Main Street

Who is the Middle Class?

Have you been wondering about the lack of serious coverage by the media of the financial crisis facing the middle class? As David Sirota shows us, the media doesn’t seem to understand who the middle class are:

Last year, the New York Times told us it’s difficult for people to make ends meet on $500,000 a year, and the Washington Post insisted that it’s hard to “squeak by” on $300,000 a year. Now the Denver Post insists that if you make $250,000 a year, you may only be “middle class”

Where does utter disconnect with reality come from? And why does it exist?

Media voices perpetuate these myths of the impoverished wealthy, in part, because many media voices are themselves wealthy — and there’s no more powerful class solidarity than that which exists among the rich.

Indeed, the wealthy don’t just convince themselves they aren’t wealthy, they try to create the perception among themselves, politicians and the public at large that they are “middle class” and thus persecuted by taxes. Put another way, the real danger of the New York Times, Washington Post and Denver Post article floating the idea of the wealthy as not wealthy is in skewing our political debate over economics. If someone making $500,000 is just “getting by,” and someone making $300,000 is barely “squeaking by” and someone making $250,000 is in the persecuted “middle class,” then having any fact-based discussion about tax inequities becomes that much harder.

The Wall St. Journal sings a slightly different tune:

For those wondering why luxury spending is back even as unemployment hovers close to 10%, consider this: unemployment among the affluent is only 3%.

According to a study from Northeastern University’s Center for Labor Studies, unemployment for those in the top income decile–individuals earning more than $150,000 a year–was 3% in the fourth quarter of 2009.

According to the WSJ, those in the top income bracket are earning $150,000+ a year, which flies in the face of the assertions that $250,00 is middle class.

The income gap in the US has been increasing since the 1970’s when wages began to stagnate.

So, either the media is engaging in some misdirection in order to help the wealthy keep from paying their fair share of taxes, OR, the definition of the middle class is changing dramatically, and a whole lot of folks are finding out that they are the new poor.

Tags: income inequality, middle class

Raises for Wall Street

Oh, look. Another story about bailed-out financial corporations planning to give raises or extra bonuses to employees.

For some Citigroup investment bankers and traders, the changes could mean salary increases of as much as 50 percent, depending on their position. Legal and risk management employees, as well as those in the credit card and consumer banking units, whose pay is typically skewed toward salary, rather than bonuses, are expected to receive smaller increases.

Citigroup executives said the changes were aimed at retaining employees. Some Citigroup workers have already left for small, boutique investment banks or large rivals that are not so beholden to the government.

It’s not getting any more ok just because more of them are planning to do it, or because it’s about making pay come more as salary and less as bonuses, or because “Total industry pay would still be below the record levels of 2007, but only a bit.”

And do the employees getting raises include, like, the receptionists and custodians? You know, the ones who didn’t make the decisions that caused the financial crisis and who don’t earn enough to begin with?

Tags: income inequality, Wall Street