Middle class squeeze

From the Herald News:

Middle class workers earning less than previous generation

At age 18, Joe Rocco proudly followed his father in hoisting steel beams and digging foundations. Construction was the ticket to a good salary, benefits and a comfortable lifestyle, his father told him.

And for a while, it was. Rocco bought a five-bedroom house in Whippany and cars that included a 1969 Firebird. But the good life didn’t last. A combination of divorce and the drying up of well-paying construction jobs in recent years forced Rocco to shed the house, then the cars. He finally moved back in with his father in Little Falls and took a job folding T-shirts.

Rocco once earned $27 an hour plus overtime. Now, he earns $10 hourly.

“How can you take care of everything for $10?” asked Rocco, now 44, as he stuffed green sweatshirts into boxes on Tuesday at Falls Screen Printing in Little Falls. “My phone bill is over $130 a month. I have a 12-year-old daughter to take care of. It’s not enough.”

The cornerstone American creed that each generation can do better than the previous one is no longer a safe assumption, according to an analysis of Census income data. Earnings for individuals, specifically men, have fallen dramatically between 1974 and 2004.

Average salaries for men in their 30s went from about $40,000 in 1974, to $35,000 in 2004 in income-adjusted dollars, a drop of about 12 percent.

For some, like Joe Rocco and his father, Rudy, the gap is greater.

Average household incomes grew between 1974 and 2004, primarily because more women took jobs. But the rate of that growth slowed since the 1990s, causing researchers to wonder about the health of the American middle class.

“This really challenges the national attitude in ways that we haven’t had to deal with before,” said John E. Morton of the Economic Mobility Project, a bipartisan coalition of researchers.

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5 Responses to Middle class squeeze

  1. skep-tic says:

    Not coincidentally, the rise of cosumer indebtedness occured during the same 30 year period.

    The middle class has essentially replaced rising income with rising debt

  2. curiousd says:

    2 objective points…

    1) “Change in income between 1964 and 1994: $31,097 to $32,801 (5 percent increase)
    Change in income between 1974 and 2004: $40,210 to $35,010 (12 percent decrease) ”

    so, in 1964 they made 31,087 and in 1974 they made 40,210? i think their inflation adjusted numbers are, um, wrong.

    2) when did making $10/hr (their example) make you middle class? its been a while (less than 20K/yr).

  3. Andra says:

    Joe Rocco’s $130/month phone bill probably includes his cell phone and maybe one for his daughter. I don’t intend to be harsh about this but its kind of the epitome of the situation and why it will be so hard for people that a phone bill of that order is a necessity. My mother was able to hold onto a house for almost 30 years after my father died in 1973 on a salary that never reached $13,000/year. Her highest income from her job as a hospital ward clerk was $6.50/hour. when she retired she had her meager savings, her $150/month pension and Social Security. The 50% ($2500 at its highest) low income elderly adjustment on the RE taxes was a help in holding onto the house until she was almost 80. I’d bet she never had a $20 phone bill.

  4. bergenbuyer says:

    I agree, why do you have a $130 phone bill? Do you also have a $50 cable bill, a $30 internet bill, etc.? I’m fortunate to be paid well enough to afford these things (although my phone bill is not that high), but if I was paid $10/hr, I’d ditch them immediately until I got a better paying job.

    If you can’t afford it, don’t buy it!

  5. bruiser says:

    “The cornerstone American creed that each generation can do better than the previous one is no longer a safe assumption, according to an analysis of Census income data”

    This creed does indeed hold true to this day. The generation of Mexicans and Indians migrating to America are much better off than the generations of Mexicans and Indians that are still in their homeland.

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