When we read about the middle-class squeeze, we tend to think blue collar -- the machinist who used to make $25 an hour now making $15, the vocationally trained worker whose job just got cut. But what about the social worker who makes $30,000 a year, the environmental scientist who makes $40,000, the college professor who makes $50,000? The rules of the game have changed. The educated professional middle-class experience no longer guarantees two cars in every driveway, or even the driveway itself. Instead we face relatively low-paying jobs in fields requiring a high-cost education, increasing mortgages, student-loan and credit card debt, less employer or government help with health care, retirement, education, and child care, and an overall higher cost of living. As the gap between the rich and the middle-class widens, a huge segment of that once comfortable center section is finding that reality means plummeting financial and emotional security and lack of control over our lives.
The financial insecurity that's come to haunt so many educated professional middle-class lives provides a powerful wake-up call about the extent of compromised choices in America today. It's pushing us away from many of the lower-paying public service professions that are essential to a well-functioning society like teaching, social work, and careers in the nonprofit sector, it's making us question whether we can afford to have families, and it's increasing the number of economic crises like bankruptcies and home foreclosures striking the middle-class population. Such insecurity obliterates the standard fallback that if only every worker had access to an education and a job they too could achieve the American dream. And it speaks to a shift that runs far deeper than just our financial state.
Why this dramatic change? The economics are simple and well documented. We're earning less and having to pay for more. Earnings for college graduates have remained stagnant for the past five years, but the costs of housing, health care, and education have all risen faster than inflation. The share of family income devoted to "fixed costs" like housing, child care, health insurance, and taxes has climbed from 53 percent to 75 percent in the past two decades.
Though a college degree still earns you a bigger paycheck than a high school one, the price of a four-year education has grown increasingly dear. Between 2000 and 2004, tuition rose 32 percent at four-year public colleges and 21 percent at private colleges, requiring the majority of students to take out loans to fund their education.
Once we hit the workforce, those rising numbers do an about-face. Real earnings for those with four-year college degrees have flattened out since 2003, not even rising to keep pace with inflation. Graduates quickly discover that many careers requiring a high level of education don't come with equally high-level salaries.
When it comes to supporting a family, those numbers start climbing once again. Raising one child through age eighteen costs a middle-income family roughly $237,000. Child care alone runs, on average, between $3,803 and $13,480 a year per child, with accredited care facilities charging as much as $5,000 more per child than their nonaccredited counterparts. And despite the surge in dual-income households since the 1970s, there's been no accompanying double up on discretionary income. Once we cover all the major fixed-cost expenses, we're now relying on two incomes to support a lifestyle that used to require one.
Even owning your own home, once the cornerstone of the middle-class existence, has become a shaky proposition. Housing prices have shot up in 2005 they rose six times as fast as household incomes in most major metropolitan areas. And though more of us may own homes than we used to, we own a whole lot less of them. We're buying with the help of steep mortgages fixed rate, adjustable rate, interest only then pulling out the money as fast as we poured it in, refinancing to the tune of $900 billion in 2006 alone, almost triple the $333 billion we took out between 2001 and 2003.
Given the increased cost of just about everything, it's no shock we're sliding deeper into debt. Only 18 percent of middle-class families report having at least three months of their income in savings to ride out an economic downturn. Such bare-bones living means we have no choice but to borrow to bridge any unforeseen gaps, turning to credit cards to cover everything from home repairs to medical expenses to college tuition. The level of U.S. household debt has risen consistently over the course of the century, climbing from just 33.2 percent of disposable income in 1949 to 102.2 percent in 2000, and to 131.8 percent in 2005, making it the highest ever measured in our national history.
Such persistent, collective economic stress has profound psychological effects. Worrying about money keeps us up nights, it rips holes in our relationships, and becomes our greatest source of uncertainty, tension, and fear. We can begin to doubt our career choices and even our value systems. We grow confused about how to walk that increasingly tricky line between wanting to have enough money without making the pursuit of money our ultimate goal. In a country whose motto has become "The more you make, the more you're worth," for those adhering to an alternative value system, it's a tough road.
It hasn't always been like this. The United States was founded as a nation of iconoclasts and pioneers. Even when there were no more literal trails to blaze, "the land of opportunity" still made room for a different sort of expansion. One could choose to keep up with the Joneses, but one could also chart a less lucrative alternative route such as being a social worker or a high school chemistry teacher and still raise a family, count on reliable health care, and comfortably retire.
A struggling educated professional middle class doesn't just impact the middle. We are the teachers, the social workers, the environmentalists, the writers and reporters who weave together much of the social fabric of this country. Yet we're already seeing disturbing trends in young people shying away from public interest and service careers because of legitimate fears about how they will manage financially. A 2006 study by the U.S. Public Interest Research Group found that 23 percent of public college graduates and 38 percent of private college graduates attempting to live on a starting teacher's salary would have an unmanageable level of debt. For social workers, such debt would be unmanageable for 37 percent of public college and 55 percent of private college graduates.
Of course, financial hardship is nothing new in our society. The poor, the working class, and what sociologists Katherine Newman and Victor Tan Chen call "the missing class" those people sandwiched between the poor and middle classes are in a truly precarious position, as they don't have even the few safety nets many in the middle class possess. But the struggles of today's educated professional middle class can and should serve as a bellwether. In exploring the educated professional middle-class experience, we're addressing that segment of society that did everything we were supposed to do in order to "make it" in America. We have the college, even graduate, degrees. We have jobs good jobs and make salaries that on the surface look like solid middle-class salaries. There is already serious cause for alarm in an affluent nation with a poverty rate as high as America has today. But when even we, the ones who had every opportunity, are struggling for financial security, you have a society that can't possibly sustain itself over the long run. S
Excerpted from "(Not) Keeping Up With Our Parents: The Decline of the Professional Middle Class," by Nan Mooney, Beacon Press, May 2008.
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