Celine-Marie Pascale - Living on the Edge

0.1% earned $2,757,000

1% earned $718,766

5% earned $299,810

10% earned $118,400

These two sets of numbers on national income illustrate that the US middle class has virtually disappeared – unless you change the definition of middle class. The potential for class mobility decreases as the income gap expands. Importantly, our politicians have helped to ensure that the burdens of high tax rates are felt most acutely by the 76% of people earning less than $60,000 a year. 44

Despite the glaring inequality and the profound economic struggles of fully employed workers, people in the US tend to believe that we have the best economic system on earth – even if it isn’t working so well for them or for the people they know. It’s a little like my family being convinced we were middle class, even though we had trouble keeping food on the table. We have a federal poverty line that is far too low to capture the reality of poverty and the lives of millions of people who might not be willing to call themselves poor, even though they have trouble providing for their most basic needs. And that suits the wealthiest people just fine.

The United States has a long tradition of trying to ignore or erase class differences. The stories we tell ourselves as families and as a nation about the “haves and have nots” shape the opportunities and the struggles of millions of people. Living on the Edge will bring class inequality into focus as we listen to people talk about their lives in ways that challenge existing measures of well-being. I have learned a lot from the people who generously shared their time and experiences with me. I believe readers will as well.

1 1 TEMIN, P. 2017. The Vanishing Middle Class: Prejudice and Power in a Dual Economy, Cambridge, MA, The MIT Press.

2 2 This program is now called the Supplemental Nutrition Assistance Program (SNAP). Benefits are received in the form of debit cards rather than as coupon books.

3 3 TEMIN, P. 2017. The Vanishing Middle Class: Prejudice and Power in a Dual Economy, Cambridge, MA, The MIT Press.

4 4 TICKAMYER, A. R. & WORNELL, E. 2017. How to Explain Poverty? In: TICKAMYER, A. R., SHERMAN, J. & WARLICK, J. (eds.) Rural Poverty in the United States, New York, Columbia University Press.

5 5 NATIONAL CONFERENCE OF STATE LEGISLATURES. 2019. National Employment Monthly Update. At http://www.ncsl.org/research/labor-and-employment/national-employment-monthly-update.aspx.

6 6 FOTTRELL, Q. 2018. 50 Million American Households Can’t Even Afford Basic Living Expenses. Market Watch, June 9. Also, according to research by PayScale, 46% of workers identified themselves as underemployed before the pandemic. The Atlantic (August 2020) reported that before the pandemic, one in ten workers wanted more hours than they had and 42% of recent college graduates held jobs that did not require a college degree.

7 7 AMADEO, K. 2019. Unemployment Rate, Effect, and Trends. At https://www.thebalance.com/unemployment-rate-3305744.

8 8 ALSTON, P. 2018. Report of the Special Rapporteur on Extreme Poverty and Human Rights on His Mission to the United States of America. At https://digitallibrary.un.org/record/1629536?ln=en.

9 9 ALEXANDER, S. 2019. Walton Family Fortune Increases $3.3 Billion on Walmart Earnings. Bloomberg. At https://www.bloomberg.com/news/articles/2019–02–19/walton-family-fortune-increases-3–3-billion-on-walmart-earnings; KESSLER, G. 2019. Does the Walton Family Earn More in a Minute Than Walmart Workers Do in a Year? The Washington Post, Feb 19.

10 10 METCALF, T., et al. 2019. The World’s Wealthiest Family Gets $4 Million Richer Every Hour. Bloomberg. At https://www.bloombergquint.com/labs/richest-families-in-the-world.

11 11 O’CONNOR, C. 2014. Report: Walmart Workers Cost Taxpayers $6.2 Billion in Public Assistance. Forbes, April 15.

12 12 FITZ, N. 2015. Economic Inequality: It’s Far Worse Than You Think. Scientific American, March 31. At https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think.

13 13 WATKINS, S. 2018. Kroger Ranks Among Top Employers of Workers on Food Stamps. Cincinnati Business Courier, Sept 12.

14 14 REICH, R. B. 2020. The System: Who Rigged it, How We Fix It, New York, Alfred Knopf, p. 35.

15 15 Ibid., p. 113.

16 16 PLATOFF, E. 2018. How Might Texas Win Amazon’s Second Headquarters? Not Because of Flashy Financial Incentives. The Texas Tribune, Jan 25.

17 17 EVANS, W. 2019. Ruthless Quotas at Amazon are Maiming Employees. The Atlantic, Nov 25.

18 18 Ibid.

19 19 FOTTRELL, Q. 2018. 50 Million American Households Can’t Even Afford Basic Living Expenses. Market Watch, June 9. Importantly, the Census Data tracks household income, which by their definition includes the sum income of all people fifteen years or older living in a household. So, some of these median household incomes may be based on a single wage earner while others represent the combined contribution of multiple people. There is also no distinction for the numbers of jobs a wage earner holds.

20 20 According to HUD, in the 1940s, the maximum affordable rent for federally subsidized housing was set at 20% of income, which rose to 25% in 1969 and 30% in 1981.

21 21 LEE, C. & RANDALL, C. 2018. Surviving the Waiting Game for Housing Aid. At https://www.citylab.com/equity/2018/03/how-section-8-vouchers-work-in-st-louis/554927.

22 22 FMR is based on surveys of rentals that include utilities across the US to determine the average rents for each of about two thousand regions. In 2016, to increase their accuracy, HUD finalized a rule that enabled them to calculate FMR based on small geographic areas defined by zip code. Known as Small Area FMR (SAFMR), this new calculation captures changes across neighborhoods within the area. In 2017, HUD suspended mandatory SAFMRs and made it discretionary. This has led to lawsuits and delayed implementation.

23 23 See https://reports.nlihc.org/oor.

24 24 THRUSH, G. 2018. As Affordable Housing Crisis Grows, HUD Sits on the Sidelines. The New York Times, Sept 19.

25 25 California, New York, New Jersey, Maryland and the District of Columbia.

26 26 See https://www.nlc.org/article/2019/05/09/does-your-city-have-access-to-inclusionary-housing.

27 27 CALLIES, D. 2020. Mandatory Set-Asides as Land Development Conditions. The Urban Lawyer, 42/43, 307–29.

28 28 Ibid.

29 29 METCALF, G. 2018. Sand Castles Before the Tide? Affordable Housing in Expensive Cities. American Economic Association, 32, 59–80.

30 30 By contrast, Western European countries have a mix of publicly and privately owned housing. The publicly owned, known as social housing, is cost regulated to meet the needs of both working-class and middle-class families.

31 31 DUTTA-GUPTA, I. 2020. Measuring Poverty: Why It Matters, & What Should & Should Not Be Done About It. Economic Security and Opportunity Initiative. Center on Poverty and Inequality: Georgetown Law. At https://www.georgetownpoverty.org/issues/measuring-poverty-why-it-matters-what-should-should-not-be-done-about-it.

32 32 ALSTON, P. 2018. Report of the Special Rapporteur on Extreme Poverty and Human Rights on His Mission to the United States of America. United Nations. At https://digitallibrary.un.org/record/1629536?ln=en.

33 33 See https://aspe.hhs.gov/history-poverty-thresholds.

34 34 DUTTA-GUPTA, I. 2020. Measuring Poverty: Why It Matters, & What Should & Should Not Be Done About It. Economic Security and Opportunity Initiative. Center on Poverty and Inequality: Georgetown Law.

35 35 The calculations for childcare are drawn from Parents and the High Cost of Child Care, a publication of Child Care Aware of America (CCAoA). Calculations for transportation are based on data provided by the Center for Neighborhood Technology (CNT) and derived from CNT’s Housing and Transportation Affordability Index. Health care is calculated based on the Affordable Care Act (ACA) health insurance exchange premiums and out-of-pocket expenditures. Premiums are obtained through the Henry J. Kaiser Family Foundation’s 2017 Health Insurance Marketplace Calculator and supplemented with data from the US Department of Health and Human Services. The EPI calculation of “other necessities” is derived from Bureau of Labor Statistics (BLS) Consumer Expenditure Survey (CEX) data. It includes apparel, personal care, household supplies (including furnishings and equipment, household operations, housekeeping supplies, and telephone services), reading materials, and school supplies. For tax estimates, EPI uses the National Bureau of Economic Research’s TAXSIM, a microsimulation model of the US federal and state income tax systems, which uses twenty-two variables. For more information, go to the EPI website at https://www.epi.org/publication/family-budget-calculator-documentation.