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    There is some overconsumption, yes, but a recent study shows that inflation, health care costs, more expensive (i.e. technological) cars and appliances, and the way the government is reporting economic figures has basically trashed the American income.

    This is a MUST READ article.

    Middle-class families have been threatened on every front. Rocked by rising prices for essentials as men’s wages remained flat, both Dad and Mom have entered the workforce—a strategy that has left them working harder just to try to break even. Even with two paychecks, family finances are stretched so tightly that a very small misstep can leave them in crisis. As tough as life has become for married couples, single-parent families face even more financial obstacles in trying to carve out middle-class lives on a single paycheck. And at the same time that families are facing higher costs and increased risks, the old financial rules of credit have been rewritten by powerful corporate interests that see middle-class families as the spoils of political influence.

    Fully 75 percent of family income is earmarked for recurrent monthly expenses. Even if they are able to trim around the edges, families are faced with a sobering truth: every one of those expensive items—mortgage, car payments, insurance, childcare—is a fixed cost. Families must pay them each and every month, through good times and bad; there is no way to cut back from one month to the next, as can be done with spending on clothing or food. Short of moving out of the house, withdrawing their children from preschool, or canceling the insurance policy altogether, they are stuck.

    In other words, today’s family has no margin for error. There is no leeway to cut back if one earner’s hours are cut or if the other gets sick. There is no room in the budget if someone needs to take off work to care for a sick child or an elderly parent. Their basic situation is far riskier than that of their parents a generation earlier. The modern American family is walking a high wire without a net.

    People are making so little that they have no choice but to work overtime, two or three jobs, have working spouses, make their teens still at home get jobs, etc.

    If the minimum wage had followed inflation, it would be $9.09 today. People working at Disneyland, if their salaries had followed inflation, would be making about $25 an hour, but they are making today's minimum wage or slightly better ($8 or so)

    I see this every day. We all live on the same property, my MIL, my BIL and his family, and us. We all work (except my SIL) and make about $9 an hour. This month, we very nearly lost our car and car insurance. I'm putting stuff up on eBay as fast as I can. I don't drive unless I have to. We are skating on very thin ice -- if anything happens to my husband or myself we are fucked. We have no healthcare. We live in a singlewide with a leaky roof that we got for free. Our one "luxury" is a relatively new car that we bought 2 years ago when my husband worked in the city, but that we now owe more on than the car is worth so we're stuck with it (and the $500/month payments and $99/month insurance). I make most of our food myself and we have stopped buying ready-made frozen convenience foods. I buy sale items and use coupons and have cut out virtually all unnecessary groceries. We buy most of our clothing at thrift stores.

    Where would you suggest we cut our budget?

    Bizarro World sucks... I want to go home to America.

    Dial Acorn Heads for all your website needs!

    by willers on Thu Jun 22, 2006 at 11:08:27 AM PDT

    [ Parent ]

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