PBS Frontline: The Middle Class and the New American Economy

[ERD50]

Quote:

Originally Posted by Al in Ohio Those wages certainly didn't help Mrs. Nuemann and she didn't't even get benefits. Honest people shouldn't have to think about alternatives for survival for their family because dishonest employers can't pay a living wage while they dine on caviar and ship champaign in their McMansion.

I guess you & I will just differ on this, but I don't consider it 'dishonest' to make a transparent offer, and have someone accept or decline that offer.

If you feel this way, I hope that you practice it in your own life (you didn't respond to my suggestion to start your own business, so I don't know what you think of that). But I'd suggest you could practice in this way:

1) When you go to buy a product, consider if everyone in the supply chain is getting what you consider 'honest' compensation. If not, offer to pay more than the going rate for the product. That should help. Esp if you deal with small mom&pop places.

2) Don't buy things on sale. It might seem dishonest to you to pay less than what you could.

3) When you need work done, get three quotes and choose the highest one.

4) If you have an in-demand skill, don't ask/expect/accept a higher salary than those less skilled workers. That might be considered 'dishonest' by some.

These businesses are doing the same thing we consumers do. It's not dishonest.

-ERD50

[ERD50]

Quote:

Originally Posted by NW-Bound A spiral death trap, yes. Is there any way out, other than for people to move all out of town, and to bulldoze the entire place, like they start to do in Detroit? PS. If I were a manufacturer, would I not consider making my products there using lower labor costs and ship them to other places in the country. I would not pay them dirt cheap, but I could make my workers happy and grateful, while still paying them less than I would elsewhere. Why doesn't that happen?

It does, but often that place with lower labor costs where they make people happy and grateful is a third-world country.

Many of them would look at lower-class US citizens as McMansion, caviar, champagne consumers.

-ERD50

[NW-Bound]

I was thinking of the comparative advantage of labor cost this area may have over other places in the US, where manufacturing still exists, and the pay is significantly higher. California is an example.

There are obviously many more factors in play, and the labor cost may not be that dominant.

[modhatter]

Quote:

Originally Posted by ERD50 It does, but often that place with lower labor costs where they make people happy and grateful is a third-world country. Many of them would look at lower-class US citizens as McMansion, caviar, champagne consumers. -ERD50

Everything is relative. Especially in the comparison game. The wealthiest on this board is down right poor compared to Bill Gates, or Warren Buffet.

[Throwdownmyaceinthehole]

Sorry, but I just watched this and it really hit home. That could have been me. Had kids young, no college, wrong husband. Broke, unemployed, using credit cards to get by. Had a garage sale to finance my divorce, finished college after 10 years and married the right man who believed in lbym. Without him, I'd be looking for that spot in a trailer park. Those folks in the show worked harder than I ever have. The poor always get hosed. A lot of life is Flip of a coin, luck, chance. My 'good' decisions could also have been my dumbest decisions, who knows where life leads us? Am I any better/smarter/harder working than those folks --I don't think so.

[Mulligan]

Quote:

Originally Posted by Throwdownmyaceinthehole Sorry, but I just watched this and it really hit home. That could have been me. Had kids young, no college, wrong husband. Broke, unemployed, using credit cards to get by. Had a garage sale to finance my divorce, finished college after 10 years and married the right man who believed in lbym. Without him, I'd be looking for that spot in a trailer park. Those folks in the show worked harder than I ever have. The poor always get hosed. A lot of life is Flip of a coin, luck, chance. My 'good' decisions could also have been my dumbest decisions, who knows where life leads us? Am I any better/smarter/harder working than those folks --I don't think so.

If a person gets caught up in the day to day happenings of life you can definitely lose sight of the big picture and get caught in the permanent undertow. I was a first generation college graduate from my family. We lived in an area of many high paying blue collar jobs, while growing up. I saw the early 80s recession and it's impact on people while in high school. That was probably the main reason why I went to college. Of course the economy rebounded and there was a period of time afterwards where the renaissance of high paying jobs came back. I remembered for about the first 10 years out of college that maybe I was an idiot for continuing my education when I could have gotten a better paying job right out of high school. Well that thought certainly didn't carry on for very much longer. So for me looking back it was a very close call between being on the right side of the economic fence and retired before 50, instead of the wrong side and possibly struggling even today.

[SumDay]

Quote:

Originally Posted by Throwdownmyaceinthehole Sorry, but I just watched this and it really hit home. That could have been me. Had kids young, no college, wrong husband. Broke, unemployed, using credit cards to get by. Had a garage sale to finance my divorce, finished college after 10 years and married the right man who believed in lbym. Without him, I'd be looking for that spot in a trailer park. Those folks in the show worked harder than I ever have. The poor always get hosed. A lot of life is Flip of a coin, luck, chance. My 'good' decisions could also have been my dumbest decisions, who knows where life leads us? Am I any better/smarter/harder working than those folks --I don't think so.

Wow, I could have I could have written most of that post myself! My salary is way above what most people with my educational level have attained. Truly, I think most of my success can be attributed to dumb luck. I'm embarrassed to say I've NEVER worked as hard as any of these people profiled do. I honestly don't have the fortitude. I can't help but feel sorry for them.

[pb4uski]

Quote:

Originally Posted by H2ODude ..... like a field assignment 1,000 miles away that moved us with her pregnant and a 1 year old. It kicked my career way up while those who didn't want to do it resented what it did for me....

While I haven't watched the show yet, I suspect that those chronicled would not have accepted a move as it would have been outside their comfort zone and the young child and pregnancy would have been an excuse to turn down the opportunity. And that is part of why they are where they are today.

I wonder if they are reading this thread.

[Al in Ohio]

PBS did not analyze why these families would not move to a new location in hopes of better work ( unless I missed it). I suspect it had something to do with their homes being underwater and not wanting to take a loss. They probably no longer could qualify for a new mortgage where they might move, but they could have rented instead. I think they put too much stock into homeownership being one sense of accomplishment.

[pb4uski]

But isn't homes being underwater in most parts of the country a fairly recent phenomenon (since the great recession)? IIRC prior to that homes in most parts of the country were above water.

[Katsmeow]

Quote:

Originally Posted by pb4uski While I haven't watched the show yet, I suspect that those chronicled would not have accepted a move as it would have been outside their comfort zone and the young child and pregnancy would have been an excuse to turn down the opportunity. And that is part of why they are where they are today.

The show is worth watching, I think.

All we can go by, of course, it was we saw in the show. I wish the show had asked if they had thought about moving.

However, I can hypothesize some possibilities. In both families, you had one person who had a relatively high paying union job who was laid off. They both found replacement jobs but at about 1/3 of the salary. At that time, they both had families.

The Stanleys already had 5 children, the oldest in high school. The Neumann's had 2 or 3 children when the lay off occurred and owned a house. In retrospect, the fact that they should have cut their losses and moved to a different area is evident. But - I'm not sure that someone from that area in the early 90s would have realized that. We know with the benefit of hindsight that those good union jobs with high pay, good benefits were never coming back. But they didn't know that then.

I also wonder how easy it is to pick up and move when you already are in debt, have a family, and have no money. If you stay where you have family and friends you can maybe get help. If you move across the country and don't know anyone then it may not be that easy if you don't already have savings to facilitate the move.

Quote:

Originally Posted by pb4uski But isn't homes being underwater in most parts of the country a fairly recent phenomenon (since the great recession)? IIRC prior to that homes in most parts of the country were above water.

No. Back in the early 90s (when this show started) I had a severely underwater house, worth about 40% less than I had paid for it 7 years earlier....

[BLS53]

There's a good indication that the Neumann's credit was trashed. This makes relocating extra difficult. Landlords, utility companies, banks when opening new checking accounts, all run credit checks. And even if approved for said property/services, it's going to require a sizable cash deposit, which they likely didn't have.

Unless one has a standing offer of gainful employment in the new locale, there's no guarantee life will be any better just because the media declares some region a "boom" area.

Having said that, given the energy and fitness level of Mr. Stanley, I'd head off to the North Dakota oil fields. Mrs. Stanley could likely do well in real estate there too.

[BLS53]

My impression was that the Neumann's got a mortgage in the early 80's, when interest rates were high. Some years later when rates came down, their credit went south and they couldn't refinance. Then they stopped paying, and the interest and late fees accumulated up to the point of foreclosure. I think that's how they got underwater, and the bank came up with that large figure, that they needed to come up with to keep the house. Once you get behind on any loan, the creditor starts piling on the fees. It's kind of a perverse form of compound interest.

[Walt34]

Quote:

Originally Posted by Ready But there was another thing I was thinking about as I watched the show. Over the past 30 years our country has created so much unhealthy, processed convenience food and fast food that catered to people on low incomes, and the weight gain you see in almost all of the family members demonstrates just how bad our food supply has become. Yes, I know you can always say they had their choices and could have eaten healthier food, but I still do blame our country for allowing fast food to so overtake us with little regulation that we have made it so easy to eat really poorly. I'm sure I have a lot of people disagreeing with me, but I continue to think our country must take steps to insist on offering healthier eating choices.

You mean like these poor choices?

https://www.google.com/search?q=imag...w=1920&bih=957

[nvestysly]

Quote:

Originally Posted by Walt34 You mean like these poor choices? https://www.google.com/search?q=imag...w=1920&bih=957

WOW, what are all those strange colors? What are those things? Where do you buy those? Can you really eat that stuff? How do you cook it?

I find it interesting when people say it cost more to buy fresh vegetables and cook them at home. It's a choice. Buy the items that are in season (i.e. low priced) and spend some time cooking. What a concept.

I realize this is a tangent from the OP but the common theme is making choices and using your money wisely.

[ls99]

Quote:

Originally Posted by Walt34 You mean like these poor choices? https://www.google.com/search?q=imag...w=1920&bih=957

Them in supermarkets, the big box stores were an overwhelming experience for a newcomer from behind the iron curtain in the sixties.

You mean no lines for bread, meat, butter. There are other foods too?

And the big clothing stores with all sorts of clothes in more than two colors? And styles! Other than what was in the politbureaus 5 year plan?

Then reality strikes! Yeah for a price it can all be had. Now for my aforemantioned 75 cents per hour income, it did limit the choices. But Salvation Army stores had an astonishing selection of real good stuff. And of course there was Korvettes ( a north east chain store) and Sears for upscale.

Nowadays I am not limited to those choices.

Yes choices have consequences, the country does not owe anyone BVLGARI quality, or the Prada living.

Since coming to the US in 65, I have not found the proverbial money tree to pluck hundred dollar bills off of.

[ERD50]

Quote:

Originally Posted by BLS53 My impression was that the Neumann's got a mortgage in the early 80's, when interest rates were high. Some years later when rates came down, their credit went south and they couldn't refinance. Then they stopped paying, and the interest and late fees accumulated up to the point of foreclosure. I think that's how they got underwater, and the bank came up with that large figure, that they needed to come up with to keep the house. Once you get behind on any loan, the creditor starts piling on the fees. It's kind of a perverse form of compound interest.

I can see how that could form a downward spiral. But it still probably came about by bad choices. I didn't watch, so don't have all the details, but...

DW & I also bought a house in 1981 at a very high interest rate mortgage. But we put > 20% down, we both had good paying, stable jobs, and we saved aggressively to build up our emergency funds. We could have got by on just my job, would have struggled on just DW's. And we also did not have our first child for another 5 years, after our mortgage rate came way, way down (it was an ARM, taken out near the peak, so it fell and fell), several raises and promotions later, and we were much more established.

I also got the impression these people had jobs that were relatively high paying considering the skill level required? I was kinda at the opposite end, being at the early stages of my career, I had every likelihood to expect a rising income. These guys were probably at their peak. That should influence your decisions. Later on in my career, I realized I had mostly 'peaked', unless I was willing to make some big changes. I acted accordingly.

Interesting that some of this took place in Milwaukee. I have some extended family from there, I could provide a Moyer-like story of a few of those families who faced some strikingly similar situations. And I can go back 30 years - low-skill, low education, multiple children at a young age, High School/GED only, then divorce, kids getting in trouble, etc. But the outcome was different, they are all doing pretty OK, maybe not 'great' by some measures, but well established and stable and happy. Does that change anything? Not really, facts/stats would be nice, maybe with a story here and there to illustrate each of the various facts/stats.

-ERD50

[youbet]

After watching the Bill Moyer documentary, I found it useful to review the Ken Burns documentary "The Dust Bowl" which was aired on PBS.

Perhaps the Neumanns and the Stanleys need to sit down and watch Burns' documentary to see and understand what hard times are and how geographic and employment flexibility was necessary for people to survive.

I was particularly interested because my family was involved in Dust Bowl agriculture and migrated to Chicago to work in manufacturing to keep from starving. I've been watching manufacturing and good union jobs diminish in the Chicago area for some time and the extended family's efforts to stay gainfully employed. It even hit close to home. I RE'd (fortunately FIRE'd) because MegaCorp closed the manufacturing facility I was employed at.

It's tough stuff. But frankly, I view the Neumanns and the Stanleys as "soft" and that there is a lot of downside to their situation. They likely need a "significant emotional experience" to permanently change their outlook on geographic and employment flexibility. Being born in a area where, at the time, high paying manufacturing jobs are plentiful and expected doesn't guarantee membership in the middle class permanently. Things change. Economies morph. People must be flexible.

[hausfrau]

Quote:

Originally Posted by youbet After watching the Bill Moyer documentary, I found it useful to review the Ken Burns documentary "The Dust Bowl" which was aired on PBS. Perhaps the Neumanns and the Stanleys need to sit down and watch Burns' documentary to see and understand what hard times are and how geographic and employment flexibility was necessary for people to survive.

Perhaps, but there is a big difference between farming in the Dust Bowl and living in Milwaukee, a metro area of 2M+. Aside from ND, which is a fairly recent phenomenon, are these families really going to find better opportunities without education? They do not have the skills where companies from Texas or Washington or wherever are knocking down their doors offering them jobs. And don't forget, the Stanley father has always had a job, except for that time when he had health problems. His current job pays around $13/hr. The Neumann father had a steady third shift job. If they were not divorced, they very well could have stayed in their house. I'm not judging the divorce, but two salaries maintaining one household is usually preferable.

[Ready]

Their lack of education and sophistication would have limited their success regardless of geography. Remember that even when Milwaukee celebrated an economic recovery, they did not participate in it.

Having three and five kids sank these families. Both of these families were very involved with their church and religion. I've been around a lot of folks like this, and I suspect that if you asked them why they had so many kids, they would tell you it was "God's will". Yet what these folks really could have used was a little less faith and a little more common sense.