The Middle Class Is Doomed, Seriously?
Do you think of yourself as middle class? Your parents? Your friends?
According to the Business Insider, most of us actually, well, aren't. Here's the definition writer Charles Hugh Smith is going by:
1. Meaningful healthcare insurance, either provided by an employer or paid by the household 2. Significant equity in a home or other real estate 3. An income and expense sheet that enables the household to save at least 6% of its income 4. Significant retirement funds, either employer-provided or 401Ks, IRAs, income property, etc. 5. The ability to service all debt and expenses over the medium-term if one of the two primary household wage-earners lose their job, i.e. either the household has significant savings or its debts are modest compared to the household income.
Anything less than this basket of attributes is too precarious to qualify as middle class. These basics of financial security were standard-issue for the middle class in the postwar era.
That's pretty sobering, but "doomed"? DOOMED? Do you think we're doomed?
I see a shift happening in a lot of my friends, as well as changes in my own behavior. I cringe now when I think of how easily I used credit cards ten years ago before the mortgage and the child. I had a savings account! I could pay off my balance any time, if I wanted to! Except I didn't. Well, I used that savings account to self-finance my maternity leave (I was a contractor at the time) and fund all the baby supplies and home repairs. Now, after moving into a suburb with a better school district, the savings account is a shadow of its former self and I'm likely still paying for that dinner out in 1999 on my credit cards. Using my credit card for groceries or Target runs is something I would not even consider now. I can't add to my mountain of debt for any reason other than emergencies.
I see a lot more people keeping their cars longer or buying used cars. We bought a used car with cash this year -- something my own parents did exclusively when I was a kid. I see more thrifting and yard sale seriousness. I see more staycations and driving trips to visit relatives. All of that is what my parents did when we were growing up, too. Of course, my dad supported the whole family on his engineer's salary -- something that sounds ludicrous to me now. It sucks that my husband and I are living at the same level with two good jobs that my parents did on one, but in general, we're not doing anything new -- we're doing exactly what my folks did. It's what you do when you're like me and at the most expensive time of your life -- the child-raising, mortgage-paying, house-fixing, college-saving two decades somewhere between twenty and sixty for anyone who has kids. (And those who don't still may have the mortgage-paying and house-fixing expenses, of course.)
As I've advanced through adulthood and faced the realization that Social Security will probably be empty by the time I turn 67 and I may or may not be able to save enough to retire in any real way, I've gone through anger, fear, resentment and anxiety. And then I asked myself if I could seriously see myself not working at all up until the point I really couldn't do it anymore. I really can't. Hopefully I won't need to earn as much money as I do now, but if I pay off my mortgage and successfully launch my child, I shouldn't need nearly as much money as I do now to keep up with my life. All the scary financial news that started in 1999 when the bubble burst and really continued unabated for most of my professional life is having less and less of an impact on me. I get it: I'll probably not fully retire until I'm 80. I might even die in harness. I could look at this as "doomed," or I could continue trying to do jobs that I actually like. If you're going to have to work forever, might as well be creative, right?
Do you think you fit into the middle class? Do you think the middle class of the fifties will disappear forever?