No more middle class:
INDIANAPOLIS — Middle-class neighborhoods, long regarded as incubators for the American dream, are losing ground in cities across the country, shrinking at more than twice the rate of the middle class itself.
In their place, poor and rich neighborhoods are both on the rise, as cities and suburbs have become increasingly segregated by income, according to a Brookings Institution study released Thursday. It found that as a share of all urban and suburban neighborhoods, middle-income neighborhoods in the nation’s 100 largest metro areas have declined from 58 percent in 1970 to 41 percent in 2000.
Widening income inequality in the United States has been well documented in recent years, but the Brookings analysis of census data uncovered a much more accelerated decline in communities that house the middle class. It far outpaced the decline of seven percentage points between 1970 and 2000 in the proportion of middle-income families living in and around cities.
Middle-income neighborhoods — where families earn 80 to 120 percent of the local median income — have plunged by more than 20 percent as a share of all neighborhoods in Baltimore, Chicago, Los Angeles and Philadelphia. They are down 10 percent in the Washington area.
Yep. Either you’re rich, or poor. There’s no real middle left.
When I lived in the Hellmouth, I was surprised at how many people I met from nice, middle-class homes who were in serious financial trouble. I remember this one guy who had sold two of their three cars to stay afloat (IT manager) and his wife was now doing home daycare under the table; he was a wreck. He’d been looking for work for two years, with no luck.
He wasn’t alone. I met people all the time who were worried about foreclosure, people who had college degrees and, until recently, good jobs. Part of the problem was that they’d leveraged so much home equity for dumb stuff: shinier, newer cars, vacations, pools, expensive electronic gadgets, credit card debt.
It’s only going to get worse. As home values continue to drop, we’ll see a repeat of the 1980s - people who can’t afford their mortgages, but who can’t afford to sell because they don’t have any equity left. The people who still have good jobs are taking on huge mortgages for houses that, sooner or later, they won’t be able to heat.
Sometimes it’s good to be poor - and a renter. I can actually afford to live in a neighborhood where I’d never be able to buy.
This is why I don’t have a mortgage, though in theory I could afford one. Housing is still off the charts out here in greater Seattle, and when my divorce happened, followed by being totally repsonsible for my daughter’s daily welfare, I had to make some hard choices.
Pay off the lawyers.
Pay off the debt not paid to pay off the lawyers.
Save for college for the daughter.
Save for retirement.
Save for a car within a few years. (When this all fell apart, the car was at 60K - I was able to keep in going to 180K before I finally had to deal with a replacement, thankfully.)
Save for a home.
Well, almost all of this stuff got taken care of, but the house thing just kept moving continuously further out of reach. And when I saw what it would take to get there, well, was it worth it?
I took a last look in 2005, got sick in no time flat of the games played by sellers in a tight market, and rented a house for half of what I would have dumped into a mortgage and taxes on same.
Some things you have to let go of to get what you really need. Trite, but true.
signs of the times - driving thru the main line yesterday - every (yes, every single one i passed, and there’s lots of them) house with a for sale sign had a new “reduced price” tag too.
scared to even think what this world will look like a year from now.
Look at the grey haired men in their 50’s and 60’s working in the Home Depot and the supermarkets.
Companies like Ford and GM are pushing tens of thousands of men and women in their 50’s out of the workforce into “early retirement”, a nice name for long term unemployment.