Posted on 08/29/2004 1:57:32 PM PDT by NYC Republican
EWTON, Iowa - Sure, she is upset that she cannot afford health care, and it hurts that higher tuition costs at the community college where she carries a full load have put her deeper in debt. But at the end of this month, Molly Illingworth will suffer the worst blow yet: she is getting laid off by her mother.
"I hate to close the shop," says Pam DeBruyn, Molly's mother, who owns a small party and office supply store here, and also works full time as a graphic designer. She needs the designer job for the health insurance, so she will close the store, and with it will go her daughter's employment.
In this Iowa family, one generation is trying to step through the gateway to the middle class; the other is struggling to stay in it. And it is the middle-class squeeze - rising college tuition and soaring health care premiums at a time when wages are stagnant and job creation is sluggish - that may be the sleeper economic issue of the presidential campaign.
"I feel the squeeze from both ends," said Beth Steenhoek, a mother of two who owns a small insurance agency in Newton. Fewer people are buying insurance, she said, because of a hefty increase in premiums, and her own family insurance costs have gone up as well.
Ms. Steenhoek has refinanced her home mortgage loan, and remembers getting "about $400 a kid" in the Bush tax cut, but she said it still feels like the family budget is shrinking. And she has not even thought of taking a few days off.
"A vacation? No, I can't leave the office."
For Ms. Steenhoek, the economy is the No. 1 issue in the presidential campaign. She is that rare species this election year: the undecided voter. But even solid partisans are troubled by the tremors at the edge of middle-class life.
"I'm a pretty staunch Bush Republican and I have a great job at I.B.M.," said Todd Canny, who was sharing ice cream with his three children and wife in a new mall. "But we're paying a lot more for health care co-pays and premiums, which is through my wife's job as a teacher. And trying to save for college for these three little ones has gotten a lot harder."
Senator John Kerry says the middle class has shrunk since President Bush took office, and when judged by the percentage of Americans who made $25,000 to $75,000 in 2003 - 45 percent of households - he is right, according to factcheck.org, a project of the Annenberg Public Policy Center that monitors campaign claims. Mr. Bush cites record home ownership and a rising investor class. He points to indicators of coming economic growth, and says his tax policies have put money directly back in people's pockets.
But despite low inflation, record home ownership and productivity, many middle-class households are close to a tipping point - a bill or two away from losing economic control, surveys and interviews show. Even with the creation of a million new jobs over the last year, the percentage of people who say the economy is in good shape has fallen as Election Day approaches.
[The number of Americans without health insurance rose to 45 million last year, up a million from the previous year, and median household income continued a three-year decline, the Census Bureau reported on Thursday. People in the middle-income brackets had the biggest declines in coverage.]
Last year, 1.6 million American households filed for personal bankruptcy, up 33 percent from 2000, according to figures kept by federal bankruptcy courts.
And if current trends hold, nearly one in seven families with children will declare bankruptcy by the end of the decade, said Dr. Elizabeth Warren, a Harvard Law School professor who is the co-author of "The Two-Income Trap: Why Middle Class Mothers and Fathers Are Going Broke" (Basic).
"These people aren't poor," Ms. Warren said. "But this is the first generation where college-educated people with a good job cannot find financial security."
But Ms. Warren said the squeeze goes beyond short-term economic swings, and is worse than it has been at any time since the creation of the post-World War II middle class. The reason is that the price of things that people cannot control, but need to get ahead of or stay ahead of, are rising much faster than inflation or wage increases.
With wages flat, college tuition is up an average of $1,207 for four-year institutions since 2000, and yearly health care premiums up $2,360 over the same period. Mr. Bush's advisers say the tax cuts have made up for stagnant wages. Real disposable income, money left over after taxes, is up slightly this year over last, and that is mostly because of tax cuts.
Another variable is gas prices. They have fallen some from recent highs, but record oil prices portend a winter when home heating fuel costs could break some family budgets. Already, higher gas prices have cost the average family about $500 a year.
So even though people received additional money out of their houses, through low-interest rate refinancing, or in their pockets, through the federal tax cuts, the stimuli seem to have worn off. Nearly two-thirds of people in recent polls say they have trouble paying bills and feel pinched by the rising costs of middle-class essentials.
It is one thing to feel the squeeze in Newton, a Maytag company town east of Des Moines where layoffs and outsourcing have had a ripple effect on businesses big and small. But it is quite another to hear people talk about the squeeze inside the polished marble shopping palace of the new Jordan Creek Town Center, Iowa's biggest mall. It had its grand opening this month in the booming suburbs west of Des Moines.
The Cannys live near the mall, in the fastest growing part of Iowa, where big houses and new office parks have sprouted in former corn fields.
Mr. Canny said the Bush tax cut did not help his personal finances as much as the rising health care costs and the higher price tag for filling his S.U.V. tank hurt them. Mr. Canny has yet to give Senator Kerry, who used the term "middle class'' eight times in his Democratic Party acceptance speech, a second look.
"But if things continue to get worse, it may start to affect my vote," Mr. Canny said.
Iowa's seven electoral votes went to former Vice President Al Gore by a slim margin in 2000 and the state is up for grabs this year, according to polls. It is not only a swing state, but also emblematic of all the trends that have pressed middle-class Americans.
Ms. DeBruyn and Ms. Steenhoek, here in Newton, own their businesses. Both women have a spouse who also works. But both women feel they have lost ground because of costs they cannot control, costs of things that keep them among the overwhelming majority of Americans who say they are middle class.
When Mr. Kerry said in his acceptance speech that "People are working weekends, two jobs, three jobs, and they're still not getting ahead," it went directly to the middle-class squeeze issue, and hit its mark in some households in Iowa.
"I like some of what Kerry has to say on the economy," Ms. Steenhoek said.
But both women also like President Bush's emphasis on trying to give tax money back to middle-class families. In Iowa a few months ago, Mr. Bush said the election "is a choice between keeping the tax relief that is working, or putting the burden of higher taxes back on the working people."
Here in the troubled prairie town of Newton, the only way Ms. DeBruyn says she can keep her dream of owning a small business alive is by firing her daughter, whom she has been paying $6.50 an hour. Then she plans to move the business into her home and open it at night, while holding onto her full-time day job as well.
"I'd like to retire in this town," said Ms. DeBruyn, who has lived in Newton all her life. "But it seems like we're holding onto less and less of what we make."
In '80, the rate was 52%
In '03, the rate was 44%
The one HUGE thing they don't mention anywhere is where the 8% has gone... ABOVE (75k, into upper class)or below (25k, into poor/poverty). In reading this trash article, it clearly implies that they all went into the poverty bucket...
I'd bet my bottom dollar that they went into the upper bracket, in disproportionate numbers...
This would be a good thing, no? You would think just the opposite by reading this, and all of the other Bush-hit pieces in this trash paper.
If anyone knows where the data can be pulled (stats below and above middle class) for '80 and '03, please post it here. Thanks
Sorry, in '03, it was 45%, not 44%, so that leaves 7% moving out of middle class.
Actually, it's taxes and Social Security that are killing me - and, by the way, I'm so glad I work the first half of the year to pay for illegal aliens' health care and wasteful government bureaucracy.
Right. Skerry's going to help you out on that. Just wait and see. Sweet.
I didn't read the article because I already know it is a lot of hogwash.
Every single time I've been to a mall in the past 3 years (ever since after 9/11) the places have been packed. I don't know where all those "poor Americans from the other America" are. Because all the rest of us are at the mall.
John F'in K and the staff of the NY Slimes probably don't know that, because they are too elite to actually go to malls.
Yeah. I can't wait. Where's that koolaid again?
Exactly!
You've been here for a month... I smell TROLL...
Subtitle:
"Dog Squeeze Squeeze Plaguing NYT"
I think it's time for someone to write a book that chronicles the misinformation and outright lies the New York Slime prints.
It could be a best seller on the New York Times best sellers list, which would be ironic.
'Scuse me?
I sure felt squeezed when I got that $800 check
from the govt. last summer.
A refund of MY MONEY.
Recycle your Karl Rove Bribe [TM].
Donate to the Swift Boat Veterans NOW!
Man, that's an excellent idea... The NY Post already has a weekly article that chronicles the NY Slime's lies and propoganda... It would be GREAT if someone actually logged all of this in a book.
Jeez, another newbie, you're less than a week old, huh? Republican my a$$.
You can bet that if the 7% went to the poor level, the NY Slimes would have reported the figures... The fact that they didn't indicates that this is a bunch of lies/spin/propoganda.
Oh, I get it. Questioning my credentials. Card-carrying Republican since 1971, never voted any other ticket, never will, and Freeper from 2000-2003 (took a break following a painful run-in with a couple other Freepers concerning a topic too close to me, namely, the death of an infant) and re-upped because...well, my name ought to tell you enough.
What's deceptive is that Kerry does NOT have a "plan" for the most important component of this whole thing: the re-vivification of manufacturing.
More accurate, his plan is the same as Bush's: benign neglect--let it all go to PRChina.
And Maytag is slowly pulling manufacturing out of the USA, just as did Admiral, which closed down their main plant in Illinois and killed the town surrounding it.
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