The Erosion of America's Middle Class

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While America’s
super-rich congratulate themselves on donating billions to charity,
the rest of the country is worse off than ever. Long-term unemployment
is rising and millions of Americans are struggling to survive. The
gap between rich and poor is wider than ever and the middle class
is disappearing.

Ventura is
a small city on the Pacific coast, about an hour’s drive north of
Los Angeles. Luxury homes with a view of the ocean dot the hillsides,
and the beaches are popular with surfers. Ventura is storybook California.
"It’s a well-off place," says Captain William Finley.
"But about 20 percent of the city is what we call at risk of
homelessness." Finley heads the local branch of the Salvation

Last summer
Ventura launched a pilot program, managed by Finley, that allows
people to sleep in their cars within city limits. This is normally
illegal, both in Ventura and in the rest of the country, where local
officials and residents are worried about seeing run-down vans full
of Mexican migrant workers parked on residential streets.

But sometime
at the beginning of last year, people in Ventura realized that the
cars parked in front of their driveways at night weren’t old wrecks,
but well-tended station wagons and hatchbacks. And the people sleeping
in them weren’t fruit pickers or the homeless, but their former

Finley also
noticed a change. Suddenly twice as many people were taking advantage
of his social service organization’s free meals program, and some
were even driving up in BMWs – apparently reluctant to give up
the expensive cars that reminded them of better times.

Finley calls
them "the new poor." "That is a different category
of people that I think we’re seeing," he says. "They are
people who never in their wildest imaginations thought they would
be homeless." They’re people who had enough money – a lot
of money, in some cases – until recently.

"The image
of what is a poor person in today’s day and age doesn’t fly. When
I was growing up a poor person, and we grew up fairly poor, you
drove a 10-year-old car that probably had some dents in it. You
know, there was one car for the family and you lived out of the
food bank," says Finley. "In the past, you got yourself
out of poverty and were on your way up."

Way Heads in Opposite Direction

It was the
American way, a path taken by millions. "Today the image is
you’re getting newer late model cars that at one point cost somebody
40, 50 grand, and they’re at wits end, now they’re living out of
the food banks. And for many of them it takes a lot to swallow their
pride," says Finley.

Today the American
way is often headed in the opposite direction: downward.

For a while,
America seemed to have emerged relatively unscathed from the worst
economic crisis in decades – with renewed vigor and energy – just
as it had done in the wake of past crises.

The government
was announcing new economic growth figures by as early as last fall,
much earlier than expected. The banks, moribund until recently,
were back to earning billions. Companies nationwide are reporting
strong growth, and the stock market has almost returned to it pre-crisis
levels. Even the number of billionaires grew by a healthy 17 percent
in 2009.

Two weeks ago,
Microsoft founder Bill Gates and 40 other billionaires pledged to
donate at least half of their fortunes to philanthropy, either while
still alive or after death. Is America a country so blessed with
affluence that it can afford to give away billions, just like that?

the rest of the article

23, 2010

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