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The White-Collar Working Class: Has the American Middle Class Gone into Foreclosure?

            Last year, according to the New York Times, the average debt in the United States was $121,650, while the average savings was just shy of $450. You don’t need a PhD in Economics or an MBA to know that something is terribly wrong and imbalanced with those figures.

            Since the end of World War II, debt has become a way of life in the United States. A host of economic factors contribute to and depend on this scenario. In the aftermath of wartime production booms, the US economy experienced fits and starts in its manufacturing and industrial sectors. Some areas, namely automobile production, remained strong for several decades, but in the face of competitive foreign markets, eventually suffered dramatic losses. Now, Motown looks more like No-town. Abandoned car plants and residential ghost towns having taken the place of what was once considered the “arsenal of democracy,” a city that less than sixty years ago was one of the most thriving capitalist centers on earth. Other sectors of the US domestic industrial economy – steel manufacturing, ship and airplane building, textiles and clothing manufacturing – limped along during the twentieth century, but eventually traded US winters for sunnier climates. Such trends boil down to the near total triumph of laissez faire economics: production became too darn expensive in American cities where workers demanded union protection, medical care, and life insurance; better to move production overseas or South of the border where workers worked on the cheap.

            While America was hemorrhaging jobs and eroding its industrial and manufacturing base, the service sector and knowledge based economy blossomed. The technological explosions of the computer industry birthed Silicon Valley and American cities, such as New York, Chicago, and Los Angeles, along with London and Tokyo, became the global nodes of the finance capital and banking industries. Today, 1 in 9 New Yorkers work in jobs that are in someway connected to finance and banking. The service sector dominates the American economy, from those who “wage a living” in restaurant and fast food, fast-coffee jobs to those who “manage risk” for multi-millionaires.

            At the same time, the Untied States has become a nation of consumers. We buy the stuff that workers around the globe produce, and we are able to do so at the cheapest prices possible because many of those workers earn next to nothing. In the US, the dominance of retail chains such as Wal-Mart, Costco, and K-Mart is due in large part to the massive infusion of cheap goods into one of the largest consuming populations in the world. Another aiding factor is easy access to credit. According to the Times, in the twenty-first century, 40% of American households carry credit card debt, up from 6% in 1970, and the average home has a staggering 13 credit cards!
            So, Americans don’t make anything. As a country, we don’t really export much except entertainment, hip-hop and pornography. And we import and then buy a lot of cheap clothing, cars, electronic equipment, furniture, and plastic crap, which the rest of the world’s workers produce at the lowest wages possible. We don’t save, and we are drowning in debt. How does this type of economic imbalance affect class in America?

            Obviously it creates both the super-rich and the super-poor. The June 30, 2008 issue of The Nation provided a grim portrayal of this new inequality, what some critics are calling a “new gilded age,” one that is more grotesque in its wealth imbalance than anything robber baron Americans of an erstwhile era could have dreamed. True, today’s American working poor probably live longer, die less from work related injuries than factory workers of an earlier Gilded Age; and there are no children contracting silicosis from working in coal mines. Then again, we have successfully exported much of that misery to other countries. Life at the polar ends of economic inequality is often analyzed and editorialized, but what about life in the middle? Does America even have a middle class anymore, or has the middle class gone into foreclosure?

            So much about class in America is tied up with culture and status, with styles of speech, dress, musical taste, food choice, and comportment, as well as material branding, what label one has on their clothes or car. Another important characteristic of class in America has to do with access, namely access to housing in particular neighborhoods, access to a particular private or public school, access to social networks that can lead to employment opportunities and economic and social mobility. The middle class in America is extremely amorphous due to the sheer variety of definitions that most people in this country use to explain themselves in relation to other people. An irony of the American middle class is that everyone and anyone could be in it.

            At the same time, the middle class may be extinct. As prices of basic necessities, such as food, electricity, and gasoline skyrocket, and monthly bills for housing, utilities, education and consumer debt increase, most Americans are probably one paycheck away from financial distress. Who can save the proverbial “six month” emergency fund when student loans, rent, and gas money whittles away the monthly income of two working adults? Today’s up and coming American middle class has their status and security locked up in installment loans. Only half of all college students in the 1990s carried student loans. Now, that number is over 66%. Some graduate and professional degree recipients will spend 20-30 years repaying their educational debts. Education, which we are told is one’s ticket to a better life in this country, has now become one more economic burden, an albatross around one’s neck. Add on credit card debt, the incredible competition for jobs, incredibly high rents and sub-prime mortgage schemes, and what should be the next generation of middle class Americans looks like a population that can barely keep its head above the country’s rough financial waters. Wishful thinking says that it's unlikely a rough riptide will pull Americans under and drown them, but tell that to the tens of thousands of people who in the last five years have lost their homes and declared bankruptcy.    
            Class in American as we once understood it is probably now a quaint idea, along with professional baseball players who did it “for the love of the game,” and pollution free environments. Whereas once a “white collar” job, and the soft hands, starched suits and stable salaries that accompanied it, enabled entry into the American middle class, perhaps (suburban) homeownership and car ownership, nowadays there is a growing white-collar working class, women and men who attain an advanced education, acquire a “respectable” profession and spend the rest of their lives paying for the pleasure. The white-collar working class is a symptom of over fifty years of erosion in the country’s manufacturing industries, expansion of easy access to credit, ballooning in consumption practices, and a reckless culture that has placed almost everything on consignment. We don’t make anything and we don’t own anything. Many Americans, who once saw the white-collar world as having arrived in a place better than their parents and grandparents, will probably die owing.

For more and more generations, the American white-collar working class, the American Dream has been permanently placed on layaway.  Maybe the next generation can go to the department store or real estate company or student loan office, pay the balance and take it home, that is, if they can even recognize what it is they are shopping for.