A recent survey of Black Friday shoppers revealed that 65% of those interviewed feel they are living paycheck-to-paycheck, up from 61% in 2012. I sent the story to a friend and she was dumbfounded. Her response: “Doesn’t that include a large portion of the middle class!” In other words, how could middle class people be so close to the edge?
The most obvious answer is that a majority of American don’t have significant cash savings that would cover them if they didn’t get their next paycheck.
That is why the term middle class is really misleading – because it refers to the level of consumption people are able to maintain as long as there is a steady paycheck. Consumption levels on similar incomes vary greatly – one family might leverage lots of debt so they have two new SUV’s, a renovated TV-stereo room in the basement, and a child at a private college, while another might not like being in debt, buy used cars, and sends their child to a state university.
The bottom line for most of these families is they need to keep getting that paycheck. The new working class is everyone who, if they lost their job tomorrow, would face a difficult financial squeeze. That is certainly 2/3 or more of the population.
The term Middle Class was invented in the 19th century and meant a person who has assets other than their ability to work to make an income – the owner of a shop or other small business that had equipment or land as an asset or income from the work of a handful of employees. Their social class was in the middle, between the owners and workers who made up the rest of society.
In the middle of the 20th century, the golden age of prosperity in America, middle class came to mean working people who were buying homes, cars, and other items that were once considered luxuries.
However, that loose definition was based on the now out-dated notion that every person who “worked hard and played by the rules” (President Clinton) could find a job that paid well enough to sustain that life style. With:
Unemployment still over 7%,
More than four million people dropping out of the workforce since 2009 because they have given up looking for work, and
People now have higher odds against finding or keeping a decent paying job.
The raw truth is that most folks are working people, dependent on their job and their next pay check for the continuation of their middle class lifestyle. One lay-off, one business bankruptcy, one serious illness in the family, one car accident, one bout with alcohol or divorce, and almost any middle class family can take a tumble. In that way, the middle class is not so different from the working poor, who also live on the edge, from paycheck-to-paycheck.
So this year, here is a new way to use your holiday spirit throughout the New Year. Go to a mall or another busy public place and look at the shoppers and look at the workers in the stores and have a sense of compassion and connection. All of us working class folks – white collar and blue collar – are out on the edge together.
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