According to a Wall Street Journal piece, 'Wealth-Less Effect: Earning Well, Feeling Otherwise' (April 16, p. A11) we are now supposed to shed tears and feel sorry for those making 250 grand or more per year, when millions have to line up for food stamps, or face foreclosure or losing their health coverage.
The basic proposition of the article is that wealth or rather "prosperity", is all relative. To quote:
"To a family earning $50,000, $250,000 a year is well off, but for the family earning $250,000, rising college and medical costs and dropping home values make the perception debatable"
Really? Says who? The family earning only $50,000 a year - which will be roughly $42,500 after taxes, also has to face rising medical costs. Indeed, because they have far less disposable income because they start out with so much less, they have far fewer options. Going to an ivy league college, for instance, is already foreclosed to their offspring unless they can get a full ride scholarship.
Meanwhile, the quarter mil family can garner even more disposable income simply by letting Junior go to a state school instead of Harvard, if s/he doesn't get the scholarship.
So the whole basis for comparison is false.
But then that depends on the definition of "well off", doesn't it? To me "well off" means that a person can, without desperate measures, live off half his income if need be. The changes made to their lifestyle, in other words, don't have to veer into the realm of food stamps, going to thrift shops or visiting food pantries. No $250,000 family need do those, since they can easily live off half their income (meaning half is disposable) if they have to.
Half their income would be $125,000 which after taxes (as currently pegged at marginal rates) is: $79, 375 which is still nearly TWICE the after-tax income of the family earning $50,000.
Again, this means they need not make drastic or draconian choices. (Possibly excepting re-financing a mortgage or moving to a lower cost home - and everyone ought to be simplifying or downsizing anyway!)
An even more glaring example in the article is the Duran family which earns $400,000 a year in Silicon Valley. According to Mr. Duran: "I am barely getting by". A hard sell to make to a guy in Miami whose just lost his job, his home and his health insurance, and is barely making it with food stamps and unemployment benefits.
Another family cited, the Parnells, only earned a measly $260,000 last year. As the article notes, "taxes, premiums for medical care and deductions for their 401k cut the gross to about $12,000 a month."
The poor little Parnells are left with "just over $1200 each month" disposable income, after they shell out for their mortgage ($4000 a month), college funds, and $1,300 to their church.
I am thinking here, $1,300 to a church? Reduce that to just $300 (which is still $3600 a year) and you have $2200 a month left over and no more whining! No church should be getting that much per month unless they are using it to directly feed and house homeless people.
All of this discloses how skewed and mangled the wealth concept is in the U.S.
That is, people making hundreds of thousands of dollars a year are professing some hurt, while low wage earners can't make ends meet because they aren't paid a living wage.
As the author of 'Nickel and Dimed' - Barbara Ehrenreich, noted, working at Walmart didn't even help her pay both food and rent at a dump motel. She had to go on food stamps to survive. (At least with that one 40 hr. job). There is a real moral problem here too, since without a living wage, economic warfare is all that remains- with each little person fighting and struggling against each other little person for survival.
Another point: why should the wealthy be exempt from the so-called financial 'laws' of nature? When most of them (94% by Michael Parenti's reckoning, in his 'The Dirty Truth') achieved their wealth not via labor or even competition in a labor market but via inheritance. How come a fluke of luck in life's draw enables them not to have to suffer, and work long hours at two or more jobs, but not the rest?
Extrapolating from this one beholds the loathsome moralizing issuing from certain wealthy enclaves whenever one of the hoi polloi slacks off, or refuses to seize a dirt job.
"They are too lazy! They feel too entitled and disdain a work ethic!" the wealthy moralists caterwaul.
But perhaps, they are simply too smart and perceptive and behold how much undeserved wealth inheres to a few who don't have to do a jot to earn it. Merely produce a birth certificate.
As Charles Reich poignantly notes in his book, Opposing the System, Crown Books, p. 103:
"When society itself comes to be modeled on economic and organizational principles, all of the forces that bind people together are torn apart in the struggle for survival. Community is destroyed because we are no longer 'in this together' because everyone is a threat to everyone else. "
In such a capitalist-driven, consumerist organizational economic model, wherein the resource “pie” for the non-wealthy elite grows ever smaller, the young are threats to us oldsters, as we are threats to them, as neighbor is to neighbor. It can't be otherwise. This capitalist model has seen fit, in other words, to destroy our areas of commonality and common cause, usually replacing neutral civic space (public halls, parks, libraries, rec rooms etc.) with demeaning commercial space and commercialist, capitalist values.
Reich then describes the visceral 'dog-eat-dog', endless economic warfare that ensues between people in the never ending quest to 'make it' and not be left behind. A tragic game wherein every one, every man, woman and child has a 'market value' and all abiding principles, social or moral, are reduced to economics. Alas, the cost resides in devastated marriages, families and communities.
The capitalist driven “rupture” can occur as quickly as when your neighbor builds a large recreational pool, or puts in a hot tub, and you can’t afford one. Or when he makes a great home improvement add-on while you are left to humble by with the status quo.
How do the wealthy, or even relatively wealthy, get away with their whining and feeling so downtrodden when millions of their countrymen have to dumpster dive to survive? The core reason is that too many have a meager comprehension of economics and their economic station relative to the whole.
Evidently, many working class people especially, have no remote concept of where they stand in the financial, economic spectrum. If they're ignorant of their economic position, then it follows that they can't know when that position is being compromised, far less HOW. A case in point was a survey conducted by The Economic Policy Institute some time ago. It asked generally where people thought they were in the economic spectrum: upper 1% (earning $320,000 year or more); upper 5% (> $80,000) or where.
A full 19% in this random survey claimed they were in the privileged class of the top 1%. A virtual statistical impossibility in any random study. In fact, internal survey cross-check questions on income category showed many of these working at a little above minimum wage, and even the highest at barely $44,000/yr. Nowhere near the 1% threshold.
Other commentators on this study (e.g. Froma Harrop, Ellen Goodman) have pointed to this ignorance as a basis for supporting such crap as the Bush tax cuts. Thus:
A) They didn't know where they themselves fit, and indeed inflated their wealth and positions and
B) they actually believed they'd be millionaires one fine day and be able to partake of the tax cuts. (Or 'death tax' benefits).
In fact, they are deliriously out of touch with reality. As author Michael Parenti noted ('The Dirty Truth') 94% of all wealth comes by way of inheritance not paid work. So, they are fooling themselves.
One good thing to arise out of this recession is that it has scaled down people's earlier unrealistic wealth expectations, and also toned down consumption. Now, even if a rich man wants to do a boffo major new home improvement, including putting in a dozen hot tubs, he thinks two or three times about how he will be perceived.
The more we can get the "relatively wealthy" to fret over how their ignominous consumption or tempted consumption is perceived, the better!
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