We all know something's not right. That despite the promises made to us since childhood, we do not, in fact, have it better than our parents did.
Home values have tanked. Gasoline is up, food is up, healthcare, college tuition, even heating fuel, all up, up, up. Meanwhile, unemployment is at 10% and holding (it's actually much higher if you count everyone out of work). Those in the middle class who did save dutifully for retirement saw their investments plummet along with the economy in 2008. Life for America's middle class has become less about security and more about fear.
So it was with particular interest that the nation listened to President Obama's State of the Union address, which focused on the travails of the middle class. We asked five WalletPop staffers -- middle-class parents all -- to react to the speech with their thoughts on what the middle class in America really needs.
Ann Brenoff - Married, mom of two, homeowner
I am delighted that President Obama wants to focus on creating jobs. He has a ways to go since we've lost 7 million more of them since December 2007, mine included. Which is why my excitement level is somewhat tempered about his offer of a higher child care tax credit. At least 15.3 million of us are out of work and have no salaries to take a tax credit on, so how does this help Middle Class Me?
In California, we have an unemployment rate of 12.6%, 25% higher than the national average. Add in spouses/partners and furloughed employees and those numbers reach seismic proportions in our shaky state. How's this for a counter-proposal: Until those jobs are actually created, maybe Obama could get a little realer with what the unemployed are facing: Unemployment checks that barely cover the gas to go cash them; banks unwilling to lower our mortgages to the going 5% rate they now offer because they'd rather see us default with our higher loans and lose our homes; the indignity of reading how the corporate suits who canned us and ended our decades-long careers got bonuses for doing precisely that?
Want me to feel better about having voted for you, Mr. President? Just tax those fat cats' bonuses at a 95% tax rate and give the money to some poor schmo in the unemployment line. And while you're at it, why are we still fighting W's wars while our children's classrooms spill over into hallways and they don't have enough textbooks to go around? My bottom line: Why should I worry about terrorists destroying my family's life when my own government is doing a fine job at precisely that. I feel like I voted for FDR and got Herbert Hoover instead.
Sign me, hoping your three-year moratorium on "discretionary" spending doesn't regard education as "discretionary."
Julie Tilsner, mom of two, renter
Yeah, yeah, yeah. I listened to the State of the Union address in the car, stuck in traffic. And while it was heartening to hear Obama say the fight wasn't over in regards to healthcare, I'm cynical enough to know we're not going to be getting any substantive change on this front for a long while, if indeed we get anything at all.
I mean, we've already nationalized AIG and the big banks to keep them in business right? How can we possibly afford a pubilc health-care option for us little people? I'm sure every right-wing teabagger out there has fantastic, affordable healthcare. Wish they would tell the rest of us their secret.
For me, it's all about the healthcare. Comprehensive, universal health care for everyone -- like what they've got in every other industralized country, thank you -- would give us our biggest bang for our buck and allow the American middle class to collectively exhale.
I'm a freelance writer. I buy my own healthcare. And every year it gets more expensive. As it stands now I pay $3,600 a year for health insurance for myself, alone, and I'm at the age where it's only going to go up. It also could be canceled at any time, should I actually get sick.
Complicating matters: the comprehensive healthcare program my kids enjoy, Healthy Families, a wonderful example of state and federally-subsidized healthcare, looks to be on the chopping block as my home state of California tries to manage its latest $20 billion deficit. They can get on their father's insurance plan -- when the open enrollment period comes around for that next year. In the meantime, I'll need to purchase market-rate health insurance for each other them -- and that means at least another $500-$600 a month out of my paycheck.
Not a lot if you're a lawyer-turned politician with speaking gigs and other income. But a lot of dosh for your average middle class working joe.
I had such high hopes for a government -funded public option. But I guess it's business-as-usual going foward. We'll figure something out. It's what we working middle class sorts do these days.
Aaron Crowe, married, father of one, homeowner
If the president really wants to get the economy out of the cellar, then the best thing he can do is create good jobs that pay well and tap into America's innovative muscle.
I was laid off a year and a half ago during the recession, and while part-time work that I've picked up has kept our family afloat, what has really kept us stable is my wife having to return to full-time work and the health care benefits that come with her job.
Since the country seems to constantly be in an energy crisis, a government program promoting "green" jobs might be the best way to go to help solve the United States' dependence on foreign oil while getting more people back to work in long-term jobs with benefits. Until we realize that job creation is the solution to the recession, the economy won't get much better.
Sarah Gilbert, married, mother of three, homeowner
Like Julie, I am crushed that the government-funded public option is no longer an option for my family's health care, for which I pay cash from my freelance income. And, given my ability to work from home while my kids run in sock-sliding circles, I won't be taking much advantage of any of these tax credits.
That said, I greatly appreciate the concept. Among a group of five mamas who have been friends since the beginning of the George W. Bush administration, the amount of child care expenses we've collectively paid would be enough to buy a couple of vacation houses. In the early years, some of us paid $10,000 per family; in the past few years, as our families have grown and quality care has become pricier, costs have averaged closer to $18,000 or $20,000. The amount the government believes one should be spending on child care? $3,000 a child. I won't mince words here: the kind of full-time child care that $3,000 buys is an overwhelmed grandmother caring for a dozen kids in her living room, strapping the babies in their car seats and plunking them in front of the TV.
Doubling the child care tax credit, then, is really the very least the government can do to acknowledge how much are families' real costs, when they are juggling career and kids in a climate where only the recklessly brave are willing to let go of a job. Better, however? Would be a great number of measures to ensure "social security" of a more inclusive and lasting sort. Worried about education? Studies show overwhelmingly that children whose primary caregiver is engaged, happy, and stable do far better in school.
Do as nearly every other civilized society has done, and mandate six to 12 months of paid maternity leave to make mothers happier and families more stable. Want more ideas? How about federally-mandated minimum unemployment benefits that are easier to qualify for, pay enough to keep the lights on and the mortgage company at bay, and last longer?
To get better family support, I'd happily give up tax credits that economists have proven don't actually create wealth. Take, for instance, the homebuyer tax credits; there's no evidence that renters are more financially stable than homeowners. That's just a start. President Obama, I've got plenty more ideas where these came from...
Bonnie McCarthy, Married mom of two, homeowner.
As a mother of two school-age children, I listened to our State of the Union with interest, and like President Obama himself, with hope. In his address, the President said, "The best anti-poverty program is a world class education." He referenced the administration's new, Race to the Top program, expected to provide an estimated $4.35 billion dollars to public education.
Funny, $4 billion is exactly the amount the state of California expects to cut from the public education budget in the coming year. I know my state is not alone. My children's school district, Broad Prize winning-Long Beach Unified, needs to cut $90 million.
According to Obama's address, "the success of our children should not depend on where they live." I agree. However, at the same time our elected officials in Washington are standing and applauding – or not, depending upon party lines, my local school board members are also meeting -- to vote on what, and who, should be cut from the school's budget. Layoffs? Definitely. Tutoring? Nope. Summer school is already a goner, class size reduction, school nurses, music, art and computer labs are on the table. From maintenance workers to management, pink slips will fly.
Meanwhile, a high-speed railway project in Tampa is expected to receive around $8 billion in Recovery Act funding to provide new jobs and infrastructure. I believe that math, science and reading are also infrastructure. Job creation? Let's talk about retention, and I don't mean the students who are at risk of not making the grade.
Geoff Williams, married father of two
After reading to my youngest daughter, who turns 6 today, and tucking in our 8-year-old, I went into the bedroom, where my wife was, and we watched the State of the Union speech. Well, "watch" isn't quite the right word. I read about it on blogs, followed it through what people were saying on Facebook and Twitter, and, yes, I actually saw some of the speech on television.
I liked last night's speech well enough. I've heard enough of these state of the union speeches that I rarely believe that half of what any president predicts will come true, but I'm very encouraged that President Obama is still going to try to get some healthcare reform passed. As a self-employed journalist who now has a health savings account, due to no longer
being able to afford the traditional health insurance plan we used to have -- it was originally $800 a month several years ago, and we finally had to abandon it when it climbed to around $1,200 a month -- I think it's obvious that something has to be done. But, sure, I'm biased toward thinking that.
I'm also glad -- though not surprised -- that the economy was so significantly and substantially addressed and that Obama seems to be channeling new energy into trying to improve the jobs market. Not that I need a job, but a lot of the magazines I wrote for, say, a year ago, have disappeared, which made 2009 a challenging year. A strong economy helps all of us. Since my daughters are pretty young, I'm confident that the economy will have rebounded by the time they're in college and getting into the workforce, but that's 10 to 15 years from now. I wouldn't mind having some relief a little sooner than that.
Small Cap Investing
Learn now to invest in small companies the right way.View Course »