Forget the GDP Increase; the Middle Class Is Getting Hammered
In spite of the one quarter GDP increase of 4.1 percent, the economy is not doing well for the majority of middle class Americans. Journalist Alissa Quart goes looking for the real America.
“It’s the economy, stupid.” Those words have become ingrained into our politics. But seldom have we seen such a disconnect between raw data, the kind that President Donald Trump bragged about on Friday, and the economy people are actually living in.
Journalist Alissa Quart, in her new book Squeezed: Why Our Families Can’t Afford America, went looking for the real America. In this WhoWhatWhy podcast she talks to Jeff Schechtman about what she found.
She discovered an America that is a far cry from one where anyone is jumping up and down over a 4.1 percent GDP increase in a single quarter. In fact, after ten years of steady growth, which began during the Obama presidency, the overhang of the Great Recession as well as some negative employment and economic trends that started before the recession are still with us.
Wages have been stagnant, housing costs continue to go up, health care costs continue to rise, education requires more and more debt, and self employment and the gig economy have not helped. All of this is before we are even really feeling the full impact of automation and AI.
Quart argues that we have to reassess what we value in society. Instead of being so happy at the lower cost of consumer goods — like our phones, computers, and TVs — we need to be far more concerned that the cost of basic necessities like healthcare, child care, senior care, education, and housing have skyrocketed.
Quart reminds us that this is not a problem limited to the uneducated. She talks to Schechtman about the plight of professors, school teachers, health professionals, and journalists.
According to statistics, kids today have only a 50/50 chance of doing better than their parents.
Equally striking is how few of these would-be members of the middle class are politically engaged. They’re exhausted from just getting from bind to bind.
Many are cobbling together patchwork solutions, like co-living arrangements and shared child care. But, Quart explains, for those struggling, a lot of time is often spent watching the 1 percent on television — viewing a kind of “aspirational porn.”
Maybe that’s also how Trump got a toehold with so many of these same people.
Before you hear the next boastful presidential report on the economy, this is a must listen.
Alissa Quart is the author of Squeezed: Why Our Families Can’t Afford America (Ecco Press, June 26, 2018).
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|Jeff Schechtman:||Thanks for joining us on Radio WhoWhatWhy, I’m Jeff Schechtman. A one-quarter uptick in the GDP does not define the economy and the reality of people living in it. According to the Associated Press, the data shows that the falling unemployment rate and gains in home values reflect the continuation of the recovery rather than any major changes made since the Trump administration began in 2017. Wherever you are in the political spectrum, we should be able to at least agree on a set of facts, that there are forces reshaping our society. The cost of housing, particularly in our cities, continues to rise. The cost of higher education, healthcare, and quality daycare continue to take a larger and larger part of individual and family income.|
|Income inequality is growing. The impact of automation in AI is only in its infancy. And a freelance and gig economy in recent political moves have shattered the ability of workers to bargain collectively, all at a time when the social safety net of Medicare, social security, and pensions are under siege. What was once the middle class is being hollowed out. There is no question that some people are doing well in this economy, even more than the proverbial one percent, as evidenced by the fact that retail sales are up, housing sales are holding steady, and the technical unemployment numbers are low. There’s no question, though, that as the song lyrics go, “There’s something happening here” and “What it is, ain’t exactly clear”. Whatever it is, the net result, even with a blip in the gross domestic product is hurting and squeezing a lot of people.|
|We’re going to talk about this today with my guest, Alissa Quart. Alissa writes the Outclassed column for the Guardian. She’s executive editor of the Economic Hardship Reporting Project. She was a Nieman fellow at Harvard and has been nominated for an Emmy in a national magazine award. Her latest book is Squeezed: Why Our Families Can’t Afford America. It is my pleasure to welcome Alissa Quart to Radio WhoWhatWhy. Alissa, thanks so much for joining us.|
|Alissa Quart:||Oh, thank you so much, Jeff.|
|Jeff Schechtman:||How do we define the middle class today? Let’s begin with really what we mean by middle class.|
|Alissa Quart:||Well, according to Pew, it’s people with incomes 42,000 to 125,000. That’s roughly 50% of US households. And it also is an imaginary category. As I argue in my book, it’s an idea. To be middle class is to be stable, to secure. You weren’t overreaching, you were paying your bills on time. You had a pension, potentially. You owned your own home, right? You could rely on paying for your own kid’s college, and they’d go to college. But now, 55% of US households worry about paying bills. Out of that number, a bunch of them are middle class.|
|Jeff Schechtman:||And to what extent are the changes that we’re seeing today, and the economic problems that we see today — many of which you write about, we’ll talk more about them — how much of it is, in your view, an overhang from the 2008-2009 recession?|
|Alissa Quart:||I think it definitely stems from that and also from trends that started in the late 70s even. And generally, an absence of the safety net for families. Some of these are long-term problems that have been with us for a while. Some of this is middle term as in “after the recession”. And I think some of this, in terms of robotics and automation, is just beginning.|
|Jeff Schechtman:||To what extent in your view… has this been as a result of many of these economic forces that we can talk about and how much of it has been as a result of deliberate policy decisions that have been made that have exacerbated this situation?|
|Alissa Quart:||I think if you look at tax policy and especially the recent tax reform, you’re going to see people say… who are self-employed, who have it worse now than they did in the past. And you have to wonder, “This is not the natural order of things.” Right? Many middle class people are now contract workers. That means that they don’t work on a staff job, right? They are often self-employed on some level. And they’re going to get dinged in greater numbers. And then you’re also seeing things like the cost of college doubling since 1996, public universities and private much more. The cost of living has also increased, not keeping up with inflation for people with aspirations for the American dream. That’s not, again, natural. I mean, there are things that are just happening, but then there’s a lot of things that people in this country are making happen.|
|Jeff Schechtman:||One of the things that certainly has happened is that many of these changes, whether it’s the gig economy, whether it’s the impact with technology and automation… And as you say, that’s still in its infancy. That none of those things have been seriously addressed within the broader economic framework.|
|Alissa Quart:||No, exactly. I just wrote a piece, an excerpt from my book in Money magazine, I was making this point that the Trump administration is not even addressing automation seemingly at all. There’s no plan, even the nominal one for apprenticeships. How are we going to do…? And it’s going to mostly be women’s jobs. And it will be everything from retail work to pharmacists to journalists that they’re coming for, the robots. We’re seeing robots moving into journalism, companies like Automated Insights, which is an oxymoron. That’s producing copy that used to be written by human beings, and now it’s written by a digital content provider. Or we see pharmacists being replaced by robots. Or we see retail workers being replaced by robots. And the Trump administration doesn’t have any plan, seemingly, for either retraining these workers or offering an income guarantee when their jobs go.|
|Jeff Schechtman:||One of the things you point out, also, is that even those that are educated —
and you talk about law school graduates, and teachers, and adjunct college professors — that there is a problem there, too.
|Alissa Quart:||Yeah. I mean, one of the things that was interesting when I was talking to the adjuncts, those are the professors who don’t work full time. They do courses piecemeal, and they don’t have health insurance. They don’t work for a single university or college, often. And 62% of them makes something like $20,000 a year. When you talk to these people, you’re like, “Wow. My own parents were university professors.” They were tenured. And now, today, at least 40-50% of college professors are adjuncts like these people. They’re making $20,000 a year, maybe. I met one who is living in her car. This is not the image that we have of what a professor’s life is like.|
|Jeff Schechtman:||How much of this goes to the heart of thinking about what we value and what’s important to a society?|
|Alissa Quart:||I think a huge amount. And I’m talking about care of different kinds in the book, that we need to reframe our relationship to care as a society and individually, which means we have to think about mothers, not penalizing mothers for their having daycare needs or for having children at all, which statistically employers now pay working mothers less. And it means, we have to stop penalizing people who are educators who are, in a sense, caring for our society by underpaying them relentlessly. The book is sort of looking at care in different guises. The care of parents, the care of caregivers, the care of school teachers, and professors, et cetera, and how they’re all suffering. They’re suffering in a sense for having a heart.|
|Jeff Schechtman:||What percentage of the population are we talking about in terms of these middle-class folks who are being squeezed?|
|Alissa Quart:||You know, two-thirds of women with kids under six are now working. And if we think that daycare is something like 30% of a lot of people’s income. That’s a lot of people. I mean, that’s a lot of people who are not… Unless you’re part of the top 1% or even the top 10%, you’re giving a huge amount of your income to daycare, and then to housing, and then to college education when your kids are old enough, and your own student debt, and then to healthcare, which is another form of debt that a lot of the subjects I spoke to had. And then in addition, 17% of the US workforce has unpredictable hours, which means variable schedules at their employer’s discretion. That’s another way that people are squeezed, and I write about that in the book. They’re squeezed in terms of their time. They’re working strange hours. They’re not necessarily have secure jobs. And then they have all these pressures on their checkbooks.|
|Jeff Schechtman:||Talk about the nexus between all of this and the numbers that we hear often, even in the mainstream media about the unemployment numbers being low, the economy booming, retail sales being up in many places. Talk about that.|
|Alissa Quart:||Yes. I think if we think about long-term and short-term… I mean, short-term things are looking a little rosier, although I keep wondering, “What is the quality of those jobs?” I mean, when I look at other numbers, I see that more people are working multiple jobs than they did in 2016. Maybe job numbers are up, but I’m wondering if those people are working many jobs or two jobs. Do they want to be? Are they the jobs they trained for? I mean, what I’m seeing on the ground is, “No, they’re not the quality work that they wanted.” I guess I am suspiciously somewhat hopeful, but yet I really don’t believe that this is going to last either. Finally, we have to think about wages. I mean, are the wages keeping up? Are these new jobs or old jobs that have come back as well-paid as the one’s that people used to have?|
|Jeff Schechtman:||Well, they’re not. I mean, statistics show that.|
|Jeff Schechtman:||While we talk about the unemployment numbers being lower, wages certainly are stagnant. And many of the people that are working today, even full-time, and even some of those with benefits, are still being paid significantly less than five years ago.|
|Alissa Quart:||Yeah. People used to talk about something called “standard of living”. One of the points I make in my book is no one talks about that anymore. You know? There’s sort of an assumption that the quality of life is not really the point. It’s just, “Oh, yeah. You finally have a job.”|
|Jeff Schechtman:||I mean, survival more than quality of life seems to be the standard today.|
|Alissa Quart:||Mm-hmm (affirmative), exactly.|
|Jeff Schechtman:||Talk a little bit about housing, and what your work shows you, and what your reporting shows you in that regard.|
|Alissa Quart:||I mean, you’re calling me from California, which is some of the most expensive housing is in the San Francisco area, and San Jose. This was the thing that was squeezing the people I spoke to the most, I’d say. The Uber-driving school teachers I interviewed who are in San Francisco and San Jose were making each $64,000 to $69,000, and yet they had to drive Ubers on nights and weekends and grading papers at stoplights because they couldn’t pay the $680,000 for the apartment or the $3,000 for the apartment to rent. And they had to get roommates. You know, these are middle aged people. To me, this is illustrating the emergency in some of our cities for middle class people. And I’m sure you’re familiar with that number that just came out, that you could be considered a lower income if you’re earning $117,000 in the San Francisco area. How are you going to afford real estate near where you guys are? I mean, how much does a house cost around Napa?|
|Jeff Schechtman:||Well, the median price right now is about 600,000.|
|Alissa Quart:||Exactly. How is a school teacher is making 69,000? And in lots of places in the country, people say, “Oh, that’s fine.” But no, they’re not even going to get a mortgage.|
|Jeff Schechtman:||To what extent are people that are being squeezed thinking about solutions needing to come from public policy?|
|Alissa Quart:||You know, one of the things you see with people who are being squeezed is decision fatigue, this kind of exhaustion. And they start to just try to survive, as you just put it. And they’re not always thinking, “Can I see the system changes? That would help me.” It’s more like, “How do I get out of this bind that I’m in?” You know, some of them did. They started organizing. One of the adjuncts I profiled, she ultimately found some success as a speech pathologist. She finally has a good job that she just wrote me about, but when she was in the book, her name’s Brie. When I was reporting on the last five years, she started to organize adjuncts to try to get their pay raised in inventive ways. That was a System Six that she discovered.|
|Or people would organize to try to live together in these co-parenting situations where they’re not biologically or romantically linked, but they’re living in the same house together. And they did that to save on rent and raise their children together to save on daycare. I felt like there were kind of an awareness of the system problems and sometimes sort of patchwork fixes that were in relationship to that. Sometimes people started to organize for candidates. And I feel like in New York City, we just saw the election of Alexandria Ocasio-Cortez in Queens, a very unexpected challenge who wants Medicare for All. And she’s 28 years old, had worked as a bartender, is middle precariat, a precarious middle class person. And I feel like that’s the kind of voting that comes out of being squeezed, when you realize, “Oh, my interests are actually aligned with other workers and not just my 1% betters.”|
|Jeff Schechtman:||And one of the things that we’ve certainly seen over the years, and it’s one of the things arguably that’s led to lack of policy in some of these areas, is individuals that have voted against their own economic interests.|
|Alissa Quart:||It’s true, yeah. We can see the Trump… I mean, one thing that was very interesting to me, I run an organization called “The Economic Hardship Reporting Project”, which was founded by Barbara Ehrenreich. And I took over in its early days. Whatever, we give grants to lower-income journalists among other things. And we were reporting on the rural areas that are the poorest in this country. And a lot of them were Trump-voting areas. And I’m thinking, “Did these people in Alabama and Kentucky think that Trump is going to help bring Broadband? Or all the things that are missing from where they’re at, it’s keeping them poor, right? They’re cut off. Anyways, it was instructive.|
|Jeff Schechtman:||Within the rural areas, talk a little bit about the desperation that you see in those places.|
|Alissa Quart:||Yeah. I mean, a lot of my book is concentrated in non-rural areas and sort of urban-focused, partially because of the cost of living is so much higher in cities, so it would be more dramatic. Things I have seen with the middle class is that once they’re in rural areas, sometimes their life becomes more affordable, but they’re cut off from centers where they could be getting employment. Other problems are created, right? They’re not network anymore. They can’t do their graphic art, or their law, or whatever. They moved far afield into these agrarian places so they can actually buy a house, but they can’t then get the jobs that they need. And that’s the kind of familiar refrain with some of the middle precariat in rural areas, that they’re cut off from work.|
|Jeff Schechtman:||One of the things that we’re seeing today — and it’s unclear how well this is going to play out. It hasn’t happened to scale yet, but kind of a shifting of the population, the people in some of these urban areas, San Francisco being a good example, that have got so outrageously expensive are starting to move to more rural parts of the country. And with the possibility of gentrification happening in some of these rural areas.|
|Alissa Quart:||That’s interesting. That could be kind of like a new naturalism. I don’t know, fascinating. I mean, I’ve heard about that outside of Denver where people, the very poor, often the drug-addled and quite poor people moving into the countryside outside of Denver because it got so expensive. Yeah. I’m sure that’s going to happen.|
|Jeff Schechtman:||What exists in your reporting in terms of the aspirational nature of some of these people that are being squeezed? Because there’s a sense in some of the stories you tell of people that have given up, that the frustration has become so overwhelming.|
|Alissa Quart:||Yeah. I mean, I think there is… I don’t know. In a way, I don’t know if they’ve given up, but sometimes they’re going in for the wrong things. I write about what I call “The Second Act Industry”, which are these certificate programs for profit graduate schools that sometimes prey on the anxiety of middle aged people who have been laid off or downsized. And then they go into these… these people in their 40s would go into these new programs, and then they’ll wind up in debt. And then they go get hired at a lower wage than before or maybe not at all. Then they’ll be carrying around this debt. I don’t know if that’s an absence of aspiration or if it’s just been misdirected into things that aren’t actually helpful just because we’ve been told, “Education, education, education.” As I said, for some people like that academic who became a speech pathologist in my book, it works. And then for other people, it really doesn’t. We need to be careful about that.|
|Also, one thing that I’ve noticed people doing is losing themselves in television. I talked about that in the book. And I’ve done that myself, where you start watching this television that’s all about the 1%, about the wealthiest that are acting with impunity. Or maybe hedge fund guys… and there’s some slightly villainous, but the shows that they’re about love them and treat that… the show kind of valorizes people. And in a kind of stupor we’re watching these shows of escaping our own precariousness into this hyper-wealth. I talked to a few people who felt like that, who were just like, “I just Netflix binge.” You know? And it can be a tendency, right? That’s where the aspiration starts to winnow away.|
|Jeff Schechtman:||And part of that comes from this widening income inequality gap that we see that you write about.|
|Alissa Quart:||Yeah. I mean, I think below all of this is income inequality. That’s kind of coursing under this. You have the top Americans, now averaging 40 times more income than the bottom 90%. You have increasingly contingent work for those people in the bottom 90% who are working part-time, or piecemeal, and multiple jobs, as I said before. And then you have less mobility. One interesting stata I came across, is in my book, is people born in the 1940s were almost certain to do better than their parents by the time they were 30 years old in the 70s. People born in the 1980s who are now in their 30s have a 50/50 chance of doing better than their parents. It’s a downward slope. It’s a downward gradient, which is pretty intense. And I see it in my own life with the people I know whose parents had pensions and some kind of security, and it isn’t there anymore.|
|Jeff Schechtman:||Where do you see all of this leading?|
|Alissa Quart:||I’m hopeful about certain things. I’m hopeful about greater solidarity. As I said these new kind of candidates who are cropping up, who are marshalling this local energy… I’m optimistic about things like universal pre-k, which has launched in New York City on a mass scale, and 3-K. And I think more programs like that where the municipality pays for the education of its youngest citizens. That makes me happy and optimistic. I think if we look around, also, there’s other movements that we can feel good about. And we have to work to make sure they go the right direction, like #MeToo or gay marriage. And when you look at that, you think, “Why couldn’t there be things like universal pre-k or maternity leave for more than… Right now, it’s only 14% of the population have paid-leave jobs. That’s only 14% for people. What if we had 50% of people had paid leave or 100%? And then you think of, “Oh, it’s impossible. Oh, it’s pie in the sky.” And then you think, “Well, no. Look at #MeToo.” It’s overnight the norms have changed and shifted. And that’s all it takes really.|
|Jeff Schechtman:||Talk a little bit about generational differences that you see and how millennials in particular are looking at all of this?|
|Alissa Quart:||One of the things I came across, when I was writing this, is a lot of people who were millennials are by now in their 30s, in terms of their years could have children or be planning families, but they couldn’t afford it. And I’m getting emails since the book came out from people with MBAs. There’s a new business development who say they’re not having children yet because they can’t afford it. That’s interesting. I mean, I think for my generation, I guess I’m generation X. We were less aware of… we went ahead and had families. And then we realized that it was going to be really hard. We didn’t quite realize that until we had kids. But they’re realizing it before, because they came of age during recession. I think it’s affecting the rates that people are having children. It’s definitely affecting home ownership. Those were interesting exchanges that I was having.|
|Jeff Schechtman:||It’s interesting also to think about where all of this has to circle back in terms of the broader economy. As more and more people are struggling, as more and more people are hitting the wall, that it has to have broader economic impact.|
|Alissa Quart:||Well, yeah. More and more people who are dissatisfied and hopefully will start to organize less fractiously and vote differently. I mean, that would be the best possible thing to come out of this. I don’t know if it’s possible. I also wonder what’s going to happen to jobs. I write about this in my book, doing what you love, which is something that people in my parents’ generation who are a little hippy-ish, they’d say, “Follow your dreams, your parachute. What color’s your parachute? Do what you love. Be creative.” Now, it’s a complicated calculus. Because, I have a daughter who loves to draw and write, but I’m not saying, “Go ahead, be a writer.” I try to give her… I say, “Be an architect.” Even that, who knows. “Be a coder, and then make drawings on the side.” These are the kinds of calculations, emotional and professional calculations, that we’re being asked to make now.|
|Jeff Schechtman:||Alissa Quart, her book is Squeezed: Why Our Families Can’t Afford America. Alissa, I thank you so much for spending time with us here on Radio WhoWhatWhy.|
|Alissa Quart:||Oh, thank you, Jeff. It’s been a pleasure.|
|Jeff Schechtman:||Thank you. And thank you for listening and for joining us here on Radio WhoWhatWhy. I hope you join us next week for another Radio WhoWhatWhy podcast. I’m Jeff Schechtman. If you liked this podcast, please feel free to share and help others find it by rating and reviewing it on iTunes. You can also support this podcast and all the work we do by going to WhoWhatWhy.org/donate.|