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How do we define middle class as we enter the second decade of the 21st century?

November 21, 2018 by Paul Edwards Leave a Comment

Fundamental changes in the structure of the U.S. economy, combined with increased health-care costs and lack of saving, have created a financial trap for millions of American workers heading into retirement.

Having healthcare insurance that covers most if not all the costs of healthcare – not the phantom policies with $5000 deductibles. In 2016, 37% reported having trouble affording health insurance premiums, up from 27% in 2015; 43% had trouble affording deductibles, up from 34% and 31% had trouble affording copays for doctor visits and prescription drugs, up from 24%.

In 2017, out-of-pocket medical costs, which includes health insurance premiums, copays, and prescription drug costs, pushed the incomes of 10.9 million people below the poverty threshold. That’s 400,000 more people who were impoverished by medical bills in 2017, compared to last year.

Significant equity (25%-50%) in a home or equivalent real estate.

The ability to be paying off all debt and expenses over for at least six months if one of the primary household wage-earners lose their job .

Income that enables the household to save at least 6% of its income.

Retirement funds: 401Ks, IRAs, pensions that will supplement Social Security.

Reliable vehicles for each wage-earner.

If a household needs government assistance in any form (housing, food stamps, Federal Energy), the household has likely slipped out of the middle class.

To be fully middle class, there are assets such as family heirlooms, precious metals and jewels, tools, etc. that can be transferred to the next generation and that will not vanish in an investment bubble or medical emergency.

The ability to provide for their children’s education, extracurricular activities, etc.

Sufficient leisure time to maintain their physical/mental, and spiritual fitness and to get training or otherwise learn new skills and find markets for one’ services in a technology changing economy.

To be middle class today is a continuing struggle for most Americans and yet the strength of America’s skills and the economic productivity of educated Americans is necessary for the nation’s survival.

Filed Under: Changing The Economic Direction Tagged With: leisure time, middle class

Earning a living is essential for “life, liberty and pursuit of happiness.” A proposition for the 2014

December 30, 2013 by Paul Edwards Leave a Comment

For us, the holidays are a break. Our son comes from Bay Area where he designs interfaces. It’s also a time to catch up on things we want to do and some we need to do. For too many people, particularly those past 40, like us, this holiday is a time of despair. Sometimes they blame themselves, but the basic principle at stake here is that the ability to earn a living is at the heart of “life, liberty and pursuit of happiness.”  Even during this Christmas holiday, thousands of workers got pink slips from corporations such as Citibank and Walgreen.

Those being laid off are middle class people who, usually through no fault of their own, are without a job or a business whose clientele are gone or no longer have the funds to use or buy what the business offers.

 laid off employee

If you or a family member is not feeling it personally, you know from the news that federal unemployment insurance benefits are ending for 1.3 million Americans. These were not among those we think of as being poor.

Approximately 40 percent of Americans who have received long-term unemployment benefits since 2008 had previously earned between $30,000 and $75,000 and tw

o-thirds had incomes at least twice the poverty level. These include the young and the old, attorneys, financial executives, information technology experts, web designers, and hospital administrators – people from multiple occupations.  They were working for a company that was acquired, decided to downsize, replacing workers with automation or outsourced – a bad break that can happen to someone holding a job or owning a business dependent on the local or some segment of the economy, which for some reason undergoes change or becoming obsolete.

Most importantly, these people want to work, but often find they are told they are overqualified. For the most part, these are people who made earned their livelihoods through brains and personality. Some think of doing blue collar work, but find they don’t have the skills to become a mechanic or technician.

Health and emotional problems, particularly depress follows the loss of a job. America cannot afford these casualties of the economy. Talent is lost and when people become dependent, they become a burden on family and government institutions. Even when people take lower paying jobs, the economy loses because these people are not able to spend money that stimulate the economy and when they don’t have the money to spend, you can think of this lack of spending as draining the economy.

This problem is not expected to go away. In fact, it’s projected that a total of 5 million unemployed Americans will lose their benefits by the end of 2014.

If the Congress does nothing more in the next year than to make it possible for the millions of Americans who want to work to get the support and retraining needed, then Congress will begin to regain some of the trust needed to keep our way of life.

Comments and questions on the substance of this blogs are welcome. If you have other questions about this website, please contact me directly for a consulting appointment.

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If you think we can help you, we offer webinars and consulting.  mailto:elmstreeteconomy.com

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Filed Under: Changing The Economic Direction, Counseling Tagged With: Earning a living, layoffs, liberty and pursuit of happiness”, middle class, past 40, “life

Can Our Health and Happiness Abide Great Sacrifice?

July 5, 2012 by Sarah Edwards Leave a Comment

A University of Nebraska Medical Center study suggests that improving levels of happiness or satisfaction with life also gives rise to better health in the future.

The study indicates as we become happier and more satisfied with life, we tend to become healthier as well. Mohammad Siahpush, Ph.D., professor of health promotion, who led the study reports that those who expressed feeling happy and satisfied with their lives were more likely to have excellent, good or very good health three years later, as well as an absence of long-term and limiting health concerns and a better overall level of physical health.

This isn’t surprising.  Even four years ago our President affirmed what so many of us are already knew – we’re facing rough waters and stormy times for years to come. “That we are in the midst of crisis is well understood,” he said. “Our nation is at war … our economy is weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices …. [T]he challenges we face are real. They are serious and they are many.” He then called upon us for shared sacrifice.

This has not changed, but does it mean we can expect to be less happy, less satisfied and less healthy in the years ahead? Can sacrifice and satisfaction co-exist in America? That depends on us, doesn’t it?

Certainly if our happiness is tied to comfort, convenience, financial success, and material wealth we can expect some very unhappy and unhealthy folks in the foreseeable future. For nearly a century those are the very things the advertising industry has entrained us to believe are the path to happiness and satisfaction. So in this sense clearly the sacrifices have already begun. A recent article in the New York Times entitled Don’t Indulge. Be Happy cited  a study entitled “From wealth to well-being? Money matters, but less than people think” that found that once people have an income of $75,000,  income beyond does not lead to an increase in happiness.

We need only scan the news each  day to know that’s true. High school sports programs are being cancelled. The number of students accepted for college is down while tuition costs are up and students leave with crippling debt. Foreclosures and bankruptcies are high. Hospitals and retail stores are closing. Millions in retirement funds have been lost. Up to fifteen million jobs have disappeared since 2007.  States are running out of funds for unemployment benefits and cutting basic services. People are having to choose between food or fuel or medication. Some are living out of their cars, even in upscale communities like Santa Barbara, CA. Soup kitchens and food pantries are running out of food as the demand is greater from many who were once in the middle class.

Social Security and Medicare are under discussion for cuts to elderly who are already barely covering their costs for food, shelter, and medical care. As Michael Hiltzik wrote the Los Angeles Times, “Income drops sharply with age, presumably because most income sources become exhausted. For two-thirds of all elderly households, Social Security accounts for more than half of all income, and for one-third of those households, it provides 90%.”

For Americans who have been used to decades of prosperity such sacrifices are a bitter pill, especially for those who are already dealing with them. Few of us are feeling happy or satisfied about our current and projected circumstance. But can we feel happy and satisfied in it?

For the most part I’m not seeing a welcoming spirit of sacrifice as of yet. Though there are occasional news reports of workers willing to take pay cuts to prevent co-workers from being laid off, many Americans aren’t ready to accept the sacrifices they’re already coping with, let alone those ahead to which Obama alludes. Instead I see a lot of indignation and misfortune.

  • Parents furious about 50-student classrooms and cuts in school sports programs.
  • Students committing suicide over student loan debt.
  • People being jailed for debt.
  • Neighbors outraged that people are camping out in cars and RV’s on their neighborhood streets.
  • Protests about cuts in public services as well as cuts they think should be made.
  • Workers demanding plants be kept open and benefits kept in place.
  • ER doctors suing the government for decent reimbursement fees.
  • Teachers demonstrating for teacher’s pay over testing materials.
  • Parents unbelieving that they must drive a long distance get their sick child to the hospital.

I believe we’re seeing this general resistance to accept sacrifice when it touches our personal lives for two reasons:

1) a pervasive sense of entitlement on the one hand and
2) a profound sense of injustice on the other.

We’ve grown to expect an unending stream of the latest, best, fastest, most convenient, easy-to-use products and services of a quantity and quality beyond anything our ancestors could have imagined. But, as the reality of our economic and environmental challenges surge onward unabated, our sense of entitlement will inevitably erode. The question is, into what?

As far as a sense of injustice goes, that will be yet harder to accept. As I overheard one retiree comment, “Sacrifice? I’ve already sacrificed. I worked hard for 48 years and I paid out dearly needed income into Social Security and a 401k every one of those years so that I’d have some security. Now that I’m too old and sick from all the stress of working, 40% of my savings have disappeared at the hands of billionaires in failed financial institutions who are getting billions in bonuses that we’re going to have to sacrifice in order to pay for! And now they have the nerve to talk about cutting back our piddly Social Security and Medicare payments !! Give me a break!”

There is no doubt the greed Obama also alluded to has resulted in grave injustice to many middle-class and low income citizens. So, just how readily we will embrace the need to sacrifice and how satisfied we will be with our circumstance may well depend on how fairly distributed the sacrifices are and how evenly the suffering is spread.

But as psychiatrist and Holocaust survivor Viktor Frankl wrote in his book Man’s Search for Meaning, meaning, and I would say satisfaction and happiness, are not something bestowed upon us. They are something we must find within whatever our circumstances might be.

Do we want to view the years ahead as unsatisfying times of suffering and sacrifice that risk our health and well-being? Or do we want to find meaning in the difficulties we face and draw satisfaction from our efforts to respond to them? It’s up to us.

Filed Under: Whatcha Gonna Do to Stay Afloat Personally Tagged With: college, comfort, convenience, economy, entitlement, financial success, Happiness, Health, high school sports programs, Medicare, middle class, protests, sacrifice, Social Security, student debt, Victor Frankl

Does Being Middle Class Require a New Definition of Success?

July 1, 2012 by Sarah Edwards Leave a Comment

“Who is the middle-class?” This is the most common question we have been asked while doing dozens of interviews.  When economists  are asked about who is middle class, they answer the question by citing specific income ranges. But the ranges vary widely, anywhere from $25,000 to $250,000. So income doesn’t seem to be the key to why 60% of Americans define themselves as middle class.

Middle class is more of a state of mind than a bank balance. We define ourselves as middle class as long as we feel we’re on track to success and thereby to a happy, secure life. But just what is success?

That is the question John Izzo, Ph.D., asked 250 people from all walks of life in writing is book Five Secrets You Must Discover before You Die. You might be surprised at the answers he got.

First, he found that 84% of people he interviewed reported thShopping is a mainstain of a consumer cultureat “having money beyond a basic level of comfort did not increase their personal happiness.”  Second, he found that 81% said the most important factor in career happiness was “being true to yourself.”

Psychologist and associate professor at Knox College, Tim Kasser goes a step further in disconnecting happiness from material success. In his books, The High Price of Materialism and Psychology and Consumer Culture: The Struggle for a Good Life in a Materialistic World, Kasser summarizes extensive research to show that after reaching a basic level of comfort, continually striving for more money and more things actually works against our sense of happiness.

In writing Middle-Class Lifeboat, we found that in choosing to pursue new lifestyles and sometimes new careers, the people we interviewed had re-defined success . It no longer meant making more money or owning more things. They were stepping out of our materialistic consumer culture and found they were HAPPIER!!

So instead of aspiring to some externally-measured, material definition of success, perhaps it’s time for us to re-evaluate what makes us happy and define that as success. What would that be for you? How would it be different from what society’s definition of “success?”

If you think we can help, we offer counseling.

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Comments and questions on the substance of this blogs are welcome. If you have other questions about this website, please contact me directly for a consulting appointment

Filed Under: Changing The Economic Direction, Whatcha Gonna Do to Stay Afloat Personally Tagged With: consumer culture, Materialistic World, middle class, Success

About Me

Paul with his wife, Sarah Edwards, are award-winning authors of 17 books with over 2,000,000 books in print.

Paul provides local marketing consulting through the Small Business Development Center. He is co-founder of a new website: DigitalDocumentPros.com.

Prior to becoming an author, I practiced law, served as CEO of a non-profit, and operated a public affairs consulting practice. [Read more...]

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