Why is the middle class so angry?

Why wouldn't we be? ... We are financially traumatized and scared of losing everything we've worked so hard for.

Inequality is a reality and a feeling

Social stability is affected by income inequality and it is a delicate balance … too many people living in poverty creates a desperation which may explode … too much focus on wealth creates a feeling of falling behind for those struggling to hang on … and a group of billionaires could be called a Greed, hoarding their yachts, private planes, and multiple mansions while children go hungry.

After doing the research to write this post, I am amazed that something like we are experiencing right now hasn’t happened sooner. It reminds me of this scene from “Network.” Click here to watch.

Peter Finch “I’m mad as hell and I’m not going to take it any more.”

                                   Unfortunately, choosing Donald Trump, Elon Musk, 
                     and their wrecking-ball squad of incompetents wasn’t the right answer
                                                   to the significant problems we face.

How did we get here?

After World War II, American prosperity exploded. We didn’t have a country to rebuild and there was a world “over there” that needed everything we could produce. The GI Bill made school and housing affordable to returning veterans (although we need to remember that those benefits were not equally accessible to veterans of color).

The middle class was on an upward cycle, reflected in the size of houses. The average house available to returning veterans was about 800 square feet. By the 1960s, that had increased to 1,200 square feet and by 2023 had reached 2,411 square feet although the average family size had not increased.

Home ownership, education, and employment have long been key indicators of “middle class.” In 1971, 61% of the US population was categorized as middle class. By 2023, that number had dropped to 51% leaving many working Americans with a growing sense of lost status and stress.

Middle America, 1960. A family of four in a 3-bedroom, one-bath home in a stable neighborhood. One primary working parent with an expectation of life-time employment. Kids walk to the neighborhood school and backyard barbecues happen most weekends.

College is available and inexpensive but not a must. Most people in a neighborhood are in relatively the same socio-economic situation. New cars are relatively unusual and generally one person in the family can change the oil and do everyday maintenance. Summer vacations focus on time with grandparents and other family members. There is time for bridge games, PTA meetings, bowling leagues, and long, Sunday drives in the country. There are even elm trees lining the streets.

Things begin to change: Seemingly overnight, parents could no longer pay for their kids to go to college and they had to watch them take out monster loans and still not be able to find jobs. Health insurance was tied to employment and the company they depended on suddenly announced deep layoffs. Two-income families had become the norm and the massive layoffs of the 1990s into the 2000s created a domino effect known as the Great Recession with the unemployment rate reaching 10% in October, 2009. Home values dropped 30%, foreclosures soared and the S&P 500 index dropped 57%. An economic tsunami struck deep and wide.

Stressed and shell-shocked, middle class people wanted to find something … someone … to blame, and what they saw a lot of … more than they had ever seen before … was people of color, people who spoke a language they didn’t understand, people working behind counters, taking their hard earned money which never seemed to stretch quite far enough any more, neighbors moving into the house next door which sold for a price way beyond the budgets of people still barely holding on.

Nothing was the way it was and they knew it would never be the same. They had done their part, worked hard, watched as the money they saved drained away due to a medical crisis, layoffs or furloughs, and even unwise decisions, but there was no way to catch up. The feelings of being successful and competent drained away. They watched as new government programs addressed the needs of the homeless, the starving children in Africa, the disenfranchised … while no one was helping them.

“Why are we helping everyone else,” they wondered

as they felt increasingly insecure in their own situations.

The massive layoffs and market fluctuations leading up to the the financial crisis of 2008 destroyed a lot of confidence and trust in our systems as so many people struggled with unemployment, underemployment and debt.

Suddenly in 2011, this anger exploded in the Occupy Wall Street movement with it’s motto of “We are the 99%” and the anger at a system which seemed to be designed for the 1% of the super wealthy. People called out the government as corrupt and felt like the working class had been abandoned.

A major demand from the Occupy Wall Street movement was for a $15 minimum wage. Today’s federal minimum wage is $7.25, the same as it has been since 2009.

A 2018 study showed that over two-thirds of US adults had suffered or were suffering financial trauma. While the economy recovered, that financial trauma lives on. Studies show that medical debt is one of the main contributors to financial stress in America, with more than half of Americans unable to cover an unexpected $500 medical bill. (Over 60% of US bankruptcies come from medical debt.)

“In 2023, half of American adults reported that financial stress negatively affected their mental health. This can extend to self-esteem, relationships, and overall well-being.” — therapist.com

And, in that PTSD-like state, voters made a choice for a strong man, someone who claimed he could do anything, fix anything, make the world safe again.

Broken trust in the American dream

Not understanding the real issue, too many of us have reduced this complex trauma to one word: racism. It may look like that and we have a long history of racist policies and actions that make it seem like the main issue; however, the triggering event is financial and the past three decades have broken trust in the American dream as a place where you could work hard so you could raise your family in your own home and be a productive part of a community. Like most people everywhere, most of our needs are pretty simple, even though they seem increasingly hard to achieve.

What’s the answer? Good question; difficult answers.

So, here we are. We’ve made a bad choice in our elected President who is only interested in money and power and has surrounded himself with like-minded people. He says he is rooting out fraud and waste … so what does he plan to do with all the money he’s saving?

- Cut taxes for the rich. 
- Line his pockets by selling a bunch of valueless “memecoins.” 
- Build a retirement resort on the beach in Gaza. 
- Destroy the Kennedy Center which he has never attended.
- Gain favor with Putin and his other "strong man" buddies even if it puts our national security at risk.

Right now, we are blinded by the bizarre hazards being created daily. We need to figure out how to survive the chaos and plan for a better future. We have survived other challenges; presumably we will figure out how to deal with this one.

Knowing where we are, and that we can’t go back, please share your ideas and thoughts about how to avoid violence and create a plan for the future that gives everyone a chance to live their own life and contribute to the general well being.

We are still a rich and beautiful country full of smart people. We have to be able to figure out how to take care of each other and protect the future for our children.

Same time, next week. In the meantime, stay connected and build your communities.

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Sources:

The Relationship Between Financial Worries and Psychological Distress Among U.S. Adults J Fam Econ Issues, by Soomin Ryu, Lu Fan

Diagnosis: Debt 100 Million People in America Are Saddled With Health Care Debt, KFF Health Services by Noam N. Levey June 16, 2022

Challenges: When I asked Perplexity what the challenges were for the middle class, the following is what came back:

Middle-class families in the United States face several significant challenges today:

1. Stagnant wages: Despite economic growth, wage increases have not kept pace with inflation, eroding purchasing power and making it difficult for families to maintain their standard of living.

2. Rising healthcare costs: Healthcare expenses continue to outpace inflation and wage growth, putting a strain on family budgets.

3. Education expenses: The cost of higher education is increasing, making it challenging for middle-class families to afford college without taking on significant debt. (In 1963 the average cost of tuition at a 4-year public college would be the 2024 equivalent of $2,487. By 2021, the actual tuition had risen to $10,560. A full-time minimum wage worker earns $15,080 annually.)

4. Retirement savings: Many middle-class Americans struggle to save adequately for retirement, with increased longevity adding to the financial burden.

5. Consumer debt: Record levels of debt, including credit card balances, auto loans, and mortgages, are putting financial pressure on middle-class households.

6. Housing affordability: Rising housing prices have made homeownership, traditionally a cornerstone of middle-class life, increasingly difficult to achieve. (Housing prices since 1960 have increased at 2.4 times the rate of inflation.)

7. Climate change impacts: Environmental factors are introducing new economic pressures, such as increased insurance premiums and disaster recovery costs1.(Between natural disasters and the increasing value of housing, home insurance costs have soared and are becoming unavailable in high-risk zones.)

8. Work-life balance: Many middle-class families struggle to balance work and family life, often needing to work longer hours to maintain their income levels.

9. Legal expenses: Unexpected legal issues can pose significant financial challenges for middle-class families who earn too much to qualify for free legal aid but too little to afford traditional legal services.

10. Declining marriage rates and rise in single parenthood: These demographic shifts have reduced the financial resources available to many middle-class families.