Slipping away from middle class

[trof]

It doesn't take a catastrophic event to begin to lose your financial foothold.
Sometimes it can start with something as seemingly small as losing your celphone.

I met Andy last year, when he did some home remodeling for us. Handy Andy Construction.
Of the three contractors I could get to actually come out to our house and see what I wanted done, Andy was the only one to return later with neatly written estimates. The other two never came back, so I told Andy he got the job by default.

Besides the fact that he did what he said he would, I liked Andy from the start. He's a large black man, nearing 60, with a friendly smile and a firm handshake. Over the weeks he worked here, we became friends. When the job was finished we had a little celebration party with Andy and his two-man crew.

Last week Andy left a message on my answering machine. He had applied for a night job at WalMart and could he use me as a reference? That didn't sound good. I called him and said sure he could. I'd tell them the standard "walks on water, leaps tall building with a single bound, etc.". He laughed. I asked him if everything was alright. Why the night job?

"It's a long story."
"OK, why don't you and Vera come by for a drink this evening and we'll talk about it."

Here's what's happened to him and his family in the months since I last saw him.
He had a dispute with his celphone company over a bill. They cut his phone off. He depends heavily on it for his business, so he hasn't had much business lately. I'm in the process of trying to get this straightened out.
His wife, Vera, has worked her way up through the ranks at a local electronics assembly plant over the last 8 or 9 years. She has medical insurance benefits that the family depended on. Most of the jobs there have now been shipped out to China, and the plant will probably close by the end of the year.
Their daughter is in the air force and was sent out to Iraq a couple of months ago and now they're caring for her one year old daughter. Andy and Vera are terrified for their daughter.

I won't blame the administration for the celphone problem, but that was just the first step down a slope made slippery by them.
A once solidly middle class family will probably be eligible for food stamps soon.
And this just isn't right.

[Skittles]

1. I'm smart and I have worked hard all my life

but I have real fears for the future - the jobs simply are not there.

[trof]

2. I believe it's easier than many of us think.

[tnlefty]

3. Yep, and I don't think a lot people fully understand that even with health

insurance an extended illness can wreak havoc on a family and so they don't understand how devastating it is when people don't have insurance.

[Deja Q]

4. I know utterly how you feel.

IT jobs are not there. Not for the qualifications for the job they want done.

Retail is far worse and one has to pass a bunch of computer profile tests to even get in...

It is scary.

[Nikia]

5. Half the town slipped from middle class in my hometown

This has happened over a time period. Long story short, several major high paying employers have closed or severely cut back their workforce over the past 20 years. There have been a few new factories that have opened up in the area though. These factories were attracted to the area because there was a large skilled workforce who was out of work and willing to work for low wages.

[JitterbugPerfume]

6. Poor Andy and Vera

sigh

[mbee]

7. I have no idea if your friends would want to do this or not, but wasn't

Move-On looking for stories from real people. This I feel would be a good story to get out there. Also, the Kerry campaign may be interested and could help these people the way Al Gore helped a family who lost their health care for their sick child.

[Waverley_Hills_Hiker]

8. oh well.

life is tough.

You know, it wont make a dimes worth of difference whos in the White House on this issue.

I know Edwards has pushed this "Two Americas" thing and so forth, but in reality I dont see any change from this decline in the middle class.

Thats just the way the global economy is working, and neither the Democrats nor the Republicans will do much about this.

[wildeyed]

24. There may be global economic trends

but I think the idea is to slow these trends down, give americans a chance to adapt.

Kerry has a plan- The Most Sweeping International Tax Reform in Over Four Decades in Order to Encourage Companies to Create Jobs in America and Stop Shifting Jobs Overseas for Tax Reasons more at http://www.johnkerry.com/issues/economy/index.html

Also, the Dems will offer affected workers a softer landing, maybe get some traction on universal healthcare, raising the minimum wage and other issues that will help working families. There are so many people out there trying trying trying to make it. I hate the republican attitude that poor people deserve to be poor. I don't like freeloaders anymore than the next person, but many folks who are poor just had bad luck and need a hand up. And these days I am feeling that I could be next in line for help.

[Hubert Flottz]

9. Bullshit!

How could that happen, under Bush's loving, compassionate watch, to a "Small Buisness Owner", who like other small businmess owners has created 75% of Bush's "NEW JOBS"? Perhaps he should have Trusted Bush more better!

Bush protects small business owners like Halliburton!

[midwayer]

11. It is easy

Here is one for you.....

I am a small contracter married for 23 years and raised two boys, now 17 & 22. It has been a long tough haul, both, my wife and I starting out back in the early 80's both making $8 per hour always renting, over the years struggling to keep the bills paid and our credit going to hell.

Over the last several years, boys growing up, my wife has finally moved up in her career, and I work as a sole proprietor doing carpentry work in a rather well to do community.

We just bought our first house just within the last year.

My business cycles and quite often I have downtime between projects. Just recently I hit a down cycle and it started sucking cash flow, a good portion of the kitty I had built up. Spending alot of time pricing projects which never landed, for one reason or another, mostly because the high end market spigot began to be shut off. At the same time maybe taking a few small projects which my pricing power was neal just in order to have some cash flow. This is where it started.

Then, 2 things all at once.

My truck broke down because of a FORD defective gasket which cost me 1 week and $2000.

Then:

Keep in mind my son works hospitality and gets off work late and hangs with his freinds for a bit. He is a good responsible boy.

My youngest son was out past curfew in his car coming home on a three lane highway, passed two officers who had someone pulled over in the 3rd lane over. One of the officers jumped in his car and chased my son down. The law is two slow down 20-30 miles under the speed limit when passing emergency vehicles. Three officers ended up showing up, they were looking for drugs and could not find any. They then proceed to verbally AND physically abuse and intimidate him. They then trumped up the charges severely and took him to jail. You would not believe the police report, what they said. They railroaded him.

We hired a lawyer $4,000 to get him out of this. The judge non-adjudicated him as they believed him and I hear they have had trouble with this set of officers before, many complaints. But there will be nothing done about this as they provide revenue to line the local coffers.

$6000 and a down business cycle has put us in deep financial trouble right here.

That's all it took

Fortunately there is light at the end of the tunnel, I'm landing some nice projects now, I hope, but it could very easily be too little too late. 45 days late on the mortgage, car payments, and much more.

Pulling myself up by my bootstraps everyday

[dumpster_baby]

12. ah, yes, the small business owner as a demigod of the American economy"

What a reality-bender that is....

What really irritates me is how the fucking politicians act like there would be few jobs if it weren't for small businesses. True, they do hire most people. But that doesn't mean that they create the economy.

Consumer demand creates the economy! If I am hungry and want to buy a sandwich at work, I will pay for a sandwich whether I buy it from a minimum wage fast food worker, or if I buy it from a sole proprietorship street stand. And the sole proprietor would make a lot more at his/her own small sole proprietorship than he/she was making at the minimum wage job working for the small business owner.

What happens is that those who have money are able to manipulate the local municipal laws and codes so that one must have a lot of money to operate a small business. They outlaw or restrict small street stands, which means the poor kids have to go work for someone with more money.

Personally, if I were king of the country, I would outlaw most small businesses, AND most aggregations of capital in the business world, except where more capital is needed, such as manufacturing, electronics, medicine, drugs, larger scale construction, etc.

[midwayer]

18. I live in Jeb Bush's State

Lovely huh?

Actually they just outlawed Sole Proprieterships for business who do onsite work. You now have to register with the state as, at least a Limited Liabilty Company. God forbid you have to get your WC through a payroll service or ytou just added a 42% payrolling overhead to you business (about 25% of that is WC itself.) Makes it extremely difficult to compete as an unapprecaited lowly master carpenter.

Fortunately as a LLC I am allowed to work exempt from WC and can take on two partners exempt as well, as long as I give away 10% ownership of my business.

I like my fingers and would like to keep them. God forbid any one of us gets hurt but that is part of the risk we take in order to be competitive in my industry. And believe me, my pricing power has gone to hell right now.

Lovely huh?

[Robbien]

23. People are voting with the GOP for religious and cultural issues

and voting against their own pocketbook. But now the Democrats are not even fighting the GOP on economic issues. So why should the people vote for the Democrats when they won't get better jobs or wages, why not stay with the GOP where at least they get something they want.

[Hubert Flottz]

10. Damn Trof, I didn't mean to kill your thread!

I feel the same rage you feel over these kinds of things! The big lie the GOPers are always telling about the harder you work the more you will gain is TOTAL BULLSHIT! Your story is a classic example of the TRUTH about hard work! I'll bet you Bush, any Bush, has not EVER done a good honest hard day's work in their lives! I'll bet you that a drop of Bush Sweat from real WORK is so rare, that it would prolly rank right up there with hen's teeth and WMD in Iraq, in scarcity!

[trof]

15. Not to worry, bud.

And what you said in your first reply...I hadn't thought of.
Andy IS one of those small businesses dumbya*s always going on about.
I forgot to mention that the ONLY reason he wants a job at W-M is for the health insurance. They've told him he'll get it. Wonder what it'll cost him?

[AP]

13. One unpaid bill away from disaster.

[MidwestMomma]

14. You are a fine person for caring about another human being like that

Thanks for sharing their story. I hope things get better for Andy and Vera and that their daughter comes home safe from Iraq. :hug:

[trof]

16. Me and you, MM.

Their daughter is a sweet girl and smart as a whip. She had NO prospects here in coastal Alabama, nit unless she wanted to spend the rest of her life changing bedsheets at the beach condos or working at Wall World. The air force was a way out for her. She signed her final papers three weeks before 9/11. Regrets it now.

[Sugarbleus]

17. I'm very distressed to hear these stories...I'm so sorry for those

of you and your friends who are just taking it in the shorts. It's simply outrageous.

Americans have always been the hardest working people. We worked the longest with less time off and fewer if any benefits. Then our country just turns it's back, ships jobs out, withdraws any safty nets for those who fall through cracks the greed monsters have created, and shrug their collective shoulders...'that's life'???????????

I too am pessimistic about whether or not our work environment/economy will change in any appreciable way with a Dem in leadership rather than a Repub...everything is so tied to this stinking global economy bullshit and the "investment" class. It's appalling.

The "American Dream" is only for a few fortunates. The rest is just survival.........that is truely sad.

Just for the record: What is considered the upper income cutoff point for
.."Middle Class"? I thought middle class were those making more than $175,000/200,000 per year. What are the facts?

[midwayer]

19. US Census Income

Should list the figures, I had it the other day and lost the link but maybe you can find it here
http://www.census.gov/main/www/cen2000.html

[Nikia]

35. No one makes more than $175,000 in my area

Well, perhaps a few people, but they are considered wealthy. The average house is worth around $100,000 though with few over $250,000.

[Strelnikov_]

57. Trade Deficit At Record 5% Of GDP And Growing

Note that the steep climb in trade deficit shown on the graph (link below) began in 1997, about when trade with China really got rolling.

I also found it interesting that the trade deficit appears to have accelerated during the economic downturn of 01-02. During previous economic downturns the graph indicates the trade deficit declined (lagging a decline in the dollar), indicating self-regulation of foreign trade as the economy recovered. This change in behavior from past downturns could indicate that a major structural change in the economy has taken place.

http://www.epinet.org/content.cfm/webfeatures_econindicators_tradepict

[midwayer]

20. Minumum wage

I figured the other day that, based on a 4 person family with two working they would need at least 6.75 per hour just to meet their basic needs.

[wildeyed]

26. How did you figure that?

With two little ones, my family could not manage on that. Daycare would be too expensive.

[midwayer]

31. Absolutely

I just averaged monthly car payments average rent, bills, etc.

Good point though I think I forgot about day care, and I know from raising my two it is not cheap.

I should have phrased it bare a.. minimum

If that is still not enough, then I would definitely be in favor of it being even higher.

[wildeyed]

32. I guess it depends on where you live, too.

Cost of living varies widely from place to place. Kerry is in favor of increasing the minimum wage. I read a news story a while back that said to $7 by 2007 and it will be indexed to inflation. Still seems low to me if you are trying to do it and take care of kids.

[midwayer]

34. Heck

We just figured $7 NOW! Not 2007

I don't these these politicians have any sense

of

reality, at all

I should been in the ketchup business

[T4tyra]

21. ONCE THE MIDDLE CLASS

IS GONE SO GOES THE WILL TO VOTE

[porphyrian]

25. And what happens when the people have nothing left to lose? - n/t

[mhr]

62. To Controversial For Some But The Answer Is Social Revolution

I see this freight train coming at 90 mile per hour.

It is the inevitable outcome of the lost hopes and dreams of most Americans paid for at the profit of Republican social policies.

[DeepModem Mom]

22. kick

[trof]

27. Hey, I made the front page.

Thanks to whoever.
:-)

[bobbieinok]

28. in the mid-late 60s the women's movement used to say

'many women are just a divorce away from welfare'--'from being a bag-lady'

if nothing else, it sure made me think about the fragility of what I thought was rock-solid permanent security

[redqueen]

29. I think the corporate power brokers *want* to decimate the middle class

that way there are fewer people with the resources/will to challenge them.

Unions shrinking... wages dropping... all the while profits are soaring.

:mad:

[misanthrope]

30. Two Questions...

One, what relevance does Andy's skin color have on this story?

Two, did you see the piece on the front of yesterday's Editorial section of the Mobile Register discussing how outsourcing is good for American jobs?

[trof]

37. Answer to 2: No.

I take our local bi-weekly and get most of the rest of my news from the internet. Here http://www.al.com/ for Alabama news from most of the state dailies, plus NYT, Christian Science Monitor, etc.
IMHO, the Register ain't much of a newspaper so I quit taking it a year ago.

Answer to question 1 put me into a spate of soul searching. Why, indeed? Hard to come up with a conscious reason. Subconsciously? I dunno. Maybe it's because Andy and Vera are my only black friends? I live in a lily-white neighborhood. Home prices are $250,000 and up (waterfront). There's certainly no prohibition, but so far, no black neighbors either.

Maybe it's because I resent the southern stereotypes talked about even here sometimes and wanted to (subliminally?) say "Hey! Look! I'm a born and bred white southerner and I have black friends". Does that meak me a limousine liberal? Well, I sure don't have a limo.;-)

Maybe because it's still damned difficult for blacks to break out of poverty, and I'm proud of Andy for making it, at least for a while. Andy told me "I just NEVER did like working for somebody." He's had his own businesses since high school. Had a car repair shop, drove his own 18 wheeler and owned two more, had a landscaping business. It's a long list. He sure isn't afraid of hard work.

It has been mentioned in another reply that he may not be the best business manager, and I think that's maybe true. Whatever.

At any rate he's a nice guy who I have developed a deep affection for. And when he and Vera were here Saturday he said something that really touched me. To her he said "See? I told you. These ain't like any folks you ever met before." I think the "white" part of "folks" was a given.

I'm not sure if I've explained why I identified Andy as a black man to your satisfaction, or my own, but this is the best I can do. Hope I didn't offend. :shrug:

[misanthrope]

41. In all honesty...

...I wasn't really looking for any answer to satiate my curiosity about the inclusion of Andy's color (although your answers were really good and thoughtful), but was asking more rhetorically, just to get all of us to contemplate it.

That's an idiosyncracy I noticed long ago in a lot of people of all stripes (myself included).

I'm not as prone to it as I once was.

And, yes, the Register is a travesty and one of the reasons Mobile has existed in the dark ages for the last three hundred years.

[trof]

43. It was a good question

because it made me think.
Thanks.
You in Mobile?

[misanthrope]

52. Am I "in Mobile"?...

LOL! Yeah, in case you don't remember all the brou-haha last month about losing my job because of my presence here.

[trof]

63. Was out of town for a couple of weeks.

Must have missed it?

[trof]

39. Oh yeah...

He's also something of a mover and shaker in his neighborhood, church, and circle of friends and he's going to help me with voter registration.
Andy is just a good man.

[MUSTANG_2004]

33. Maybe other problems?

Home remodeling is a hot business right now. That he's having problems leads me to suspect that there's more going on than a disputed cell phone bill (one problem account shouldn't bring a business to its knees). A lot of business owners are excellent at their work but aren't very good with the financial/legal side of things and can get buried under it.

[midwayer]

36. Harvard article on the middle class

http://www.news.harvard.edu/gazette/2003/10.30/19-bankruptcy.html

and

The US Census Bureau Poverty Thresholds for 2003

http://www.census.gov/hhes/poverty/threshld/thresh03.html

According to this a family of four including two children

is on the threshold of poverty when making $18,660

[trof]

38. Thanks for the article.

Grim.

[midwayer]

40. Family of four

Me thinks the Gov. needs to get a grip on reality

With two parents working and two children in day care or school, mortgage or rent, car payments, utilities, other necessities and live comfortably. Cell phones are becoming an almost necessity nowadays

Rough numbers Figuring the expenditures averaged the best I can, in some cases could be considered conservative:

Rent or Mortgage $850 - $1000
Vehicle Payments $500 - $650
Utilities $280
Groceries & Food $500
Cell phones 2@ $110 minimum plans
Daycare $1,400 Holy Comoly! It's been a while

Total $3,640 - $3,940 Cash Outflow

$3,640 x 12 months = $43,680

[midwayer]

42. So

Two parents working, hopefully, 320 hours per month at $7.00 per = $2240 * 12 months = $26,880

Is going to have a tough time

OTOH you take out $1400 * 12 = $16,800 worth of daycare, that's $43,680(see last post) - $16,800 =
$26,880 expenditures for a family of two spousal arrangement = the $7 hourly rate

[trof]

44. Read "Nickled and Dimed".

A single person cannot enjoyed private housing and transportation and make it on the minimum wage.

on edit: I'm talking a studio apartment or even a ROOM in a rooming house and an '88 Yugo.

[JanMichael]

45. "Housing Wage" is a good start.

You can find the info here.

If I recall corectly Trof is in NC so the Housing age for the state is $11.60 (After withholding).

"The Housing Wage in North Carolina is $11.60. This is the amount a full time (40 hours per week) worker must earn per hour in order to afford a two-bedroom unit at the area's Fair Market rent. This is 225% of the minimum wage ($5.15 per hour). Between 2002 and 2003 the two bedroom housing wage increased by 0.27%."

For two low wage workers it's "doable", for a family of 4 (two kids) it is dangerous, for a single parent it's disasterous.

[trof]

48. Alabama

But prople tend to confuse us.
;-)

[JanMichael]

50. I'm a member of the "Florida Head Injury Society", 1988.

:silly:

[Robbien]

46. And a biggie is left off that list. Health Care.

One big illness and the family starts to slip off the edge.

[trof]

47. Be no healthcare.

That wasn't even a consideration in the author's "givens".

[midwayer]

53. Taxes and Healthcare

Yes, I did leave it out ...a big issue

Out of the $7 per hour both taxes and health ins are not even taken into consideration. Sad but true...ad it to the list of expenditures

I think our Government is waaaay behind the curve when figuring their poverty statistics.

You know they use these statistics for setting values precedence in other programs I'm sure as well. Cynically, They just aren't living in the real world or they are and it is their means to oppress.

Oh Well.. as the Repugs say ..."That's the way it's always been and YOU can't change it"

[ScreamingMeemie]

49. But it can't happen to us right?

I am so sorry to read these stories. And then run into people who think that this is somehow the Andys of the worlds' fault. It could happen to anybody. I drive through Grosse Pointe everyday and the number of desperation sales on the market is sickening. :(

[trof]

51. "One paycheck away from disaster."

That's me.
The bulk of my monthly income is from S/S and a small pension.
My company went bankrupt 3 years ago, and now my pension is paid by the gov, Pension Benefit Guarantee Corporation (PBGC).
The PBGC is deeply in the red now.
And * cuts taxes so there's less coming in.
I'm about one step ahead of Andy.
Great.

[yupthasme2]

54. Andy's plight

I have been reading the DU boards here for the last few months to get a feel for things around here, but after reading this tale I have to post something:

I find it stunning that Andy would allow his business to be ruined by a dispute over a cell phone bill.
There is something missing from this story, cell phones cost next to nothing these days and your number can be transfered.
Maybe I am missing something.
I hope the best for his daughter, may she return home safely.

[midwayer]

55. If he is a Handyman Carpenter Type

It is hard to stay busy sometimes as it is and you get into a trap called "spending waaaay too much time chasing too little money"

The standard in the industry is if you get 3 out of 10 jobs you bid your doing good. Otherwise, word of mouth, "just do it" quicky jobs can be enough to sustain. But one or two extended downcycles can hurt.

Plumbers can do it because there is ALWAYS a broken toilet to fix.

It's a little different sometimes between businesses that aren't as much service call based on demand and the ones that are more or less project oriented. Project oriented can be difficult to keep the momentum going. It's all about momentum.

Just a thought

One thing I'm having to do in my business since my niche high end custom market spigot has been trickling, is I had to get out and do a little quick marketing which entails taking on lower cost production projects just to keep the lights on and at the same time keep spending a little time on landing and producing some of the better priced higher end stuff. Sometimes a little marketing can come back to you in a big way over time.

just some thoughts

[midwayer]

58. If Andy is 60

his body is not what it used to be. I've know carpenters in their 60's who have been carpenters all their lives and are tired and beat up. They turn into grumps due the fact they have, lived a difficult demanding life on little pay attempting to achieve the American Dream. They are beat up.

Carpentry requires constant movement and total focus all day long in order to produce. I'm 45 and by the end of the day my body and my brain hurts, especially in the heat sometimes about 5-6 hours is about all you can take.

Painters make better money. They have better pricing power and do not have near the maticulous thought issues in order to produce.

You can run / find 5 immigrant painters, suppressing their wages much easier then you can find 5 immigrant carpenters who are good enough to produce and make you money (not that they aren't out there but more prevelant and easier to find painters.)

Liscencing & Workers Comp in some states can be an issue as well, can add to problems with profit margins greatly. Many coontractors out there working guys without WC which can be a liability not only to the contractor but the homeowner as well. Many don't think about that and the consequences until someone gets hurt.

Just some thoughts

[midwayer]

59. Carpentry underappreciated

Carpentry, I feel is one of the most demanding, highest risk and under paid occupations out there. This is the place where the big boys make thier money, off of the carpenters. I play with the big boys all the time and for some of them, their whole game is to beat you down on the numbers, never mind them understanding you and your business. Not all are this way but it's normally the contractors who think they are contractors and doing business on daddy's money with not that much experience in the industry. They know just enough to be dangerous.

People appreciate quality work but don't like to pay or realize what it takes in order to actually produce that quality. It's my constant dilemma and battle in convincing. Its hard to put your name on production lower quality work when you are used to customers who understand and are willing to pay a little more for that quality, something you can be proud of.

[midwayer]

60. The bottom line is

For a carpenter who is basically, licensed and working on his own or with a partner, the business itself will normally make no money on an annualized basis. I'm not saying it can't, but very difficult to do. You only make a paycheck. The key is momentum and pricing power in order to make a decent paycheck and or profit. Right now, in this economy and influx of immigrants, pricing power is stagnate sputtering.

[midwayer]

56. Middle Class Feels Squeeze

According to the U.S. Census, yearly median family income is $51,407. In terms of income distribution, the largest group of American families -- nearly 21 percent -- earn between $50,000 and $75,000 a year. Nearly 16 percent of American families live off incomes between $35,000 and $50,000 annually. That paints a picture of a substantial midsection -- nearly 37 percent of families -- with incomes between $35,000 and $75,000 a year.

http://www.rense.com/general54/ddwi.htm

[mhr]

61. Tangible Graph On The Loss Of Jobs

The graph below shows how Texas cities have faired under Bush. It is from the Dallas Federal Reserve.

Note how Dallas, TX has not recovered to the levels of employment last seen in January, 2000.

Jobs here are slim pickings and many people have been unemployed for a long time. For me, 4 years. Middle class, what's that?