Art by Mark Campbell

The American middle class has been hit hard by the economic crisis and the meltdown in the mortgage industry, but it was already struggling long before 2008 as its earnings failed to keep up with increasing costs in housing, education and health care. Saint Mary’s sociology professor Robert Bulman discusses the middle class and the future of the American dream with Saint Mary’s editor Erin Hallissy.

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Robert Bulman.

Q: What is the middle class from a sociology viewpoint?

A: There are several indicators that sociologists use to measure the middle class. One marker is if you have graduated from college.

Another is the kind of job you have. For instance, a middle class job tends to be managerial — a white-collar job in which you earn a salary as opposed to a wage and you have some autonomy instead of always being told what to do.

Income is an important measure of class, but it’s not the only measure as far as a sociologist is concerned. The median income in the United States now is in the low-$50,000s per household, so the lower-middle class would be earning a little bit less than $50,000, the upper-middle class might be earning around $100,000.

Finally, what kind of wealth or assets do you have? One thing that distinguishes the rich from the rest of us is not necessarily that they have higher incomes but that they have more money in the bank, more property owned, more assets. The middle class has some assets, but not a lot, and most are probably tied up with retirement income, home equity and savings for their kids’ college.

Q: How do Americans view the middle class?

A: In general, Americans don’t speak often in terms of class. If pressed, most Americans report that they are in the middle class. Most people know folks who are richer than them, and they know folks who are poorer than them. Therefore, they say they must be in the middle.

I also think the middle class is a class that people like to claim because it is the symbol of America. The image that often comes to mind is that of a suburban homeowner who’s been to college, has a family and has a good job. To the extent to which people aspire to the American dream, they’re aspiring to have a secure middle-class existence.

Q: I’ve heard people who make a lot of money say they’re middle class.

A: I am sure there are doctors, lawyers, folks who make $200,000-plus a year, who consider themselves middle class. If you compare them to folks making $10 million a year, they’re right. But I think there’s an incredible difference between folks who are earning more than $100,000 and someone who’s making $40,000 a year. I’m talking about the middle middle class, someone who is probably making $60,000–$70,000 a year, has a college degree, owns a home and works in a job that has a salary as opposed to a wage.

Q: How important is home ownership to the American middle class?

A: Owning your own home is in many ways the cornerstone of a middle class life. It provides psychological security that as long as you pay your mortgage, you’re not going to be evicted. You can build your life around that home and neighborhood. You really have a stake in a place. It also provides most of the middle class’ economic security because its assets are wrapped up in their home equity.

With the erosion of that equity, you have a growth in economic insecurity, both psychological insecurity and real financial insecurity.

Even before the mortgage meltdown, there was an erosion of security for some members of the middle class, particularly for those who were entering the housing market in the late ’90s and early 2000s, because the housing prices were so high.

Q: When was the middle class strongest?

A: I take it back to post-World War II. There was tremendous economic growth; there was the baby boom expansion; there was a lot of housing development, and there were a lot of government programs to assist development — the building of highways, the G.I. Bill. The middle class really flourished. A lot of folks whose parents had not been to college were able to go to college. This allowed them access to new jobs, higher incomes and more economic security than the previous generation had been able to achieve.

Q: When did things starting getting worse?

A: In 1973, the year of the oil embargo, the economy really started to stagnate for the middle class and their purchasing power began to decline. One or two generations ago, a middle class family was able to live on one income, and it now takes two incomes to enjoy the same quality of life. Wages have not kept up with inflation, in particular for the big-ticket items. The cost of housing, education and health care have increased at a greater pace than wages and salaries. So folks in the middle class are struggling.

Q: Did materialism, which really seemed to grow during the prosperous times of the 1980s and ’90s, contribute to the problem?

A: I can’t speak to that specifically. But one of the interesting dynamics of capitalism is that it requires consumption. For the economy to grow, it’s not enough for manufacturers to produce things, but people need to buy those things. In the postwar environment, there was a mushrooming of wants and needs that fueled the economy because more and more people were buying homes and washing machines and dishwashers. That was a double-edged sword because it helps to fuel the economy, but it also prevents folks from building up more wealth because they’re spending so much in the consumer market.

Q: What about the gap between the middle class and the wealthy?

A: There was economic growth in the ’80s. However, due to the policies and tax structures that Ronald Reagan introduced, most of the benefits went to the wealthy, who expanded their economic holdings exponentially more than the middle class. The same trend continued through the ’90s and into the 2000s.

Q: How significant is that gap?

A: The gap between the rich and the rest of us is not only substantial, but potentially quite damaging to the pursuit of the American dream. The American dream tells us if you go to school, get a good job, work hard and get promoted, you should be able to become upwardly mobile. You should be able buy a nicer house and move to a better neighborhood and save enough money to send your kids to school and to retire comfortably — maybe even become rich. The middle class is going to school and working hard. However, they are on an economic treadmill.

The economic crisis that we’ve seen in the last year has highlighted and accelerated many of these trends. The middle class had equity in their homes, but it has deteriorated in the housing crash and the mortgage crisis, and many middle class folks are feeling a lot less secure than they did a year or two ago. Many are losing ground because their wages have been cut, they’ve lost benefits, they have to pay more for health care, the equity in their home has disappeared and they can no longer tap it for home equity loans.

Another hallmark of the American dream was that you could pass along the benefits of your life to your children, and your children’s lives would be better than your own. We’re seeing that many middle class parents feel unable to save money for their children’s education. We might be facing a generation in which the children of the middle class may not be able to attain the same economic status that their parents did, if these same economic trends continue.

Q: How do employers fit into maintaining a healthy middle class America?

A: They’re crucial. The middle class in America is dependent on a healthy economy and upon employers hiring workers. It’s dependent upon employers providing benefits to provide that middle-class status. It’s dependent upon employers rewarding hard work and providing merit increases. If employers are economically vulnerable, as many of them are, they are for their own self-preservation going to cut back on benefits, lay off workers and renegotiate union salaries to remain profitable. It’s the way capitalism works. And workers are going to bear most of the burden of that.

Q: It seems that workers also provide more for themselves in areas such as retirement, where pensions have been largely replaced by 401(k) accounts.

A: The American ideology is that I don’t need anyone else’s help. If the system treats me fairly, if it doesn’t discriminate against me or put roadblocks in my way, then I will be okay because I am a rugged individualist who can take care of myself and my family.

For the middle class, that ideology has traditionally worked pretty well. With the economic crisis of the past year, I would speculate that many of those middle class folks who had believed the system was fair and their hard work was being rewarded are growing suspicious that things were not what they had been promised.

Q: Is there a growing resentment in the middle class?

A: Absolutely. I think what we saw last summer in the anger in the town hall meetings was the tip of an iceberg of that resentment and the feeling that suddenly folks are feeling economically insecure — folks who previously could take economic security for granted. The target of the bitterness is confusing. Do you blame Barack Obama for attempting to implement a new social program that would provide assistance to the poor, or do you blame corporate America for the excesses that took place due to deregulation? Perhaps for many people it’s easier to blame a new president with a “liberal solution” than it is to blame a very complicated system of capitalism.

Q: You said earlier that it now takes two incomes to support the same middle class lifestyle of the ’50s and ’60s. Although many women now want to work, do a lot have no choice?

A: Dual-income families have become almost a necessity for middle class families to maintain the quality of life that they expect, whereas 30 or 40 years ago, that same quality of life may have been achievable with just one income. A lot of folks are working full time, not necessarily because they want to, but they have to in order to pay the higher mortgage and increased health care premiums and to put some money away for their kids’ future college education.

Q: Will the middle class decline continue?

A: Sociologists try never to predict the future because we’re almost always wrong. If we were having this conversation in 1930, we might have predicted that nothing good can come from this Depression and perhaps Americans would be perpetually in a state of unemployment and poverty. Fifteen to 20 years later, we saw one of the greatest booms of economic expansion that the world’s ever seen.

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