A live able wage for the working classes means:
1. You can rent a safe and sanitary apartment with heat, light, water, no leaks, functioning appliances, and sufficient space for you and your family.
2. Food, sufficient and healthful, for you and your family prepared in your own home by you.
3. Clothing, modest but sufficient, repaired as needed, sometimes second hand, sometimes from Target or other discounters.
4. Public k-12 education and child care, if needed.
5. Able to afford public transportation, if this suffices for employment and to get your kids to school where you live, and a modest vehicle and gas and insurance, if public transportation does not suffice.
6. Median payments into social security.
The Hyatt Housekeepers, at $20 an hour could do 1-6 — their replacements at $8.50 an hour cannot. Ergo – my term of “Hyattization of jobs” for corporate greed where earning a sustainable profit has been replaced by earning maximum profits even if the earning of that maximum profit renders life barren and unbearable for your fellow citizens and your own profit not sustainable.
A live able wage does not mean: Home ownership, a new vehicle, private school educations for your kids, and a fat 401k.
Middle class lifestyle means;
1-6 above, plus:
1. Ability to purchase and maintain a home through home ownership
2. Ability to eat in restaurants as desired, certainly at least once a week;
3. Clothing, often designer or upscale;
4. Can choose between private or public education without relying on scholarships;
5. Able to afford a new or used vehicle as one chooses;
6. Social security plus a pension or 401k
Once upon a time jobs in retail sales had been sufficient for working class lifestyles, but not middle class; good manufacturing and skilled trade jobs once provided middle class lifestyles as did public employment such as teaching or public works.
Retail employment, domestic employment (maids, housekeeping, yard work, landscaping) never provided a middle class lifestyle unless one worked multiple full time jobs, say, and both parents did so.
Self employment can yield the middle class lifestyle but often requires years of working 60 or more hours a week to do so. Examples include restaurant owners, yard work company owners, home improvement businesses, lawyers (yes that is a long hours worked profession),hairdressers, musicians, doctors (another long hours worked profession actually), accountants or book keepers.
Was it the “MBA philosophy of maximizing share holder income” attributed to Harvard Business School and others that lead to such greed in corporate leadership, increasing differential in incomes so that CEOs can live like the aristocracy of pre-revolutionary France, and slash and burn profit taking as to render both the working class income and lifestyle and middle class in danger of extinction?
One is tempted to quote Louis the XIV who is reported to have said
After me, the deluge!!!
bluefolkie says
I’ve been thinking about this, and maybe I’m just being an old-fashioned curmudgeon, but I’m not sure I agree with you about items 2-5 on your second list, and I would add a few different items.
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p>2. Going out to eat? I’m not so sure. Maybe at a neighborhood or chain restaurant, but likely not “as desired.”
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p>3. Designer or upscale clothing? Maybe if purchased at an outlet mall. Middle class lifestyle involves a lot of Kohl’s, Sears, and bargain shopping for decent, serviceable clothing.
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p>4. Private education without scholarships? I don’t see how this math works. Maybe public or parochial education.
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p>5. Afford a new or used vehicle as you choose? Maybe after 100k miles, and maybe a vehicle that works as good, reliable transportation to meet family needs. I’m thinking mini-van or practical and economical mode of transportation, not Audi, Lexus or other premium brand.
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p>I would add three items to your list.
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p>1. Health insurance to cover catastrophes and some level of basic care.
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p>2. A savings account, with money in it. The old-fashioned middle class lifestyle wasn’t paycheck to paycheck.
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p>3. A modest family vacation annually. More like renting a cottage at the shore or the lake rather than a cruise or even a trip to Disney.
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p>The middle class I grew up with wasn’t about things, but was about goals. I fear we’ve collectively lost sight of that idea.
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p>P.S. What would you do about cable, internet and cell phones? I can’t believe how much money those cost every month.
patrick says
I think you can still have all three for relatively cheap.
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p>You can ditch cable and go with a over the air antenna (got one as CVS for $10). It clears all the basic channels. That eliminates the cable bill entirely.
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p>Internet is cheap if you go basic. Unless you have some need to download gigabytes of data real fast, anyone can get by with a low tier cable modem plan. $30 a month max?
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p>If you don’t care about frills, I found Virgin Mobile to be a great way to save money. I had a cell phone that was just a cell phone and it cost maybe $30 every 2 months or so.
seascraper says
I don’t think you’re going to get to a middle-class lifestyle by giving up noodles in your soup and scrimping on the discovery channel. The big costs are housing, transportation, education. To have some options in those areas, given our current geography, you need to make at least $250K/household, and at that point you’ll be getting by.
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p>That’s why I have said many times that the tax increases on those over $250K are hitting the middle class.
stomv says
in an expensive neighborhood in an expensive town, in a home we own on a 15 year mortgage, and we make well less than half of $250k. Nobody would consider us south of middle class.
seascraper says
Look at her list:
Own a home
Food/clothes
Cars
Education
Savings
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p>Start with $250K
First take off with taxes… you’re probably paying $70,000 in federal, state, payroll. Down to $180,000
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p>For instance, the median home price in Brookline is a little less than $600,000. Right there you need an income of $200,000 to qualify, and you probably have a mortgage of $50,000/year. Add in another $15,000 for real estate taxes, maintenance, insurance.
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p>Down to $115,000. Two cars: probably $25K/year including maintenance, insurance etc. Down to $90/year
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p>Private school for two kids: $40K/yr. Down to $50K
Save for college! $20K/year
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p>You’re left with $30K year. Now you haven’t gone on vacation, saved for your own retirement, you don’t have a second home, you haven’t paid medical bills. You haven’t even bought your food or your clothes!
bluemoon4554 says
You took the extremes of every option of someone living life 100% or close to it, in the fast lane. You pretty much described the lifestyle of the typical “successful” person/couple that ended up having their home foreclosed on after 7 years.
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p>There are far cheaper alternatives in suburbs within 30 miles of Boston than living in la de da Brookline. Unless in this scenario they are buying a new car every other year, face major repairs every 2 months, and have an 12 miles to the gallon gas guzzler – that cost estimate is wayyy off. Now if you choose to live in a nice suburb south of Boston – the public schools are not bad, you save 40k right there, and if you feel so strongly about the benefits of private school – have them go k-8 in public and 9-12 in private – HS is only time it really matters. Don’t give me the early development crap – if your child isn’t doing well in the key stages of “early development” there’s problems at home with the parents, not entirely the schools. Get a tutor in the k-8 years if you choose. Still far far cheaper. In terms of saving for college, you do have to save, but I hate to break it to you, kids today do use student loans, at least 20K in the standard federal loans.- and its their responsibility to pay it off as working adults with their full time salaried job. If you want your kids to come up right, with a good work ethic and perspective, you would like them to work a part time job when they turn 16, chip in some of their hard earned dollars towards their own college education. Every bit helps.
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p>Call me overly modest, call me boring, call me cheap, but I wont be the one with my house being foreclosed on and unable to pay the basic monthly bills when something unexpected pops up.
seascraper says
So don’t live in Brookline, then commute an hour each way. That’s your compromise? Don’t save for college, so your kids have $200K in loans. Great ideas. Get a dumpy car. Do you have a wife?
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p>You are a typical adapter in that you just accept your diminished expectations and standard of living and display it as moral frugality. And you are a typical puritan in that you pick whatever you don’t need, then decide that nobody else needs it either.
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p>It may surprise you to know that 40 years ago the life I describe was the widely expected middle class life. That’s what Amber put out there, I’m only answering the question. She could never go that far because she might find out that the people she wants to soak are just middle class.
stomv says
Internet is about $30, and Netflix is another $15. For under $50, I see all the news, comedy shows, sports, movies, sitcoms, tv dramas, and documentaries I like. When I want to watch ’em.
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p>Cable, and it’s $60-$100 a month, are so 20th century.
stomv says
Number (6) in the initial list is nonsense. The claim that “live able wage” means “median payments into social security” would require that fully half of folks contributing to social security are doing it on a part time or seasonal basis. Look, livable wage isn’t median. It’s south of that in a society where most people who are employed are working full time. I do agree with 1-5.
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p>As for “middle class”, I think bluefolkie’s much closer to reasonable.
seascraper says
How much money do you think you have to make every year to afford the middle class lifestyle?
centralmassdad says
If the context is a “we’re all in this together; look how you aren’t really even middle class anymore, so vote Democratic” I seem to land in the working class.
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p>If the context is deciding who is “wealthy” as in “the ‘wealthy’ should pay more taxes” then I seem to be wealthy.
somervilletom says
There is an upper limit to what anyone can consume. Not buy, consume — vacations, meals out, clothes, shoes, private schools and so on. Virtually all big-ticket expenditures — homes, cars, boats, artwork, whatever — are themselves fungible assets. Purchasing these, therefore, is an investment decision rather than an act of consumption.
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p>There is, therefore, a reasonably well-defined maximum spending threshold for each household. When a household’s after-tax income from investments exceeds that threshold, then that household has moved from “middle-class” to wealthy.
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p>Until that threshold, the income-earners in that household are essentially wage-slaves.
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p>The wealthy very much prefer an economy and culture where the wage-slaves bicker among themselves about who makes more and who makes less, what kinds of income are better and what kinds worse, all that sort of thing. The wealthy prefer that because it keeps the riff-raff distracted from more fundamental and threatening questions like “is this how I want to spend my life”. The GOP would much rather we spend our time passionately arguing with each other about the “immigrant problem” or the “abortion issue” than asking “where are benefits from the wealth we collectively create?”.
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p>The freedom that comes with wealth is the realization that the foundations of life are essentially independent from how an individual chooses to spend a particular hour, day, week, month, or year.
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p>That freedom comes when residual income exceeds spending. A striking characteristic of our consumer-oriented society is that the base level of family spending has been ratcheting upwards year after year, generation after generation. We saw this in the transition from an agrarian to an industrial society in the early twentieth century. We see this in the ever-increasing (and self-perpetuating) spiral of larger homes, bigger cars, more expensive toys, and so on.
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p>Consider a “typical” suburban family of four today with two teenagers. That family “requires” five (one per person and one “guest” room that doubles as a “study” for mom and dad), not two or three bedrooms. It “requires” two or three bathrooms, not one. It requires four cars, not one. It requires garage space or parking and a driveway for those cars. It “requires” a snow-blower or plowing service to clear all that asphalt. It “requires” fossil fuel to keep those cars running (whether directly through gas or indirectly through electricity to charge their batteries). It “requires” taxes to pay for all roads those four cars “need” to go all the places that family needs to go to in their futile attempt to sustain their unsustainable lifestyle. The list goes on and on.
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p>The underlying lie (and it is a lie) of this paradigm is that increasing consumption results in increasing happiness. The reality is that increasing consumption results in increased wealth for those above the threshold, and ever-increasing misery for everyone else.
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p>These intermediate thresholds that we are so earnestly discussing (and I measure myself the same way) distract us from the real truth: if our spending exceeds our residual/passive income, then we are middle-class.
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p>An economic system (including tax structure) that blocks, rather than encourages, most individuals from making the transition into the “wealthy” class is, fundamentally, just as exploitative as any alternative economic system has ever been.
seascraper says
I think you are onto something, however as a city dweller you know that the alternatives are not as easy as you describe.
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p>As long as the standards of behavior are so low (mostly around basic drunkenness, but also including noise, wild west with regard to cars, masturbators on the T) then most families with kids are going to be moving out of the dense urban settings rather than in. Then they need all the cars and of course the snowblower to get them out in time for work, school etc.
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p>A workable urban alternative would mean a Giuliani-like crackdown on many urban offenses. Are you ready for that?
somervilletom says
A more workable “urban alternative” is to return to city dwellers a portion of the thirty five percent of the nation’s wealth currently held by the top one percent of the population (by wealth distribution). Not income, wealth. Are you ready for that?
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p>Here’s an “urban alternative” for you: Well-maintained urban schools with top quality well-paid teachers. Well-maintained streets and walkable sidewalks with similarly well-maintained parks and green space. Events where even teenagers can hang out and have fun. Rents and property prices low enough that mere mortals can afford them. An economy where moms and dads work in the same neighborhood as their children, a neighborhood where the proprietor of the pizza shop where the teenagers hang out is friends with their mom and dad — and where all parties concerned know that.
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p>There are lots of “workable urban alternative” paths. All of them require that we address the unsustainably extreme concentration of wealth that our right wing has currently created for us.
nickp says
35% controlled by 1% is obviously too much wealth controlled by such a small group.
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p>So, for that perfect society, let’s make it such that only 17.5% of the wealth is controlled by that same 1%. We’ll pass a state law requiring that the 1%, account for their wealth, and send in a check to the State for redistribution by the state, to the bottom 50%, heretofore known as the Commoners, who contol only 2.5% of the wealth.
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p>
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p>Making some back of the envelope assumptions about Massachusetts wealth distributions, since the population of the State is about 6.5 million, that means about 65,000 people will gleefully relinquish wealth to 3.2 million Commoners.
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p>And, with the same back of the envelope assumptions, those 65,000 people control on average $5.5 million in net worth. The number appears debateable, so if you find differently, sure, let’s stipulate your finding of average net worth. But for now, assume the system will distribute $357.5 billion from 65000 people to 3.2 million people, or $111K to each Commoner.
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p>Ignore the possibility that wealth concentration may or may not be causing problems in society and that it’s not historically significantly out of alignment:
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p>
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p>Ignore the political unpopularity of i) taking from the wealthy (a voting and now unhappy faction), and giving to the poor (a non-voting, but now happy faction), and ignoring the middle, who will now wonder aloud in tea-partyish, WTF.
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p>Ignore the tax planning that will explode as the wealthy now seek to appear to be not so wealthy.
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p>Ignore the moving vans leaving Newton, as the 1% wealthy realize they can move just over the border and save millions per year.
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p>Ignore the effect on real estate values, as wealthy seek different locations.
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p>Ignore the simple fact that if you redistribute $111K to a person, that much like a lottery winner, money won’t buy him happiness.
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p>Ignore all that, and you’ve got a great idea here.
somervilletom says
You put words in my mouth and use them to build strawmen that you then knock down.
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p>Who said anything about taking all the wealth?
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p>Suppose, for the sake of discussion, that we agree that the wealth held by the top one percent is $357 B (your number).
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p>If Massachusetts were to take one percent of that number, $3.5 B, the deficit is gone. Suppose that one percent was reinvested in restoring the public infrastructure and services that have been decimated in the last three decades.
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p>Suppose that that $3.5 B was put back into circulation in Massachusetts — building businesses, buying consumer goods and services, sustaining the quality of life that attracts people to Massachusetts in the first place.
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p>The excessive concentration of wealth is strangling the life out of Massachusetts. I think we should do something about that.
nickp says
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p>No one. Certainly not me. My post suggested 1/2 of the wealth. But sure, assume your 1% wealth tax. A tax on balance sheets of wealthy individuals.
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p>
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p>Why do you say it should be put “back” into circulation? Unless the wealth is in the form of coins in a vault, it’s already in circulation in the form of investments in stocks or bonds and therefore capital to a business, or else in a Bank and therefore available for lending.
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p>
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p>And how would you know that? Faith?
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p>Do you supppose that your wealth tax would cause wealthy to move? As a similar tax did in New Jersey?
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p>p.s. Love the “decimated services” hyperbole! Throw in some “crumbling roads and bridges” and “people are suffering” for the hat trick.
centralmassdad says
I have been seeing this crop up a bit lately. I think it is part of a buzzword argument for increasing taxes on the wealthy, because the wealthy “hoard” wealth and keep it out of circulation, thus somehow harming the economy.
somervilletom says
I did, did you?
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p>The roads and bridges are crumbling, especially in comparison to their state in 1980. I’m sorry you don’t like to be reminded of that reality. Were you here then? I was.
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p>Were twelve-foot sections of I-93 bridge pavement collapsing during drive-time in 1980?
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p>
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p>You wrote:
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p>Tell it somebody who has tried to get capital for a business lately, or tried to get a small-business loan. The fact that the banking industry is, in fact, sitting on the bailout funds rather then lending them (while continuing to pay lucrative executive compensation packages, of course) is an important reason why the stimulus is less effective than hoped.
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p>I agree with you that it is difficult or impossible to accomplish this change state by state. It should, instead, be done at the federal level with a portion of the funds flowing back to the state(s) where the wealth is retained.
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p>As to whether the dramatically increased concentration of wealth is harming the rest of the economy, I’ll leave the defense of that claim to folks like Paul Krugman who have more expertise than me. I will, however, share this gem of a graph from Dr. Krugman:
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p>
smashrgrl says
The comments above about 401Ks and Social Security to me are a bit off.
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p>I think a livable wage should involve being able to contribute to a 401K at the matching level of your employer, if offered, (for people who don’t make much money, this is a very easy way to increase your compensation from your employer). Social security is not going to match what you’re paychecks were, and in my opinion, everyone should go to http://www.ssa.gov/estimator/?h every few years to check to see what your estimated social security payout will be. It’s likely to be less than you think.
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p>I also think you should be able to afford a basic life insurance policy and disability policy. These are three things that provide basic financial stability in the events of retirement, death, or disability. A non-livable wage is one that if you lose it, you or your immediate family members become destitute and/or have no safety net.
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p>I think this falls right in bluefolkie’s #1 addition of health insurance. The ability to have basic safety nets makes your income supportive of a modest, not consumerist, lifestyle.