my roof - that's not wealthy. I haven't taken a vacation in 50 years, that's not wealthy" while totally avoiding the actual accusation of the TRAPPINGS of wealth:  private school for kids, expensive colleges for kids, expensive weddings, living in the Hamptons in a big house, etc.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: StarBright on May 31, 2016, 07:51:08 PM
We are incredibly frugal and savers and we had three years in a row with medical emergencies [...] then our cat got sick [...]

In the rural area where I grew up it was very common to have various animals around the house. If a pet got sick, it was put out of its misery - quickly and painlessly because the owners cared. Buying medical care for a pet (as opposed to expensive livestock) would have been considered insanely extravagant unless you were a millionaire.

Most people here are better off than my family was when I was a child, so spending more than we did on pets is probably a luxury that's not unreasonable for many. But to consider pet-related expenses an 'emergency' strikes me as odd. As MMM himself has pointed out, pets are optional (http://www.mrmoneymustache.com/2015/09/07/great-news-dog-ownership-is-optional/). Pets (not service animals or livestock) are a luxury just like an expensive hobby. If it jeopardizes your savings then you aren't incredibly frugal.

Just reading more of the thread and saw this comment. Not gonna lie- the comment irked me. Sure pets are a luxury, but in my early 20s I had a friend who couldn't find a no-kill shelter who would take her kittens (she had unknowingly adopted a pregnant cat). So I took one. I loved that cat a lot; over many years he added to my family's happiness in a big way and was my four year old's best friend. FWIW - it turned out the cat had cancer and since he had had a long, happy life we opted to euthanize him rather than put him through expensive treatments that might not work. IF you asked me to adopt a pet today I probably would not, but no way would I get rid of a beloved family pet just because I was getting serious about saving more money.

But, perhaps more importantly you basically ignored the list of very real expenses that drained our emergency fund over a period of years (emergency surgeries, high medical premiums and deductibles, storm damage, appliances dying, 13 year old (paid for) vehicles dying etc.) and then dismissed my comment because I took a cat to a vet. I feel like this touches on the victim blaming that happens when people discuss issues of income inequality. I can list ten events that jeopardized our financial health but if one is seen as not legit, the other nine don't seem to matter.

In any case, I have really enjoyed reading everyone's thoughts on the initial article. Lots of discussion to be had :)
 
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Cassie on June 01, 2016, 04:55:41 PM
I too find it ridiculous when some people tell  others to get rid of their pets, etc. They bring a lot of joy, companionship to people's lives. If people are single or elderly it can really be important. Also petting an animal lowers BP.
Title: Re: The Secret Shame of Middle-Class Americans
Post by: Metta on June 01, 2016, 05:40:22 PM
I too find it ridiculous when some people tell  others to get rid of their pets, etc. They bring a lot of joy, companionship to people's lives. If people are single or elderly it can really be important. Also petting an animal lowers BP.

When people take on obligations to other beings, their welfare becomes a responsibility. It makes no more sense to me to advise someone to get rid of their pets for financial reasons than it does to get rid of children who are also financial burdens. In most cases (at least in the developed world) both children and pets are voluntary financial burdens but once you take on this responsibility you have to behave as a moral actor, not merely as an economic maximizer.