Middle Class Bubble

[craigerv]

I was about to say the same thing FWM. It deals with percentages so that 11% the poor pay for utilities is still much less money than the wealthy pay overall, but the point is that it costs the poor much more than it does the wealthy. As for how the poor spend their money (cigs, beer), I actually read a great article about a guy who grew up poor and the bad habits that he still struggles with because of it: The 5 Stupidest Habits You Develop Growing Up Poor | Cracked.com. I have often felt the pull to harp on the poor for making bad decisions because I work really hard to not make bad spending decisions. But look what this guy says about not being able to save extra cash:

"When a windfall check is dropped in your lap, you don't know how to handle it. Instead of thinking, "This will cover our rent and bills for half a year," you immediately jump to all the things you've been meaning to get, but couldn't afford on your regular income. If you don't buy it right now, you know that the money will slowly bleed away to everyday life over the course of the next few months, leaving you with nothing to show for it. Don't misunderstand me here, it's never a "greed" thing. It's a panic thing. "We have to spend this before it disappears.""

It is foolish to think this way, yes. But it is amazingly difficult to operate on a tight budget while saving money. If you're smart you can do it, but many of the poor are not educated enough to do this, especially not on their own.

 

[Frixxxx]

The issue I have with this bubble discussion is it always goes back to taxes.

There are many factors that create a middle class. Many of those are culturally based. When middle class was "invented", it tried to show where the "bourgeois" were ruining the world by being the overseers of the rich to control the working/poor class.

But when the U.S. drew up a constitution, it paved the way to ensure that things were fair across the board for everyone to have a chance to do something in their society. The problem was that we didn't put our money where our mouth was. We still had slavery, indentured servitude, and a multitude of one-sided economical/social favoritism.

Usher in the industrial revolution. The unskilled worker needed more training and more education to handle the technology that was being created. Emphasis on education became paramount. Also, the working class needed help on ethical and safe environment to be productive. This allowed a "middle class" to evolve rapidly. It also allowed for smaller businesses to spring up in support of the economic growth.

But, the core of the family at this time was solid, man/wife centric. Social ladder was limited to how much one earned and how much the invested in their future (to include offspring). Then with equal rights and desegregation, the opportunities for multiple income earners allowed for a larger pool of possible employees for companies to choose from. Then two incomes in the family caused another class to emerge. This is why I posted the triangle-to-diamond representation of the class system. It is now almost a requirement to have dual incomes to stay above costs of what is happening in the economy.

Meanwhile, the entire concern of the poor was still a thought and care of our society. We created programs to support them in a fashion to ensure they had some form of existence rather than having no hope at all.

So, when the economy goes through it's expansion and decompression, it has to give. Mainly done at the middle of the pack, because it is inflated or bubbled. Unfortunately, the economy is a living organism. It's healthy/sick at times. If we review the past, we'll see a lot of similarities from the Great Depression happening to our current system. This has put a generation at risk and it is painful. It has taken people from able means and pushed them into a position of survival. Our social programs, designed when the means to support them are available are now in the same position as the very same people they support.

Now, yes, based on economic situation (regardless of who's at fault) those who were lifted on the economy are now being pushed back out. So, the bubble has popped, and we are all scrambling to blame the contributing factors. But, if those factors weren't manipulated in the first place then the middle class would not have grown and our economy would be standing still.

 

[alevin]

Aitrus,


As for making the assumption the bottom group gets their $$ from the gov't...is that just a guess?
Because the bottom number lines up pretty well with the minimum wage...the "working" minimum wage.

As for food numbers...14.9% for poor (near 20K) that is about $2,980.
For the rich (lets use bottom number of 150K... 10.8% is about $16,200.
Guess that the wine snobs are buying high end Burgundies

Here's the reality I am exposed to everyday-the people on the lowest rungs of the ladder-I'm talking about young families with at least one partner working fulltime or near-fulltime at Walmart-would be spending far greater percentage of their incomes on food than what is shown in that article-IF they did not use food stamps AND have access to FoodBank supplies every single month. I support our statewide foodbank, but also our local Salvation Army, don't send donation $ too many other places these days.

and I still get hit up for assistance with utility bills 1-2x/year by my disabled vet neighbor on SSI who also uses foodstamps and goes to the foodbank-has to hitch a ride with the young working Walmart family next door to get to the foodbank each month. that's reality for the lower 5th.

 

[craigerv]

Now, yes, based on economic situation (regardless of who's at fault) those who were lifted on the economy are now being pushed back out. So, the bubble has popped, and we are all scrambling to blame the contributing factors. But, if those factors weren't manipulated in the first place then the middle class would not have grown and our economy would be standing still.

I agree with you Frixxx. I think most of the time we humans are very short-sighted. We can remember all the times we've lost but quickly discard as commonplace the things we've won. So we get used to the growth and start planning using it as a baseline. I think many middle class families have simply become accustomed to the wealth they have enjoyed without realizing that it is fleeting. I am hopeful, however, that the difficult financial times we're in will grow a new generation of folks who will make smarter choices about the "things" they need/want.

 

[Birchtree]

All I want is a Dow 17,000 and I can step up to upper middle class. I'm currently in the distribution business of providing superlative bull manure to anyone with enough courage to accept a truck load.

 

[ILoveTDs]

All I want is a Dow 17,000 and I can step up to upper middle class. I'm currently in the distribution business of providing superlative bull manure to anyone with enough courage to accept a truck load.

So 17,000 is your exit point. I always wondered what would be enough for Birch .