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Tess Vigeland: Raise your hand if you think you’re in the middle class.
I can’t see you, but I’m pretty sure lots of hands went up. If you’re one of those listeners, you characterize yourself and your family as not rich and not poor. Politicians love you — in fact, you could argue the middle class is one massive special interest group.
But who are you, really?
We’ll spend this entire special hour of Marketplace Money examining that question.
We open with Marketplace’s Steve Tripoli. He profiles three Marketplace listeners’ households where the occupants are convinced that they are Middle Class: capital M, capital C.
Steve Tripoli: Judy Dunn defines being middle class simply:
Judy Dunn: It means to me you have some choices in your life.
And her family has choices. She lives with her husband and two daughters in Acton, Massachusetts, a comfortable Boston suburb known for its good schools. Living there was a costly choice but at least one they could make — good schools matter to them. And Judy, who’s an artist, got to make another choice.
Dunn: So I do all this decorative work on the surface of the clay…
She’s launching a home-based crafts business that isn’t earning much right now, but does let her be with the kids.
The Dunn’s household income approaches $150,000 but Judy says they’re just middle class, partly because of what it takes to live in a very pricey region.
Her way of putting it is that middle class status can’t be judged on income without context and the costs of raising kids and keeping up even a modest home in her pricey town are real. So Judy says the Dunns have to make plenty of choices:
Dunn: You know, the windows are drafty and so we replaced half the windows because that was what we could afford. And we do that at the trade-off of saying, “OK, do we have a cushion of savings so that no matter what happens we’re OK?”
They save regularly but Judy says it’s not enough for either retirement or college costs. She’s hoping her business will take off or they’ll find some other way to meet those needs down the road.
Now let’s move one hour and one state to the north.
Sarah Cost: I feel like middle class is you have housing, you have shelter, you have clothes on your back and you have food in your stomach.
Matt and Sarah Cost are living much closer to the line.
Cost: We have all three of those things and pretty much nothing more!
They’re in their late 20’s, college-educated and working full-time in the arts world. In New Hampshire, as elsewhere, arts professions are a long way from Wall Street money — $36,000 a year combined.
Matt Cost says with a sigh that they’re “middle class, but poor.”
Matt Cost: We never can’t make the rent, we never can’t eat, but at the end of every month, it’s sort of down to the last penny on those things.
Almost literally the last penny. They keep a handwritten budget that includes rent, student loan and car payments and even quarters for the laundromat. They don’t have cable TV and almost never go out to eat. But by the end of the month Sarah Cost says spending choices still get excruciating.
Sarah Cost: Even renting a movie, you know which is just like $2.99, but I mean sometimes it’s so tight we’re like “Oh God, can we really spend this three dollars?” And then you’re not relaxed anyway because you’re stressing about three dollars like it’s so terrible.
But they’re optimists. Time is on their side and they have health insurance even though it’s costly. But going forward, they know they either have to move up in their professions or find another way.
Back to suburban Boston, where just before Christmas I sat down in a busy coffee house with 30-year-old Elaine Kornbau from the town of Waltham. Here’s her middle-class story:
Elaine Kornbau: I’m getting’ by, but I’m not getting ahead.
Kornbau’s start-up costs for adult life are blocking her way forward. She’s got graduate school bills plus credit card debt from living expenses when she first left school.
She makes $55,000 a year as an editor now but has two side jobs to stay afloat. She admits to small luxuries like dining out but that’s not getting her debt down and she knows it.
Kornbau: At some point, I’m gonna have to make the decision to either take out another loan to pay it down or get on a very strict budget and I think I need to do that sooner rather than later.
In the meantime, nothing — like sickness or a layoff — can go wrong.
Kornbau feels she’s working too hard and if she kicks it up another notch to pay those debts, she can’t see how she’ll get beyond that.
Kornbau: I don’t know how anybody can ever afford to have kids. I don’t know how anybody can afford to buy a house.
Her plan is to try working her way up while keeping an eye out for new opportunities.
So, from where they sit, Judy Dunn, Matt Cost and Elaine Kornbau don’t like the middle class’ position these days:
Dunn: There’s no breathing space. There is absolutely no breathing space…
Matt Cost: My sense is that it’s kind of going downhill…
Kornbau: I honestly don’t know how people get by and, I figure that it must be what I’ve experienced so far is that, you end up getting in debt. It’s like the brand-new kind of indentured servitude…
You get the sense that they and other listeners who wrote us walk a tightrope: They mention housing, health care and education bills weighing them down and hindering efforts to save for the future, which in turn leaves them vulnerable to other setbacks.
And they say their parents had an easier time achieving middle class security.
I’m Steve Tripoli for Marketplace Money.
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