May 05 2009
The Dropping off of the Lower Class
Anyone who works with people whose income is under $25,000 will not be able to deny that the United States is basically subsidizing their existence. There is heating subsidies, free lunches at school, foot stamps and medicare.
One couple, who have been struggling with the basic job layoff economy related the simple reason why they do not have health insurance. With a $400 a week paycheck (after taxes, $12.00/hour), half the income is needed for rent and utilities, the rest is for mandatory car insurance, and other expenses. A good chunk of the paycheck is for paying off the credit card expenses that were acquired when the main bread winner fell and broke his foot. There simply is no extra money for health insurance.
This couple is fairly similar to other members of the lower class. They have fallen on hard times because of a medical situation and are struggling. Other such members of the lower class include widows who have been living off of social security and state medicare. One director of a local Salvation Army privately confessed to seeing a woman buy a bag of dog food, but owns no dog. Such charities work daily to put out vegetables and other donated food to help along those who don’t have the money to put food on the table.
Now that the lowest class can not live without government help, it is getting more and more surprising how many lower middle class folks are slipping in that range, too. One couple, who used some inheritance money to buy some small investment real estate, found themselves in a quandary after the husband had a heart attack. Although the medical bills were picked up by the Veteran’s Administration, the loss of income during the time of convalescence has left the family struggling. On top of that, no one can buy their real estate because of a credit freeze. Layoffs and slowdowns have hit this family home. They haven’t had steady income for three years and slowly their assets are slipping away.
What happens when the lower and middle class begin to slip into the range of being eligible for government assistance? The answer is simple math: more money must be taken from those making more money, and this is an unsustainable tax burden.
The answer is not in more and more government money. Instead, the answer may lie in eliciting the help of organizations such as the Consumer Credit Counseling Service and similar programs. The federal government would do well to encourage the development of a Job Development organization. Such a program could help people organize family members to afford new training for the breadwinner. Grants for small training programs would be better spent if it could help people get a job that makes a decent living quickly, rather than putting the money into more and more utility bills.
As a nation, the United States cannot afford to ignore the economic changes that are happening to the lower and lower middle class. Many of these people have not had money for fancy televisions or recreational vehicles. The majority have struggled for years. Continuing to make them dependent on government handout is not a good long term solution.
There is historical precedent for the devastating impact of the lack of smart government planning to help the lower classes rise to their potential. The powerful Roman Empire declined after too many social programs carried the populous. Neglect of the lower class caused the revolutions in both China and Russia. The time is now to begin some kind of national plan to give the lower class the tools to rise out of their poverty.
Great post. Another thing to think about is that in years past (and with many immigrants today), people had to learn what truly constituted essential, what is a luxury and what is in between. Certain expenses that we are used to having a certain way feel like essential, but they’re not. How do you live? How do you eat? How do you travel about? Look to your grandparents or further back to learn what was essential and the choices made then.
We live with my mother-in-law and try to combine incomes to make the bills. While this has some personality difficulties both ways, the grandchildren get to see their grandma and our bills are barely manageable. We garden and put food up for the winter to limit our food expenses. For 11 years, I volunteered at the local co-op (until it closed) and brought home bruised or battered produce that wasn’t saleable for my family to eat. This, too helped. We dropped insurance on our extra car when it died instead of getting another. The extra money we pay for gas in the van would be more than offset by the insurance we’d pay on an gas-efficient used car (and that’s without the up front cost). We bike where we can. If we need to, we use public transportation.
Think about it. In a pinch, who could you combine households with? Would you trust someone else to look over your expenses and decide what was and wasn’t excessive? Immigrants do this all the time, live together, plan together and build a future together. Maybe it’s time that we look at our country the way they do and live that way too.
But not for nothing, David. People shouldn’t have to pinch pennies for so many years just to raise a family. It’s fine if they do, and great that you are being frugal. However, year after year, this “American Dream” slips farther and faster from the average worker. What used to be an attainable lifestyle by a simple factory worker who put in an honest day’s work, is now earning wages that are labeled “poverty” by the United States government. These wages are so low that those who work them are now eligible for food stamps, heating assistance, etc. It is a terrible thing to contemplate.