Middle Class Squeeze

topicssqueeze3New Orleans         There were a couple of random headlines and a paragraph or two on the wire services, but the recent report, “Middle Class Squeeze,” by the DC-based progressive think tank, Center for American Progress, is actually pretty startling on a closer look.

Here’s the bottom line. Defining the middle class as those individuals and families between the 20% quintile and 80% quintile or fifth of income groups in a dozen years between 2000 and 2012, median income in middle class dropped by 8%. Families with two parents working and two children, who usually do much better on the numbers, saw their income stagnate in this period. While income dropped, basic costs that define middle income life rose significantly by almost $10,000 according to the CAP researchers work. Rents went up 7%, medical costs 21%, child care 24%, and higher education 62%. At one level you just have to gasp, but living through America in this dirty dozen, there are probably few of us who are surprised at these numbers.

Besides the Great Recession, what happened here?

The report underscores that this has not just been the money grab of the 1% through wealth transfer, though tax and public policy has made this part of the rip and run. Other research has established that 98% of the wealth went to only the top 10% of earners from 2001 to 2007. The report underscores the breach of the social contract between business and workers over recent decades when there was a decoupling of growth in productivity with growth in compensation.

 

Productivity growth from 1991 to 2012 averaged 2.2 percent per year, yet compensation growth only averaged 1 percent per year. A worker today is almost 60 percent more productive than a worker in 1991 but has seen only half of that productivity growth translate into higher compensation.

 

And, that’s just income. The actual wealth of a family has been hammered underscoring the huge gap in inequality.

 

Among the top 20 percent of families by net worth, average wealth increased by 120 percent between 1983 and 2010, while the middle 20 percent of families only saw their wealth increase by 13 percent, and the bottom fifth of families, on average, saw debt exceed assets—in other words, negative net worth. Families of color have fallen further behind white families in building wealth: A survey that tracked white and African American families between 1984 and 2009 found that the wealth gap between them nearly tripled, from $85,000 to $236,500. Homeowners in the bottom quintile of wealth lost an astounding 94 percent of their wealth between 2007 and 2010.

The policy proscriptions focus on doing more to increase the number of family-supporting jobs and aggressively reducing living costs to pull them in line with incomes.
Talk is cheap, but truth to tell, we don’t hear many politicians in this election season speaking to solutions that would loosen the squeeze felt by the vast majority of families.

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Middle Class Movement Takes Needs than Wishing and Hoping in India

IMG_1065Mumbai     I’ve been coming to India regularly for over a decade now, several times per year for many years and annually more recently.  There have been visible changes, tall apartment blocks growing like weeds, highways under endless construction finally completed, more people with more money more visible, but all of this in a death grip alongside and frequently oblivious to the same grinding, relentless poverty of even more people.  How does change come to a nation of 1.1 billion people?  Very slowly, very slowly.

            On the eve of coming national elections, the rising of the middle class is an undeniable factor and part of the conversation of change.  Their cry for more transparency, less corruption, and more protection for women in public and private spaces has found not only voice but some political weight in emerging parties.  Nonetheless, their issues will not be what turns this election, and it is not just because of their lack of organization.  They simply don’t have the numbers yet and haven’t done the work to build the bridges to offset their weakness. 

Their strength is in some of the cities, but even there for example internet usage, according to Google, is 37% in urban areas, while the government statistics estimate total internet access at approximately 93 million.  Certainly, these are big, fat numbers, but nationally they are less than 10% of the population.  They are caught in an echo chamber where their own voices are vibrating back to them, louder and louder, but little heard otherwise, and, elsewhere, too much is as it ever was.

Vinod Shetty, ACORN India’s director in Mumbai, and I had a challenging conversation with two dynamic women community organizers trying to find their way to a workable model to engage the new India they sought to activate around modern values and sensibilities.  They had tried and abandoned a model of selecting associates of sorts to train and support in various organizing projects around Mumbai and had applied themselves with great energy and significant resources to the task, but had shifted gears.  Why?  The director stated simply and flatly, “not enough capacity.”  The meaning of the simple phrase was two-fold.  On the one hand a fledgling organization like theirs was ill equipped to chase all over a city of 18 million to realistically support at any effective level more than a half-dozen mini-campaigns chosen somewhat at whim by the trainees themselves.  On the other hand without her fully saying so, it became obvious in their experience that there was no way to simply graft on to their trainees their theory of change unless they could also figure out a way to actually demonstrate and model  what change and organizing would look like.

Their insight might seem obvious, but it is one still missing in Indian society at large, where this emerging middle class is hoping that speaking truth to power can in fact change the way power works.  Reading the editorialists in countless papers, they are frustrated that somehow politicians are adjusting without either embracing change or fundamentally adapting to a different political climate and culture.   The miscalculation of the Common Man party in having won the right to govern in Delhi, but then forfeiting the position in less than two months is a case in point.  Hard questions are facing their candidates around the country on whether they are quitters or “doers.”  In effect people are asking why they should waste their votes on the party, if they are not going to demonstrate the ability to establish through government the changes on the issues they advocated.  Our organizing comrades may be searching for sure footing, but at least they already understand, they are going to have demonstrate what they are advocating, which seems to have been an elementary lesson overlooked by the new middle-class reformers.

Meanwhile according to Google, the most common uses of their searches right now in the run-up to the election are two.  One is what the caste is of Modi, the BJP frontrunner.  The other is whether or not Rahul Gandhi, the emerging spokesperson for the Congress Party, is a Christian.  

As I said, change comes very slowly.

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