PBS Frontline: The Middle Class and the New American Economy

[Katsmeow]

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.

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]

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=ima...YIbO-4AOwq4GwCQ&ved=0CDUQsAQ&biw=1920&bih=957

 

[nvestysly]

You mean like these poor choices?

https://www.google.com/search?q=ima...YIbO-4AOwq4GwCQ&ved=0CDUQsAQ&biw=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]

You mean like these poor choices?

https://www.google.com/search?q=ima...YIbO-4AOwq4GwCQ&ved=0CDUQsAQ&biw=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]

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]

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.

 

[travelover]

Everyone with less money than me was just too lazy to work hard like I did. Everyone with more money than me probably stole it or inherited it.

 

[youbet]

Perhaps, but there is a big difference between farming in the Dust Bowl and living in Milwaukee

Of course there are differences. But the Burns documentary helped me put the Moyer documentary in perspective.

I don't deny that the Stanleys and Neumanns have shown some employment flexibility. But if their vision in life is reaching and maintaining middle class by holding unskilled or semi-skilled blue collar jobs, they are likely going to need to be open to a move. Geographic flexibility would hardly guarantee doing better, but I don't think it could hurt.

 

[MichaelB]

Everyone with less money than me was just too lazy to work hard like I did. Everyone with more money than me probably stole it or inherited it.

'cept me.

 

[brett]

I too found the show very revealing-and well done.

I think that there are many more Neumans and Stanleys-more than we would like to acknowledge. There has been a definite decrease in the middle class and the chasm is growing deeper. For some, the American dream is not within reach.

Unfortunately the income and credit statistics over the past ten years are revealing a trend that some people do not want to acknowledge because it detracts from our view of the 'American' way of life.

Our economy has been in flux for a number of years. It has been changing for the past 15 years. Unfortunately, IMHO, we have been stuck in react mode instead of being proactive. And we will be paying the price for this in the years to come.

 

[johnrlawjr]

I found it sad, and it left with a feeling of personal gratitude for my career and the benefits that it provided. I was lucky -- no doubt about it. Just hard work is not always the answer -- all these people appeared to be hard workers.

Also, no family in the U.S. should be one medical emergency from foreclosure or bankruptcy. My humble opinion.

 

[ERD50]

Perhaps, but there is a big difference between farming in the Dust Bowl and living in Milwaukee, ...

Of course there is a difference. But I'd bet big money that those people in the dust bowl would have JUMPED at the chance to trade places. Do you doubt that?

-ERD50

 

[tmm99]

First of all, I would like to thank the OP to start this thread - I probably would have missed this particular episode.

I watched the show yesterday and it made me very sad, especially for the Neumann's family. I personbally know people like them - who have no education/wits but are willing to work many hours day and night to get the food on the table. I didn't feel so bad for the other family (Stanley). They had their first son graduating from high school which evidently was the first person ever to graduate from high school within their families and relatives. Going out of state for college probably wasn't a good move, but I can see their pride and joy of one of their children finishing a 4 year college. Though not much money, the family was cohesive and they still had a lot of vigor for life. The Neumann's father on the other hand looked defeated and quite depressed (who wouldn't with so little sleep?) They did everything they could think of doing, but the odds were stacked agaist them. Maybe in the old days, what people had to do was get a job and work hard and got taken care of somehow? I don't know.

After the show, I wondered how things could have been different for them - as you all have been discussing here. Yes, a move might have been a good idea. There are only certain jobs available for people with no education/wits - manufacturing, mining, construction, etc. They are there, but you need some luck with these too. (I know a family who got out of a similar situation only because they had a relative living in a town where there were many jobs available for unskilled workers and the husband moved in with his relative to find a job (which he did) while his family stayed behind.)

Here is what I think. In this country (and probably many others), people of similar socio/educational/economic background mingle with each other but not much cross over happens. If there were more cross over socializations/interactions, maybe Neumanns' families have been exposed to more ideas?? I know a teacher who moved from a big city in CA to a very small town out of state in a rural area and taught high school. She was very surprised to find that the seniors (girls) aspiration was to find a husband, or become a professional like a hair dresser. She had nothing against them wanting to become a hair dresser or find a husband, but her point was they were not exposed to much more around them so that's all they could hope for. (most didn't consider college or think more than a couple of years ahead of them), Of course, there are exceptions, but they are well, exceptions. The neumann's family seems like that - not much aspiration beyond the small town they lived in.

I was married to someone who had no education, and was raised in a town where nobody went to college. (I, on the other hand, was more blessed- college education was a given in my family- We all went to college after high school - I never once thought I had an option not to go.) My ex and I used to interact his buddies from high schools (and their girlfriends/wives), and I could see how everyone seemed to look only a few months ahead of themselves. Some tried to break out (using friends/connections to get ahead in a town with more job opportunities by asking to move in with them for a while, etc, but they had to rely on friends/connections to make things happen for them since they had no reserves of their own) and even that often didn't pan out for something better (taking too long to get a well paid job, etc)- going gets tough pretty fast for these people. For the ones I've interacted with, they didn't seem to have a long term plan or a long term goal in mind. They focus on day to day putting the food on the table and have some money left over for recreation. There was one family with education living on the same block (Parents were both high school teachers) and they mentored the neigborhood kids (then young adults) to some extent, but nobody seems to know anythning about finance for example. Having financial saavy people in their social network probably would have helped these friends of my ex-husband tremendously, as well as the Neumann's and Stanley's.

 

[5971]

I thought the documentary was well done. I Also found the story quite sad. When Keith was talking about papa Stanley and his work ethic it made me think of my dad. He helped me with some repairs around my house a year ago and was running circles around me at the age of 68.

 

[omni550]

Perhaps some of you have already seen this, but I stumbled across this 2 month follow-up story on how both families are doing and why they chose to participate in the PBS show:

What?s Happened to the Two American Families? | Two American Families | FRONTLINE | PBS

omni

 

[Major Tom]

With all the discussion this show has generated, I watched it a couple of days ago to see what all the fuss was about. I'm glad that I watched it on the computer while doing other work, as I don't think it alone would have held my attention for the duration. While I don't doubt the authenticity of these 2 families' experiences, a sample size of 2 isn't enough to draw any meaningful conclusions (not that it was the intent of the producers to do that).

Rather than watch 2 families struggle and falter, an experience I didn't find entertaining or even informative, it would have been much more engaging to have watched a critical analysis that looked at the economy from a broader viewpoint and asked questions such as -


-Is the middle class permanently eroding, or are we in the midst of a cycle of creative destruction that will result in a new middle class?

-If this is a possibility, where will the new jobs be, and what skill-sets will they require? (I don't think I heard the tech industries mentioned once).

-Is it possible that we will experience great growth in the future, or do we need to prepare for much more modest growth?

-If there are industries that will experience much growth, to what extent will other industries benefit from this?


I'm far more interested in knowing how we as a society can succeed, than dwelling on how we have failed.

 

[modhatter]

. Having financial saavy people in their social network probably would have helped these friends of my ex-husband tremendously, as well as the Neumann's and Stanley's.

This was my point I was trying to make. So many good and hard working people out there lack the knowledge, or common sense, for a multitude of reasons. Either lacking at birth, or lack of exposure in their surroundings and pier groups. They don't posses the savvy that others have been blessed to have.

How do you think the mortgage companies made such a killing selling these horrible mortgages to people who just could not fully understand what they were getting into. In my family, I am the "Go To" person. Sometimes they don't go to me, but when I learn of a foolish mistake they are about to take, I inject myself, and have to enlighten them into what they are doing, and offer a better alternative. They have always listened, and thanked me in the end for helping them. I can't explain it, but many people just don't understand finance. I am surprised by the lack of knowledge they poses in the things that I have learned over the years.

I have also come to realize over the years, that I am in the minority, and my other relatives (again very good hard working people) are in the majority. Yet, I personally consider myself lacking and wish I knew more. But I am not comparing myself to my family members (or the Dust Bowl era) I am comparing myself to others who have done better than myself.

When you start comparing these two families plight to the Dust Bowl and the "eventual" migration away from their farms. You forget how long it took many of these families to finally move. They stayed and stayed year after year, hoping next year would bring the rains, and they would not have to leave their farm and lose their home. Many to the very end, until the bank took it away from them. Were they so smart? Should they have known better and have been able to for see how long the drought would last, and given up sooner before they lost everything? Do you really fault them for sticking it out in hopes of saving their farm?

I see no difference in the mental capacity of the people who experienced the Dust Bowl era, to the modern day situation shown on the PBS special.
In fact it is identical in mind set to the families back then.

Comparing the level of poverty from the more current days to the level then is really not the issue.

 

[Meadbh]

With all the discussion this show has generated, I watched it a couple of days ago to see what all the fuss was about. I'm glad that I watched it on the computer while doing other work, as I don't think it alone would have held my attention for the duration. While I don't doubt the authenticity of these 2 families' experiences, a sample size of 2 isn't enough to draw any meaningful conclusions (not that it was the intent of the producers to do that).

Rather than watch 2 families struggle and falter, an experience I didn't find entertaining or even informative, it would have been much more engaging to have watched a critical analysis that looked at the economy from a broader viewpoint and asked questions such as -


-Is the middle class permanently eroding, or are we in the midst of a cycle of creative destruction that will result in a new middle class?

-If this is a possibility, where will the new jobs be, and what skill-sets will they require? (I don't think I heard the tech industries mentioned once).

-Is it possible that we will experience great growth in the future, or do we need to prepare for much more modest growth?

-If there are industries that will experience much growth, to what extent will other industries benefit from this?


I'm far more interested in knowing how we as a society can succeed, than dwelling on how we have failed.

Oh Tom, Tom.....this is the way I used to think, as an INTJ like you (I assume). Those are very important avenues to explore. But the power of stories is evident here. Look how much interest and debate this program has generated here!

 

[ERD50]

Oh Tom, Tom.....this is the way I used to think, as an INTJ like you (I assume). Those are very important avenues to explore. But the power of stories is evident here. Look how much interest and debate this program has generated here!

I also think M-Tom made some excellent points. I especially liked this:

I'm far more interested in knowing how we as a society can succeed, than dwelling on how we have failed.

Of course, we can look at failures as something to learn from, but then you move forward.

And yes, stories are powerful. But IMO, it is much better to use stories to illustrate the facts, to bring them to life, to help us connect in ways that numbers might not.

But I get the impression that this was a presentation of stories, with the implication that facts are being represented. Or at least, with some expectation that the target audience will take it that way. They are kind of making up the facts. Like I said earlier, if one of the families succeeded, would they have been included, or edited out?

It's just like when the news reporters stick a camera in front of somebody on the street when they are looking for reactions to high gas prices, or whatever the hot-button du jour is. If you give them a 'ho-hum, gas prices have lagged inflation' answer, don't expect to be on the 10:00 news. They are looking for 'I'm a single mother and I can't afford the gas to get to my job anymore! My children will starve, and these fat cat oil execs are getting rich!'.

-ERD50

 

[Ready]

The documentary was intended to allow us to look at the very personal lives of two struggling families. That was its intended purpose. A documentary can't be everything for everyone. I'm sure there are plenty of other opportunities to look at a more global view of the country's economy and our future for the middle class. That was simply not the intent of this piece.

For me, learning about the lives of other people who I otherwise would never get to meet was very insightful. I can read about economics any time I wish.

 

[ERD50]

The documentary was intended to allow us to look at the very personal lives of two struggling families. That was its intended purpose. A documentary can't be everything for everyone. I'm sure there are plenty of other opportunities to look at a more global view of the country's economy and our future for the middle class. That was simply not the intent of this piece. ...

That's fine, but then people shouldn't try to read any 'big picture' elements into it. It's just a story of two families, nothing more. We can learn from it, but we can't take a larger view either.

Personally, I think journalism could do better. How about set the stage with some broader facts/figures, and then say 'This week, we will focus on two families that are still struggling, next week, we focus on two families who worked their way up'. It's just too cheap/easy to go one-sided, esp the side that will tug at the heart-strings. It is hard for me to respect that level of 'journalism'.

-ERD50