Magazine article The Futurist

How the Recession Has Changed the Middle Class: The 2008 Recession Was Hard on Everyone, but It Did Not Distribute Its Woes Evenly

Magazine article The Futurist

How the Recession Has Changed the Middle Class: The 2008 Recession Was Hard on Everyone, but It Did Not Distribute Its Woes Evenly

Article excerpt

In Pinched, journalist Don Peck paints a portrait of the middle class as jilted lover, nursing feelings of despair and betrayal. After doing everything right, the question this poor sop finds himself asking, over and over, like a funerary wail, is not "Why aren't I good enough," but the far more terrifying "Why aren't I good enough anymore?" There is no easy rejoinder. The American Dream has simply moved on and taken a new name. Our hero is left with only the awareness that his best days have passed him by.

The 2008 recession permanently altered the lives of millions of Americans, neighborhoods, and even entire regions of the United States. Peck shows that many middle-class, middle-skill jobs that existed prior to 2008 will never return, opportunities that had seemed perennial just a few years ago have permanently vanished. Labor experts such as John Challenger, writing in this magazine, have encouraged job seekers in low-growth areas to strike out for more-fertile ground. In fact, much of the advice given to the nation's unemployed and underemployed has amounted to: Be adaptable, seek training, and move. These admonishments, while sound, are also callous. People forced by market conditions to make dramatic life adjustments are rarely thankful for the opportunity to do so.

In many respects, this current state of woe represents a culmination of trends that have been building for some time. Throughout the last 10 years, however, policy makers and financiers were able to post-phone their full impact. The rapid appreciation in the housing market between 2002 and 2008 created an illusory sense of prosperity in the absence of real salary growth, which has budged little from the 1970s. Since the largest asset owned by most Americans is their primary residence, many people experienced an enormous, and artificial, expansion in net worth over the last decade. The losses resulting from the housing collapse will linger for a long time, affecting consumption and investment habits for years.

"Many Americans, even those who didn't lose their jobs, lost a decade's sense of progress. Long deferred, a decade's disappointment has been concentrated in the past three years," notes Peck.

Stagnant wages and vanishing jobs, compounded by the intractable housing crisis, have metastasized into to a very literal paralysis. Nearly one in four Americans owes more on his or her house than that house is worth. Peck points out that, in Arizona and Florida, the number is one in two, and in Nevada, two in three. Many individuals who are underwater on their home loans simply can't move to a better economic environment, even if they wanted to. They're caught between the proverbial rock and hard place, the mountainous amount of debt they owe and the cold truth of their home's actual value.

All of this has fundamentally changed the demographic makeup of America's white-picket-fence suburbs, which now house more poor people than do the nation's urban centers. It's an ironic reversal. In the 1950s, suburban developments were sold as a means to escape city squalor, which was understood as a thinly veiled allusion to non-Caucasian neighbors. Half a century later, actual squalor in these neighborhoods pits frustrated home-owners against equally desperate renters.


"This isn't the neighborhood that I moved into," one frayed suburbanite complained to Peck. "It's never going to recover to what it was."

Contrast this predicament with the plight, or more accurately flight, of the nation's moneyed elite. …

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