Friday, August 2, 2013

My Ramblings on Middle Class Erosion


This must be a popular middle class lunch spot.   So far, there is no light at the end of the tunnel. There are however, LIGHTS at the end of the tunnel, and we all know what that means.     (Photo:

    I think that long term readers of my blogs probably already know that I don't hail from a wealthy family.   Some of my ancestors left Scotland for Nova Scotia as some of the original European settlers there. One was employed by the Crown to built homes there and wound up in debt because eating and feeding ones family in those years in unsettled Nova Scotia with all sorts of restrictions from the Crown concerning not trading with the indigenous Mik-Mac and the French,  were tough.  Some of his sons were actually indentured servants, and so it always strikes me as odd when people assume my family kept slaves because we are white, when in fact, for a time, some of my ancestors worked pretty much as slaves.   My paternal grandfather's family came from England and were one of the first families to settle Northern California as cattle ranchers.  My great grandparents worked like dogs beside their Chinese employees who were not only their employees, but their friends in an era in which the Chinese were not treated well in California.  They eventually amassed assets, but the bulk of their money and investments were lost during the Great Depression.   My mother came from England, and most of her family's assets were decimated during the war, as were most peoples there.   So, I came to the world with frugal parents who valued education and culture but who thought the trappings of wealth were foolish.
            When my mother left England after WWII and married my father, she had already had a very good job in England. She was a high level employee in the British equivalent of the Federal Reserve.  My father had completed college in England and had been an explorer.  They settled in Marin County, California where my paternal grandmother had a home. My mother quickly accepted a fairly high level job with the Bank of California, one which a woman had never held prior.  Both of them worked hard and saved their money, but they were decidedly middle class. I was born in California. My father kept the hospital bill. It was higher than most bills for childbirth of the time, yet it was only three hundred dollars and some change.
            A couple of years after I was born, my father took a job in electronics in New Jersey.  My brother was born in the mid-sixties there.  Both of my parents proceeded to raise us with frugality, not because we were poor, but because this was the way to raise children who could earn and hold on to the money they earned, and spent frugally when it was necessary.
             My mother and father were each masters with their money.  My father chose not to buy a new car at any juncture of his life. He always bought good used cars, and generally from individuals at work, where he believed the best deals were. He also believed that most people would be honest about any issues the car had.  My parents furnished the large home they bought not from furniture stores, but from auctions, church sales and people from work.  The house always looked as if they were wealthy, when in point of fact, they usually chose jobs which gave them a lot of time with family, and made less than they probably could have earned at that time. They assembled a home one item at a time, and my mother made the slip covers we had. She even took a book from the library and taught herself to reupholster furniture.  To this day, I still can't pay money to reupholster anything, but then I don't have the spatial relations skills and the patience my mother had.
           I was trained well, and when I married and ultimately gave birth to four children and adopted one, I applied the lessons of frugality I had been taught both consciously and unconsciously.    I mention all of this because by now, we should be wealthy using all the modalities we were taught..   We should at least be decidedly solidified and safe within the middle class of the United States.
            Two of my children have completed university, in part with student loans they took themselves.  One of them is in college now, and the son we adopted several years ago, will likely go next year.  We will help if we can, but I won't be writing any big checks. 
             When our children were small we bought large acreage in the US for much less than the going rate because it was undeveloped and quite a distance from anything.   This farm was only built as a result of this choice we made long ago.  We should be safe and secure within the Middle Class, and yet we are not.
The inflation that our government says does not exist hits hard in the area of fuel for cooking, heating and driving for work or medical care.   Our medical care costs have risen exponentially.  Our homeowner's insurance costs have risen 40% in the last three years, and in 25 years of owning five homes one after another, we have never made a claim.   Our registrations, personal property tax for cars, dog licenses, professional license for nursing, my husband's certifications for his profession have all skyrocketed.
            In all honesty, I don't think we will be able to hold on to being members of the Middle Class. I also don't think that retirement will ever be possible for us.  Our retirement account was devalued in 2008, and has not recovered.
           As for our friends, also members of "The Middle Class", many of them lost their homes since 2008.  People who were well established with businesses, law practices, building contractors, or employment for companies have lost homes, cars, businesses, and retirement accounts.   Most of them did not make foolish decisions financially.  They created lives which depended upon making 60-75% of what they were making, and then the economy changed sufficiently that this was no longer possible.  Even relocation did not help some of them. I know people who are college graduates, and people who aren't, but who haven't worked in more than three years !   It might never be possible to make the income they once did.  Some of their jobs were outsourced to India, China, or even to Canada.
            My husband and I are nearing a part of our lives when we should be able to put relatively large sums away for retirement. Our kids are moving out, our debts are gone, and yet we cannot.  This week, we received an electricity bill which is not to be believed.  The same is true of the postmistress, our neighbors, and our daughter.  Everyone has received a huge electricity bill !   The scary thing is that we are frugal and make a lot of things we need ourselves.  Can you imagine how strapped for money we would be if we didn't.?


Sunnybrook Farm said...

We left the middle class years ago or maybe it left us behind. I'm not sure about using the class label as the class warfare stuff got us our current government. I prefer to use the word income as middle income. I know some people who have a lot of money and yet are low class. So we are low income now but act like we are middle class. It is all just words when the money is worthless and the cell phone won't work, maybe we are survivor class.

JaneofVirginia said...

Yes, you make many points here that are absolutely right on. The class warfare which is being stoked by the present regime simply distracts us from the real matter at hand. A deteriorating and poorly managed economy in the US is bad for everyone, from the poorest of the poor to the wealthy, and certainly for those of us who were, or aspire to be middle income.
You are absolutely correct in that it is not money that conveys class. I know poor people who have a lot of class and wealthy people who are classless. I think we should leave aspiring to be Middle Class behind and do exactly as you suggest. I think my family and I will aspire to be of the survivor class. This in itself could be tough.

Gorges Smythe said...

The John Birch Society was telling everyone this 50 years ago, but no-one listened because of their foolishly calling everyone since Adam a communist. However, they were spot-on!

lotta joy said...

My dad built our house piece by piece. As he could pay for a board, a board was placed on the house. I lived the same way. I never bought a car I couldn't pay cash for. I have never owed a penny to anyone. I was never "middle class" since I lived below my means. And now, the middle class no longer exists except in people's mindset. There are the haves, and the have nots who want what the haves have. We, the "middle class" make do, or do without. The difference is we don't hate the ones who have it all. Our attention is focused on trying to keep what we've got and it's getting impossible.

JaneofVirginia said...

Good points, Lotta Joy. I have always thought that upward mobility is a trap and that having something doesn't mean you could afford it, just that you found a way to borrow the money for it. I am not comfortable owing very much money. I just never have been. I do worry about holding on. The changes have been quick. It's been much tougher in the past five years.

JaneofVirginia said...

Yes they were. My Dad was a member of the John Birch Society. He used to joke that he was so conservative that he "made the rest of the John Birch Society look like a bunch of flaming reds". Part of me is glad he is not on Earth to see the Obamunists.

Sandy Livesay said...


What middle class, it really appears most of the middle class are now being considered the lower class. The changes have been quick, I don't for see the economy getting better anytime soon. If we all make it, we will be considered survivors.

JaneofVirginia said...

Yes the transformation has been quick. It used to be that if one worked hard and remained in the same job that a comfortable retirement was a distinct possibility. These were the grandparents who helped with college for grandchildren and took long awaited trips to Europe or the Caribbean. Now, they wonder if they will be able to sell their houses, pay their power bill, retire at any point, or pay for the medications that might keep them functioning. Lord help the survivor class. Thanks for your comments, Sandy.

Pumice said...

My parents made it to the end but only because they paid off their home and were protected by Prop 13. If my dad were in business today he would have gone bankrupt and starved because he would be too proud to take unemployment.

Remember that one of the open promises of our president, before the election, was to raise our electricity bills dramatically. It is good to see that he has kept at least one promise.

Grace and peace.

JaneofVirginia said...

Our last electricity bill which came Tuesday was greater than six hundred dollars. Five years ago, it was a hundred and thirty. Two years ago it was two hundred and twelve. Off grid is not cheap, and we have an off grid back up system, but we should begin to look at going off grid again. We can't do six hundred a month on a regular basis.

dmarks said...

We need much lower gas and energy prices, not higher. A good way to start would be to remove all the special punitive taxes found at all phases of gasoline/fuel production, so it is taxed like any other industry.

So much of the price of a gallon of gas goes to government. Get rid of that, let it be subject to a state's general sales tax and nothing else