Who knows the words to La Marseillaise?
I’m normally a pleasant-tempered fellow who lives a quiet middle class life, and if you saw me you’d think me just an ordinary schlub. But there are days when I wake up and feel some revolutionary fire and want to march in the streets singing old Joe Hill songs and make the Man quake at our fury. It doesn’t take much to set me off. For instance…this NY Times article, Six figures? Not enough! (and I must blame Majikthise for bringing it to my attention.)
It’s a tedious story: short comments from wealthy executives, each complaining about how $100,000/year just isn’t enough anymore, strung together with demographic factoids about the petty rich. I could feel the anger rising from the first paragraph; Marie Antoinette may have been young and stupid and shallow, but there’s also a sense that she deserved the guillotine, unkind as such sentiment may be.
Maureen Spillane, an executive at a shoe and handbag maker in New York, always thought a $100,000 salary equaled serious success. Like many professional people, however, when she finally broke the barrier, she was a bit deflated to learn that it was hardly salvation. It still took her several years of “hoarding away” and avoiding standard Manhattan indulgences - fancy food, fancy clothing - in order to afford a down payment on a one-bedroom fixer-upper on the Upper West Side.
I’ve been to New York a few times—a great city, and yes, it is expensive—and I’ve seen who lives there. Very few make anywhere near $100K; the article mentions that only 7.5% of the full-time employed in NY fall in that bracket. Somehow, I don’t think Ms. Spillane’s idea of fiscal restraint would exist in the same plane of reality as the single mother working as a clerk with no health insurance, or the truck driver barely making ends meet.
There was a time not long ago when earning six figures was a significant milestone among upwardly mobile professionals. If you were young and single in one of the nation’s big cities, you could live in a building with a doorman, drive a European car, eat at fine restaurants and vacation in Jackson Hole. For married people it meant a suburban home and college savings accounts for the children.
Not that long ago, when I was growing up, a significant milestone for my father was making it through one of Boeing’s regular cutbacks without getting laid off…and he tended to get bounced from the payroll about once a year. I remember when he finally made that five-figure salary—a grand $10,000/year, for a family with six kids—and what a difference that made. It meant we could live in a home where the roof didn’t leak and the wind didn’t whistle through the tears in the tarpaper and rats didn’t nest in our mattresses (I got to the point where having rodents scurry under the sheets wouldn’t even wake me up, but gosh, did they smell bad.)
While a salary of $100,000 is still “rarefied,” said Jared Bernstein, a senior economist at the Economic Policy Institute in Washington in charge of its living standards program, in many regions “it’s not uncommon for households in that range to feel pinched.”
I used to commute to work in North Philadelphia from my comfortable home in the suburbs. Have you ever ridden the train through Philly? You get to see the back side of the slums. The place looks like bombed-out wreckage, with buildings slumping into crumbling piles of brick and lath adjacent to empty lots of weeds and cracked asphalt and broken glass. I vividly recall the moment I was staring out the window of the train at a shell of a building, one whole side and corner gouged out of it and sheathed with a tattered film of gray plastic (it looked like Godzilla had taken a bite out of it, and left a coat of viscid slimy saliva over the gouge), and the wind blew aside one massive flap to expose two children sleeping on the floor. I felt like yanking the emergency brake and howling in anguish, “We have to do something!” But no, I just sat there choking on my pity and we kept going.
I think that household might have felt “pinched”.
Passing the $200,000 threshold these days appears to be a ticket to the good life much in the same way that crossing the hallowed $100,000 barrier was during the prime yuppie years of the 1980’s. About 1.9 million tax filers (or less than 2 percent) reported gross adjusted incomes between $200,000 and $500,000 in 2002, the last year for which the Internal Revenue Service has compiled statistics. The year a similar percent of tax filers had incomes between $100,000 and $200,000 was in 1987.
I remember those prime yuppie years! They were good years for me and my family. I was newly married, we’d have our first kid in 1983, and we spent most of that decade living in Eugene, Oregon as graduate students. On a salary of $5,000/year. We did have access to inexpensive health insurance and subsidized student housing, so it wasn’t quite as dreadfully poor as it might sound, but there sure wasn’t much slack in the budget. My dream of the good life then was a time when we wouldn’t have to live on a diet of Mac&Cheez-Food three days a week, when I wouldn’t have to scavenge change from the sofa in order to get a paperback at the used bookstore, when our idea of splurging on a vacation wasn’t taking a walk down to the movie theater for the bargain matinee.
I achieved my dream a few years later when I graduated and got my first post-doc at the princely salary of $15,000/year. And everything since has been nothing but gravy. Maybe these yuppies ought to get a real taste of poverty before they’re allowed to whine about how they “need” $200,000 to live the good life.
The real point, perhaps, is the dreaming itself, the sense among many professionals that there needs to be some light flickering on the horizon to get you through the long hours and the stress of a career. In that sense, Mr. Coleman said, the dream salary of today is the same as it’s always been. “It’s beyond reasonable expectation,” he said, “but not beyond hope.”
Ah, yes. Hope. Hope that one can earn something more than $9/hour, with minimal benefits, without fear that your boss will fire you if you stand up for your rights. Hope that you can keep your kids fed and clothed without working two jobs. Hope that retirement doesn’t mean living on dog food while waiting for the first illness to cost you your home, your independence, and your dignity. But as long as the top tier keeps sucking up an undeserved proportion of the wealth in this country (and demanding more!), we may just have to give up on hope and settle for outrage instead.
February 27th, 2005 at 9:17 am
I pointed out recently in my blog that 39% of Americans think they are in the top 1% or that they’re going to be there someday.
Those people in the top 10% are one of those who deluded themselves into thinking that it was easy to get into the top one percent, and they only discovered that it’s a lot easier to get to the top 10% (a $100,000 salary) than into the top 1%.
And yes, there’s a HUGE gap between rich and poor when there are those who think they can’t have a good life without $200,000/year, while others are scraping by on less than $10/hour.
February 27th, 2005 at 10:04 am
I think the point of the article was that the middle class is getting further and further out of reach. I don’t think they expect the bottom 90% to feel sorry for those who earn $100,000+. My family is one of those and the way I read your excerpts (I haven’t read the article yet) is that it comes as a surprise to us that we are at the place we think of as average middle class, not upper middle class or wealthy. I think Democrats should use this to their advantage, John Edwards already did in his presidential run. The place I am at SHOULD BE average middle class, and we have to find more ways to bring up the average person’s standard of living.
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquillity, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
We are failing to promote the general welfare when the average family is struggling. People are working harder just to stay afloat instead of getting ahead. The American Dream has become treading water.
February 27th, 2005 at 10:50 am
Wow….Boeing, Phlly, and Eugene in one post…..but then you were in grad school, so you’re not my evil twin.
In the late 60’s my father worked for Boeing….as a senior manager making 16k a year. That was darned good money, we lived pretty well, had a cabin cruiser, the whole works…but first the layoffs, then the inflation hit. Life was not easy after that. And I’ve seen The Ruins of North Philly, as the locals called the area 16 years ago. Dunno what the figures are now, but there weere over 10,000 abandoned housing units in that neighborhood then.
Despite what the previous commentor thinks, 100k is not “mid-middle class”. The US median household income in 2002 and 2003 was 43,318…. a long way from that 100k figure.
February 27th, 2005 at 10:58 am
I read in the Guardian on line that the UK is contemplating raising the minimum wage to 5.0 pounds per hour. At the current rate of exchange, that’s better than $9 per hour. With universal health coverage, that’s not bad for a backward county.
February 27th, 2005 at 11:01 am
Greg, you misunderstood my comments. I am saying that in my younger days, when I thought of people who live like I do now, I thought of that as middle-middle class. I thought the average family lived like this and it is only now that I am here and in my 40’s that I realize that there are few who ever get here. The only reason why we are here is because my husband has a union (Teamsters). I think if you read the article you will also realize that the people profiled thought the same, they thought that earning an average living in that $40 to $50K range would get you the life I am (an they are) now living, and the reality is that you have to earn double that.
February 27th, 2005 at 1:44 pm
New York (probably joined only by LA and San Francisco) have cost structures (and local tax rates) that make them prohibitively expensive for all but the super rich (or European tourists enjoying the strength of our dollar). It’s also ridiculously expensive to do business here, which in turn, limits the amoung of business done here.
What is different is a variety of perversities stemming from the tax system colliding at once: specifically, a very (VERY) high local sales tax, and similarly regressive city and state income taxes, and the all important most regressive tax of all, the payroll tax.
This combination of regressive taxes on those earning less than $92,001 is ganging up on the formerly middle class lifestyle.
New York, of course, is blessed with other perversities such as our rent control/stabilization system which sets up an arbitrary have/have not housing market, and, of course, our famously convoluted regulatory scheme that makes starting new businesses here… hard.
But mostly, it’s the tax system. The fact is, $100,000 is still a nice income here. BUT… that’s before tax. If you’re average one-bedroom apartment in Manhattan is going in the $3,000 to $3,500 range (see above re: perverse housing market), and we have the highest marginal and effective tax rate in the country (say, all told, maybe 35-40% or more), you do the math as to what’s left over… Even WITHOUT sending the kidsd to private school.
It really is as simple as that.
February 27th, 2005 at 4:28 pm
Geez, here I was thinking I’d like my 5 figures to start with something other than a 2.
February 27th, 2005 at 4:46 pm
The Talking Dog has a point here. It is definitely easily possible for a person making “only” $100,000 a year in Manhattan to spend well over half his/her take-home pay on rent alone without having to invoke an address on Park Avenue. Someone making $100,000 year grosses $8,333 a month and probably takes home around roughly $5,500 a month after taxes (it may even be less than that, given the city tax). It is indeed very easy for that person to spend half of his/her income on just an OK apartment or even a not so great apartment. (Have you seen a really nice apartment in NYC recently for less than $2,800 that wasn’t rent-controlled? Studios in decent neighborhoods and one bedrooms in not-so-decent neighborhoods go for that. One bedrooms in decent neighborhoods can easily run $3,500 a month. Check the NYC apartment listings sometime.) One person in the article had a monthly rent of $4,650 living near Columbus Circle and had to share an apartment.
Look, I’m not arguing that we should have a great deal of sympathy for these people because of their “plight” of making “only” $100,000 a year and of not making $200,000 a year or more (all while choosing to live in Manhattan). I’m really not. I am, however, pointing out that it is not as ludicrous as you make it sound to acknowledge that a person making $100,000 a year in NYC is just not particularly “affluent,” given the ridiculously high real estate costs, taxes, and general high cost of living there. In NYC, $100,000 a year probably buys entry to the upper middle class–barely. Will someone making $100,000 be comfortable in NYC? Certainly. But really well off or–dare we say?–affluent? No, at least not in NYC. In Alabama, where (as the article points out) $100,000 is “country club” income, definitely, but not in NYC.
February 27th, 2005 at 5:16 pm
No, this is still missing the point.
Let’s grant that $100,000 a year in NY is like $50,000 a year anywhere else. I’m still thinking, “Woo hoo — $50K! That’s darn good money!” People who work at Wal-Mart and Jiffy-Lube and waitress at the Mom&Pop Cafe and juggle a couple of jobs to make ends meet are not going to be sympathetic to this revised argument, either.
February 27th, 2005 at 6:05 pm
No, I don’t think I’m not missing the point at all. You’d be surprised that those people who work at “Wal-Mart and Jiffy Lube and watress at Mom & Pop Cafes” dream of more. Many of them believe that someday they too can reach those levels of income. Many of them could well be more sympathetic to that argument than you might think. (Or perhaps a better way of putting it is that they are probably not as hostile to it as you are.)
February 27th, 2005 at 7:23 pm
By very definition, someone who earns the median income has to be middle-class, because he’s right in the middle.
Because America is so class stratified, people making around 100,000 only hang out with other people who make a 100,000, and they completely lose perspective that the average American is only making forty thousand and something.
February 27th, 2005 at 8:20 pm
The way to get to $100,000+ is either through unions or a college education. Most Americans do not have access to either, and if we want to raise the standard of living, we have to increase that access.
February 27th, 2005 at 8:26 pm
When I was a kid in Ellensburg, Washington in the early ’70’s the guy who pumped the Union ‘76 gas into my VW was an engineer from Boeing. He told me he’d been laid off, and was waiting to go back when another project came in.
February 27th, 2005 at 9:03 pm
Nice piece, PZ.
My wife and I will just barely crack the 100k per annum barrier for the first time this year. And yes, we live in the Bay Area where we pay about 1800 a month mortgage on a 900-square-foot house, and yes, we might begin to feel a crunch if we had a couple of kids, which we don’t. And a big health problem might see us out on the street. I’m in my mid-forties, and that last isn’t the abstraction it was two decades ago.
But there is such a thing as enough money. We’ve got lots of toys we don’t really need and a couple objets d’art and vacations and restaurant meals and satellite TV, and we don’t really need to make what we make to be comfortable.
If we lived in Omaha, we’d be luxuriously comfortable on about 70K.
February 28th, 2005 at 8:33 am
Remember, we have a consumer economy. If enough people said “Okay, I’m comfortable now. I’ll stop” the whole system would collapse.
At any given social level, we’re expected to spend money on certain things — the right house, the right car, the right vacation, the right hobbies. We never have “enough”, because the next step up the ladder has to spend more than we can afford.
Bitching and whining is universal.
February 28th, 2005 at 10:38 am
One thing some seem to forget when doing the SF/NY vs the rest of the world comparison is that the automobile is a nearly mandatory expense anywhere outside of SF and NY, so the 2:1 argument doesnt quite hold water when all factors are considered. LA is more fun; there the rent is high and the automobile is mandatory.
Of course the high price of housing for those executives is driven by the bigger is better approach that your subisdy of their mortgage makes possible.
I have an idea, lets lift the cap on Social Security contributions and lower the cap on mortgage deductions. In fact we could tie them together. I propose $150k. If they want to raise the mortgage decution to $200, then the SS contribution cap goes up to the same level. Savings on forests alone would justify such an approach, not to mention stopping the transfer of wealth in the form of housing to the very well to do.
BTW, I grew up in a mobile home set on 2 acres in central Oregon, but have since live and traveled to many of these high priced cities. People live in those places because of the economic benefit. They want to complain they can move to the center of the continent and try to find a job that pay even half of that magic $100K.
March 1st, 2005 at 8:18 am
Here in Copenhagen, Denmark my little household (My wife and I) are just breaking 110.000$, which is a good enough pay in Denmark. (In 200 it would only have been about 70.000$)
I think we are in the top 20% of the households in that regard - so we are pretty good of. By the way those 110.000 becomes about 66.000 after tax - but tax includes all schooling including Masters degree or equivalent, helt insurance in DK and in the rest of the EU (and Scandinavia). If we get any childre we will get special allowences pr child (about 1.500$ a year if I remember correctly), but of course day care is pretty steep, for the youngest its about 300-400$ a month, with discounts available for more than one child. Since most Danish women have a job out of the house - most children are in day care.
A small car - a little Kia will set you back about 27.000$ while a Mazda RX 8 starts at about 88.000$
A small 2 bedroom apartment 60 sq meters in a radius of about 5 km of the city center of Copenhagen will set you back about 180.000$, a 4+ bedroom in the same are in a size above 100 sq meters will be about 550.000$
A house in the suburbs of Copenhagen will set you back around 400 - 500.000, for a 120 sqm house with a mortgage of about 3.000 $ if you have the 20% for the hands downs payment on the house.
By the way, the minimum wage for people over 18 working at McDonalds is about 17$ pr hour, at that level your tax rate will be about 30-36% depending on membership of the peoples church and where you live.
Well thats a lot of facts about good old Denmark - where people judge them selves to be the happiest of all people - but we still bitch and moan about the high taxes, the expensive cars and houses - the unreliable and expensive public transport systems etc.
/Søren
March 1st, 2005 at 9:16 am
As a striving New Yorker, I appreciate the reality check, PZ. You’d be surprised, though, at how little a dollar (or $100K) goes in NYC, even in the outer boroughs.
The point that Desert Donkey makes about economic benefit is important. I often think about how I could move elsewhere with a lower cost of living and maintain my current salary. Unfortunately, that option is not available right now for me and many of my Tri-state neighbors.
Quality of life is a tough concept to grapple with, regardless of your rung on the socioeconomic ladder. Money doesn’t automatically deliver happiness, but anxiety over money definitely kills your buzz.
March 1st, 2005 at 2:22 pm
Pissed? That seems a bit harsh.
As a newspaperman, I have one and only one rule — never to worry about the poverty of people who make more money than I do.
Nevertheless, I cannot see the equivalence between the aspirations and expectations of someone who sweats over a hot computer selling handbags and somebody who settled for whatever qualifications JiffyLube demands.
The idea that college is beyond the reach of most Americans is laughable. Beyond the grasp, definitely.
I wouldn’t live in Morris, Minn., for any amount of money, having put in 11 wearisome years baking and freezing in Des Moines. Me for balmier climes.
But I hardly think being a college professor is the pits. And your choice wasn’t that or JiffyLube, was it?
Maybe what ought to happen is to tell kids when they’re in high school what they can expect as output for input.
As a friend of mine, a college professor with no students to hassle with, who works on rural development among tropical farmers puts it, “Low input means low output.”
It’s one thing to strive and be rejected and filled with resentment. Quite another to skip the first step and go directly to failure and resentment.