Mother Talkers

Are We Worse Off Than Our Parents?

by Elisa

Fri May 16, 2008 at 12:22:52 PM PDT

Salon ran a depressing piece stating the obvious: Due to increasing college and retirement costs as well as stagnant wages, we are the first generation to be worse off than our parents. While the American Dream is out of reach for more people, the richest minority has experienced even greater riches not seen since the roaring '20s, according to the article.

Salon's Katharine Mieszkowski conducted an interview with Nan Mooney, author of the newly released (Not) Keeping Up With Our Parents: The Decline of the Professional Middle Class to shed more light on this phenomenon. Here is an excerpt:

How would you characterize the educated middle-class professional you're writing about?

These are people who went to college and have at least a four-year degree. Oftentimes, they have extended education beyond that, a master's or a Ph.D. They're people who work in white-collar professions, usually not the high-end professions like law or medicine or finance.

Why did you want to write about this group?

Because I fall into this group and so many people I know fall into this group, and I feel like we fall under the umbrella of having done everything they say you're supposed to do to be financially secure in America.

There is this myth that if everyone could just go to college and get the proper job skills we would all be financially comfortable, and I was looking around me and saying, "Well, that's not true."

But if you have a college education you're more likely to be financially secure than if you have only a high school education.

Yes, absolutely. But the rhetoric goes beyond that. It says that you will be secure, and you will be comfortable. If you look at the rates of bankruptcies of people who are getting in deep credit-card debt, it's not only the people with the high-school educations. It's traveled well into what we consider the professional middle class.

How has college debt risen for this group in a generation?

In the '70s, we were barely taking out student loans. In 1977, collectively students were borrowing about $6 billion. By now, they're borrowing over $85 billion. That's a remarkable number. The number of students enrolled in college grew 44 percent between 1977 and 2003, but student loan volume rose 833 percent in that same time period.

There are fewer grants and scholarships available. If students go through graduate school, they can end up taking out over $100,000 of student loans. And if you go into a field that's not high-paying that can be a real burden on you for 20, 30, 40 years.

We are seeing more people going to college, which is definitely a positive move, but they're getting into a lot of debt to do it. The college degree now is what the high school degree used to be. You really need a basic bachelor's degree in order to be eligible for a lot of jobs.

  • ::

As Mooney pointed out, the costs for healthcare and retirement are now shouldered by workers -- on top of student loans. She dismissed the notion that we are in debt because we spend too much money on lattes and luxury items, although she admitted that American homes are getting bigger and filling up with fancy TV sets.

There is this mythology that it's the individual's fault, because America is the country of individualism. These personal-finance books promote the idea that you can be a millionaire too. And I think it takes the pressure off government and employers to help.

Are people actually spending a higher percentage of their income on the necessities, like healthcare and housing, than they did even in the '70s?

Yes, and that's been a critical shift. Consumer spending is about the same now as it was in the '70s. But we're spending more on items that require regular monthly payments, things like childcare, healthcare, housing, things that we can't give up if money gets tighter, if someone loses a job, or gets a pay cut.

Whereas if we were spending more money on buying new suits, or new dining sets, or just lattes, it would be something we could give up. Obviously, you can't say: "OK, this month I'm not going to pay the childcare, or I'm not going to pay the mortgage..."

How do you reconcile the picture you're painting of this declining middle class with the fact that the average [new] American house size has more than doubled since the '50s -- it's now at more than 2,300 square feet. Or, that the average American home now has more TVs than people?

TVs are less expensive now, so it's not as much of a luxury as it used to be. Houses are being built bigger, and we buy the houses that are available to us.

But it's a mixed bag. We do need to lower some financial expectations, like thinking that you should be able to have a big house with four bedrooms and three bathrooms. I think that as part of the educated middle class we need to scale back our expectations about what that means. It doesn't necessarily mean the things that it meant even in our parents' day of being able to have two cars, because middle-class means something different now. I also think that we should be pushing for help in areas where we're having to spend a lot of our money, especially those major areas like healthcare, childcare.

Finally, she pointed out how the American ideal of rugged individualism is keeping many educated "middle class" people from asking the government for help, or even being involved politically.

Did you find among the people you interviewed that their shame about their problems kept them from being more politicized about them, rather than thinking of them in terms of their own personal mistakes or shortcomings?

Yes, I think that absolutely happens. There is a whole rhetoric in this country that the more you make the better you are. People really fall for that. They feel ashamed that they don't have enough money, especially as they get older, because as you get older you're supposed to get more financially stable, and you aren't supposed to make the kind of foolish choices that you're allowed in your 20s. We feel like we have failed, and that we're doing something wrong, and we hide it.

So, we don't admit to friends and family that we have a huge amount of debt, or that we're having trouble paying our mortgage.

We can go out there and advocate for poor people to make more money -- that feels safe and OK -- but to say that we aren't making enough, or that we aren't getting enough benefits makes us feel like we're not successful.

Good food for thought.

Tags: parents, middle class, Salon (all tags)

Permalink | 9 comments

  • I am a bit embarrassed (0 / 0)

    to be complaining.  We are far from wealthy, but my husband earns a decent income.  We've been lucky enough  to be able to live and raise a large family on his income alone.  But I gotta tell you, we do worry.  We can't help our kids with college nearly as much as we would like to.  Retirement?  My poor husband is probably going to have to work until he's at least 65.   And lets just be honest....expenses keep on increasing and our income is NOT keeping pace.  Ok, so we can live with a little less disposable income.  We can do a better job in cutting corners, but what if we have another 10 years like the previous eight?  

    My parents didn't really have it better or worse, I suppose, in most areas...except for those defined retirement/pension benefits.  I know there was a peace of mind they had because of this that many, if not most, of us will never have.

    We were fairly lucky, too, in starting out earlier than many other MT posters.  We weren't laden with student debt.  Heck, when we moved here 18 years ago, I was already checking out tuition cost.  Well, guess what?  Tuition at our local colleges and universities is already four times higher than it was then.  My kids are taking on debt.  I worry about them quite a bit.  They just aren't going to have many options in life, and unfortunately, most of their options will revolve around money, or lack thereof.

    by tjb22 on Fri May 16, 2008 at 04:31:53 PM PDT

  • The other problem... (0 / 0)

    One of the biggest problems is the new student loan industry - at one time student loans were only 2 or 3 percent interest, now many students are paying a lot of interest and it's making it impossible to buy a house or get ahead.

    The other problem is all of these diploma mills popping up that promise a quick degree and have exorbitant tuition rates (and most of the credits don't transfer). My step-son is only 5 years younger than I am but what a difference in attitude!

    He refuses to look at the classes offered at the local community college, he won't look into adult ed - we wants a degree quick and he doesn't want to take math or English. I think part of it IS attitude and part of it is lack of regulation that allows some online and technology schools to really take advantage of people.

    Another big problem in our area is lack of decent public transportation. You used to be able to buy a car that would get you from point A to point B for about $2000 - now you can't find anything that will run for more than a few months for under $9,000. Insurance rates have skyrocketed as well.

    It's a problem for parents and step-parents as well. How long are we expected to support a 25 year old that shows no interest in growing up? We actually live below our income level so we have money in case of emergency, can send our son to a good school, and have a little extra spending money. This means a smaller house though and having my stepson in our spare room (the playroom my 3 year old had to give up) for the past year is pretty frustrating. If he was making any progress I wouldn't be so annoyed, but it seems like he expects us to support him indefinitely. I was all for him moving in - but it was supposed to be short term but there's no end in sight.

    Anyway - done ranting - that's just my POV.

    Stephanie Schiff Virginia Beach, VA Bush made me a Democrat, Obama made me a believer!

    by StephSchiff on Fri May 16, 2008 at 05:16:36 PM PDT

    • Oh, we had a run in with one of those (0 / 0)

      shady private colleges.  My daughter was determined to attend one for her first year.  They offered coursework in her major, small class sizes, etc.  Well, as far as I know, this might be true.  Maybe the quality of education offered is quite good...but, it should be for more than $10,000/yr.  So, she registers for classes, and in just a few days, we received paperwork through the mail stating that a loan had been given in our name  to cover expenses.  Private loan company.  Full amount that we were supposed to start paying on immediately.  They offered her nothing else...not even the option of any subsidized loans.  

      My kids have all taken advantage of two years at the lower priced community college.  It does offer excellent preparation and along with several state universities was in the vanguard of offering "seamless transitioning" to the universities for the completion of a bachelor's degree.  This is a big deal as the tuition at the community college is about $3000-$3500/yr vs. the universities' nearly $10,000/yr in tuition alone.

      How long do they need to get on with their lives?  I don't know.  I still have a nearly 24 year old living at home.  To be fair, however, she works full time as a manager in a retail store and completely pays her own way.  We've helped her out from time to time, but we almost feel obligated to do so because we've helped the other kids.  

      by tjb22 on Fri May 16, 2008 at 05:27:46 PM PDT

      [ Parent ]

    • sounds like time for The Talk (0 / 0)

      What are your DH's thoughts about his son's life path?  I think if you're resentful it might help to talk to your DH and maybe come up with a plan, with a well-defined timeline, to help your stepson realize there's no free lunch.  One of my sibs needed that kind of push.  It was hard for the parents, and initially hard for the kid, but they got past it once she attained some independence.

      by mamacita on Fri May 16, 2008 at 07:32:02 PM PDT

      [ Parent ]

  • Huh. This is a tough one. (0 / 0)

    My husband and I currently earn more than my parents were earning when they retired.  (how absurd is that?!?!?) We are definitely upper middle class, and comfortable.  However.

    Our mortgage is literally five times what theirs was.  And they had a 15 year mortgage!

    My dad stayed home during grammar school years trying to get his own business off the ground.  I don't feel I can stop working right now.

    They didn't even start THINKING about saving for college until I (the oldest) started high school.  They basically paid as we went--no way we could do that.

    And speaking of high school, they sent their three children to private, Catholic schools.  Private school is not going to happen here.

    My parents were able to put a rather large addition on their house, and I just don't know that we can afford to do the same.

    And of course, my father along with his brother and father were able to buy a large piece of property in PA, build a house and several lakes, and have a vacation home.  My brothers and I-I laugh at the thought.

    So how the hell did this happen?  While I feel good about my life, I don't think we're as well off as my parents.  Of course, there were times according to my mom where she didn't know how she was going to buy groceries.  So maybe I have unrealistic memories of how "easy" my parents had it when I was a child.  Hmmmm.

    by tessajp on Fri May 16, 2008 at 05:33:40 PM PDT

  • Home Prices. (0 / 0)

    I read an editorial a couple of weeks ago - I think it was in the Washington Post, but I can't be sure - which had an interesting analysis which suggested that home prices are one of the reasons for this. It was done in terms of supply and demand - as women entered the workforce, there was more money, and what did people want to spend that money one? The most important thing in their lives, their children, which meant getting them into the best schools, which meant moving house. And so all that money got sucked into house prices, because everyone was using their extra income to buy houses close to the good schools, and all houses went up because of it. And so the extra money never really turned into extra money in your pocket. It was a rather depressing analysis, because in a lot of ways, there's no good way to deal with it, because people will always want to move closer to the good schools and be in the good neighborhoods.
    Dealing with healthcare would help, and you could maybe mitigate the effect a bit by improving schools across the board, but where houses are sold to the highest bidder, I'm not sure how much you can do.

    FWIW, we're pretty comfortable, but know that if we had kids, we wouldn't be. Part of that's being in the sort of house we can live in for the rest of our lives, and as in real terms the payments for it will drop over the years, that won't be the case forever, but still. I understand why so many people feel squeezed, because our income is way, way above average.

    "You're never more alone than when you're alone in a crowd."

    by Expat Briton on Sat May 17, 2008 at 07:45:25 PM PDT

    • incomes (0 / 0)

      As women entered the workforce, there was more money, and what did people want to spend that money one? The most important thing in their lives, their children, which meant getting them into the best schools, which meant moving house. And so all that money got sucked into house prices, because everyone was using their extra income to buy houses close to the good schools, and all houses went up because of it.

      That's one of the premises of Elizabeth Warren's The Two-Income Trap.  It makes sense when you think about it, although there is no solution to it.  It does put single income families at a huge disadvantage in the housing market though.

      by NJmom on Mon May 19, 2008 at 12:38:33 PM PDT

      [ Parent ]

  • A snapshot (0 / 0)

    My parents at 28: building their first home, from scratch, on one blue-collar job (neither had a college education), two cars bought new, and three children.  Me & DH at 38: just bought our first house, only possible because my in-laws sold it to us, two cars, only one bought new (and it was the first new one either of us had ever had), both working, three college degrees between us, one small child that we'd waited to have because we couldn't afford one any sooner.  And we are all, and always have been, in the Midwest, which is supposedly the most reasonable-cost areas of the country.

    Sure, we made many different choices than our parents, the education being probably the most obvious.  But that was because by the time we became adults, it was virtually impossible to imagine having a house, car, & family on one blue-collar income.  Many of the opportunities our parents had are mostly closed to us.

    What I found interesting about this book/interview is how guilty people feel because this is something we can't talk about.  And how people believe it's their own fault that they haven't succeeded (I know that's how I feel) because we are taught as Americans that everything is our responsibility.  Yet forces beyond our control have contributed to this, and I wish we were all brave enough to stand up and say, "This is not all our fault, and we need to have changes to help."  Or at least I wish I was that brave.

    by cynmill on Mon May 19, 2008 at 07:49:54 AM PDT

  • Hmmm (0 / 0)

    Personally, I am much better off than my parents were.  I had a chance to go to college and grad school, my parents didn't.  What an amazing opportunity.  

    I don't have to work, my mom did.

    We have money for little extras.  My parents didn't.

    I believe that my kids will be even better off than I was, in so many ways.

    by NJmom on Mon May 19, 2008 at 12:32:08 PM PDT

Permalink | 9 comments