When the late Tony Snow stepped down from his position as President George W. Bush’s press secretary, he explained that he simply could not “make it on $168,000 a year.” The comment didn’t play well in Peoria.
The media downplays the enormous wealth enjoyed by disgraced chief executive officers of bankrupted companies, special-interest moguls, lobbying giants, and too many members of Congress, including House Speaker Nancy Pelosi. At the same time, it vastly exaggerates grinding poverty in America, which, compared with that of other nations, is virtually nonexistent.
The middle class, on the other hand, gets no respect.
Both parties know that, of course, and when they attempted to capitalize on it during the 2008 election season, they wound up showcasing their ignorance.
Sarah Palin used the term middle class interchangeably with working class, which actually equates to blue collar. The usually astute Thomas Sowell, in a column criticizing the State Children’s Health Insurance Program (SCHIP), reported that some people who qualified for the program were making “as much as $80,000”—the implication being that a family making $80,000 is well off and can easily afford health insurance. SCHIP may well be just another redistribution of wealth, but in today’s economy, $80,000 does not mean that you are well off.
While it is true that the gap between rich and poor is widening, it is also true that the middle class can no longer buy what it could afford without difficulty just three decades ago. For example, the humble oven in your kitchen and the new energy-efficient furnace in your basement incorporate a sophisticated array of computer chips, electronics, and digital equipment. When something goes wrong, entire motherboards have to be replaced instead of the individual selector switch or thermostat of 30 years ago. The cost of an oven repair, then, ranges from $800 to $1,000; a repairman recently told me that, in the 1950’s, 60’s, and 70’s, that rate topped out at $100.
Built-in obsolescence means that small appliances, from clock radios to coffee pots, must be regularly replaced because they are similarly outfitted with chips and digital electronics and, therefore, are not worth the cost of repair. Many such appliances, in fact, are sealed units, meaning they cannot be opened for repair.
Now consider the drippy bathroom faucet. In 1970, you would have purchased a 50-cent washer and screwed it into the spout yourself; today, for many models, you cannot purchase a washer, much less a mere handle or spout; you must purchase an entire assembly. So when people finally replace bathroom fixtures, they often spring for something attractive. Not “upscale,” because anything with porcelain or embedded colors typically runs between $400 and $950. By contrast, a “plain vanilla” faucet at the hardware store costs between $75 and $140, but unless it is going in the basement, most people want something a little prettier.
So, you settle for “attractive,” which means your cost is somewhere between $220 and $380. You purchase the set, which comes with directions, and go home.
Next, you attempt to get your old faucet out. You likely discover that at least one of the handles is “frozen” in place by hard-water deposits. That means it cannot be unscrewed (thus the dripping) and will require either a saw or the removal of the sink from the wall. Unless you call a professional, you will probably chip your sink and perform other collateral damage that sets you back hundreds of dollars. Most likely, you already have wasted a day searching for the “attractive” faucet (because everything in your price range is conveniently out of stock). You are in no mood to go on another expedition to replace your sink.
So, you hire a handyman or plumber and pay him another $200. Your “attractive” faucet has now cost you some $420. That is only $150 less than what my mother spent on private-school tuition for me at an international academy for the entire year of 1958.
Figures like these are not reflected in annual inflation statistics (4.1 percent in December 2007), where food, gas, and housing prices (the primary focus) are offset by lower electronics and computer prices—cell phones, Blackberries, plasma TVs, etc.
Middle class used to mean living in anything from a plain, two-story brownstone without air conditioning, multiple bathrooms, or finished basements to better digs in now-“exclusive” neighborhoods. Restorations of 18th-century homes, including electrical wiring and plumbing, ran as high as $16,000 in 1958. That figure wouldn’t pay for the overhaul of your 1970’s-era bathroom today.
The 2008 financial crisis, with its projected $850-billion government bailout, highlights a different sort of “inconvenient truth”: Items essential to the middle-class lifestyle were either unknown or unnecessary in pre-1970’s America (never mind iPods or Blackberries). Worse, many of these essentials are critical because of government.
No matter what business you are in, if you are among the demographic known to economists as upper-middle, middle-middle, or lower-middle class, you must own at least one personal computer, a cell phone, a shredder, and a handheld planner. Without these, you cannot—you will not—function as a professional. Every company or service call you make—for repairs, credit-card questions, or health insurance—is programmed to urge logging onto the company’s website for information. Computers are a given, just like the electronic key locks and seat belts installed in your car, whether you want them or not.
The working-class and unskilled-labor sectors have some leeway on these points, but not much. That is because the “less fortunate” tend to operate on a kind of barter system. A buddy fixes his neighbor’s car so that it will pass inspection, with the promise of a return favor when needed. Working-class inspectors are not so picky with this neighbor, unlike the fellow who drives up in a suit and tie.
Failing that, there is always government aid for those who “qualify.” Not being able to read or write passably helps ensure “eligibility,” and the costs are passed on to taxpayers. The middle class is hit hardest; it is not awash in trust funds, offshore accounts, and “old money.”
Your computer is key to your continued existence as a professional, but it is outdated two years from time of purchase, if not before. Yet, as a professional, your letter, document, and business card are expected to be error-free. Computer upgrades are expensive, time-consuming, glitch-laden, and result in a profusion of wires. Thus, more outlays for wireless connectors.
The “less fortunate” are under no such constraints to “stay in business.”
Spam (much of it blatantly pornographic) and identity theft require a plethora of encryption packages, firewalls, parental controls, and virus protectors—which, of course, are additional expenses. Oh, and remember to shred all those credit-card come-ons, with your name, address, and other personal information helpfully printed on them.
Meanwhile, caller ID is fast becoming a must-have for every landline telephone to avoid the scores of daily computerized calls soliciting “on behalf of” various causes, surveys, or services. Thanks to computerized soliciting, the national no-call registry was dead on arrival. The “less fortunate” do not receive so many nuisance calls, and the exorbitantly wealthy have others to answer their phones. An answering machine, of course, is embedded into your telephone, so you do not have the option of avoiding that cost.
There are no “freebies” for middle-class wage-earners, and there is no way around the additional taxes to support institutionalized “equality.” Exorbitant heating costs? Government rushes to provide a handout. Never mind that the recipients’ children are cavorting down the street with a Bluetooth phone headset in one ear, an iPod earbud in the other, and maxed-out credit cards in their pockets. From vouchers to “scholarships” to free prenatal exams, the middle class foots the bills.
When I was a child in the 1950’s and 60’s, the private academy I attended in Washington, D.C., was geared to the offspring of diplomats and others interested in a structured educational environment. My family was not wealthy. Neither were the children of a significant number of secretaries and typists living off widows’ pensions. The sacrifice—about $600 a year—was significant, but those who wanted to could make it.
Today, private schooling typically is out of reach for middle-class families. It is noteworthy that the majority of my 1950’s classmates could not manage it for their own kids, even with steady, professional jobs. Salaries have not kept pace with the costs, partly because of the obstacle course of regulations for private schools that require ownership and management by corporations instead of by individuals.
A recent article in the Washington, D.C., Examiner set the standard of $200,000 for a moderately wealthy couple’s salary (or $150,000 for a single earner). Outright “wealthy” is considered a taxable income of more than $500,000.
A typical secular, private day school in the D.C. metro area costs $18,000 to $22,000 per year, per pupil. In New York City, that figure is higher; in the heartland and the Southwest, costs are somewhat less. Where private schools are fewer, waiting lists are longer. Parochial schools also are cheaper, but most accredited ones are Catholic, and not everyone is Catholic. So, the D.C. metro area, with its hundreds of options, serves as a good baseline.
Let’s say that you have two children and make a top-ranking middle-class wage of $200,000 per year. You have no additional large assets, such as a house paid for by your parents as a wedding gift. You do not have employer-provided transportation, or a comprehensive insurance plan like members of Congress. Your net worth consists mostly of basics, and you earned them yourself. You took the trouble to understand the employee-health programs, mutual funds, and pension options, but that’s about it.
Sending your two children to a private school for 12 years, then, will cost you $480,000 in tuition.
However, you still have some spending to do. There are books; large annual donations (expected); clothing (not jeans and a T-shirt); and field trips that require hefty out-of-pocket expenses.
That brings the figure up to half a million dollars for two youngsters. Over the course of 12 years, $275,000 per child is not a stretch. Three children raises the total to $825,000, which will be more like $850,000 by the time you are finished. You have federal, state, county, property and sales taxes; a mortgage; food; auto maintenance and inspection; appliance repair and replacement; insurance premiums; outlays for orthodontics and dental work; aging parents; occasional trips to the beach; and a pet. Your various savings plans are nonliquid assets. How far do you think $200,000 a year will go?
Suppose you decide against private education and opt for homeschooling. While homeschooling is ideal, in order to be successful you have to be highly organized, committed to keeping a schedule, willing to endure constant oversight by the state—and either be familiar with every subject area or know someone who is.
And public schooling? If you are willing to accept that parents’ rights stop at the schoolhouse door, maybe you can handle that. You will have zero control over the prevailing moral and political climate, and neither teachers nor administrators are likely to back you up if push comes to shove. Hooker chic will be the standard dress, and parents who are not politically and socially liberal will be treated as morons (breeders and feeders). This will send a message to your child, who will react, in turn, by questioning your authority and balking at your rules. The school will push heavily for extracurricular involvement by students, so essentially you will not see your child all week—or the pals he or she hangs out with, except when you serve as chauffeur. Neither teachers nor your neighbors are going to tell you that there is a problem unless it is their ox that is being gored. You will have to stay ahead of the curve on what your child does, his or her pals, and watch for controversial curricula. At some point, you probably will have to shell out for a private tutor. Thanks to the prevalence of mind-altering drugs, legal and illegal, the risk of violent assault will be higher—despite invasive pat-downs, metal detectors, and police inspections.
In 2007, the state of Maryland’s cumulative tax bill rose by some $40 million specifically to pay for school refurbishments. The higher the tax bite, of course, the less likely parents are to spring for a private or parochial school.
And then there is college.
We Baby Boomers didn’t have to have a university degree to secure a good job. Oftentimes, employers valued individual initiative, experience, merit, and commitment more than a framed piece of paper. Today, that piece of paper is an absolute necessity—several pieces, preferably, unless you are an entertainer or a professional athlete.
In the 1960’s, some of my friends worked their way through college packing sandwiches for vending-machine companies, collecting garbage for the county, becoming crop-dusters and salesmen in the summers—all to afford a state college. Many parents who could have sent their children to college felt that forcing their heady young high-school graduates to get a job was a reality check. Understanding what jobs were available without a college degree was more important, they thought, than subsidizing four years of frat parties and husband hunting. Working-class families, of course, had no choice but to encourage their youngsters to go to college on their own dime.
Today, none of these jobs could pay tuition, let alone the cost of books, dorm fees, mandatory cell phones, and transportation. One reason why the cost of college is so high is that many of the students who rely on government loans and freebies should not be there. Remedial classes are standard fare at most colleges and universities, again causing prices to rise.
In the 1950’s and 60’s, groceries were delivered for a small fee, as were pharmaceuticals and dry cleaning. That meant fewer trips in the car, so most families needed, and had, only one vehicle. Now a family needs two cars to get anything done. Dilapidated highways, traffic cameras, speed bumps, and other nuisances ensure that your commute is as miserable as possible.
Obviously, exorbitant wealth makes grocery shopping, pharmaceutical or dry-cleaning delivery, and long commutes more than affordable. Multimillionaires can hire personal assistants and chauffeurs. The poor get public-transit passes.
Long security lines at the airport? The rich can charter a flight or buy a private plane. Power outage? Several backup generators will automatically kick in. Check overdraft? The bank will access other accounts. Spam? Let the secretary deal with it. Painful medical condition? Forget haggling over painkillers or satisfying DEA requirements or divulging embarrassing details one might not want in the newspaper. A quiet word with the doctor will suffice—or a quick trip outside the country.
Long waiting lists for a private school for Suzie? There will be no need to navigate a maze of Mickey Mouse exercises like writing an essay on “What I Like Best About My Child.” No forking over financial and employment histories. Extreme wealth allows one to donate substantial sums to the institution of your choice before any mention of enrollment, then hire someone to give Suzie an “aptitude test.”
Meanwhile, the middle-class citizen is treated like the lower classes—slapped with “gotcha” fines and nuisance regulations that the Al Gores and Nancy Pelosis of the world wouldn’t stand for. When you own a house in Maui, an apartment in New York, and a villa in France, it’s easy to be generous with other people’s money.
As for the lower classes, pharmaceuticals become magically “manageable,” just like housing, food, and credit-card debt.
The 2008 financial crisis, the government bailout of Wall Street, and the rise of fuel prices have merged at a precipitous moment, ensuring that the spectacularly wealthy can continue to obtain services previously extended to the middle class as well. Yet, when the discussion comes around to “energy hogs” and “wanton consumerism,” who stands at the end of that pointing finger?