States Where the Middle Class is Disappearing
Regarding the above captioned, following up on absurd housing costs and declining income levels, a Naybob of Simian nature sent us this article from Yahoo regarding the disappearing Middle Class.
The top five states where the middle class and their incomes are shrinking:
5. Washington
4. Rhode Island
3. Maine
2. Vermont
and Number One... drum roll please...
1. California
Interesting user comments, mostly about HOUSING COSTS....
From END THE FED: "I live in CA and yes... it's getting worse and worse. over the last decade I have watched good middle class neighborhoods fall apart and new insanely expensive gated communities pop up everywhere. In SoCal it is just about impossible for a middle class family to buy a home due to contractors overbidding ANY home for sale so they can remodel and flip it. a 2 bedroom #$%$ box on a postage stamp of land will sell for more than half a million here. a lot of the people I know my age (i'm 31) are moving out of state as fast as they can. I plan on doing the same, it's just hard to save anything with the prices of everything here. I make too much for Gov't assistance yet can't qualify for a home loan... stuck in the middle with no way out....."
From MS LA LA: "Not surprised to see California as #1 on this list. I've been trying to buy a home here for almost 3 years with no luck. For almost 1.5 years I was constantly outbid by investors foreign/domestic coming in with all cash and jacking up the price. I met so many people along the way who had this same issue. Of course this caused prices to become artificially inflated and myself and many others I know where priced out of the market and stripped of the ability to buy homes in a decent area for our families. Now those same homes I lost out on are selling for $50,000-$100,000 more than what they did just 2 years ago, how the heck can a home appreciate in value that fast?! The more I pay off debt to qualify for a higher loan amount the higher the home prices climb and it's just like I'm running in circles trying to catch my tail. I make over $70,000 a year/have one kid and all I can afford is a 2 bedroom in the middle of drive by city. Homes here with gangs and prostitution tracks on the corners are literally selling for 1/2 million dollars, but it's not to families it's to these investment companies who are charging astronomical rent hoping to cash in in on Section 8 which pays $2400 a month for a 3 bedroom home in Los Angeles County. I know people are in business to make money but it's sad that in order for a few to be rich the American dream is now out of reach for so many and the quality of life is horrible these days. Back in the day a father could work, mom stay home and they could still buy a small piece of something for their families. Now with everyone in the house working we can hardly afford broom closets."
From XO: "Housing costs are just killing the middle class. I make $80k a year and can't afford to live anywhere safe within the Atlanta perimeter (Except Decatur) that has decent schools unless I go for a small 1 bedroom apartment or condo. And people wonder why younger generations aren't getting married and having lots of babies...we can't afford it! The percentage of income we spend today on housing is far above what it was for any other generation. At my age and comparable income level in the 1950s, I could've easily bought a plot of land, built my own house, gotten married, had kids, supported them with no problems, gone on family vacations every year, saved for retirement, etc. That's a pipe dream today. Healthcare costs are rising. Taxes keep coming. Job stability, required for long-term planning, isn't what it used to be. I get excellent reviews at work, but I'm afraid to buy a home because I have no faith in the job market. The cost of goods and services is rising above pay increases...I mean eventually the lower middle class will fall to the poor and cease to exist. It's nasty out there :)"
From Bob: "This is not rocket science. The middle class was by and large built around manufacturing. When they shipped those jobs overseas, the middle class was badly hit. Sure you can get a widget for $1.00 less, but no one has the dollar. And I've SEEN long established companies fold, because they could not compete. And talk at a trickle down effect. JOE THE STEELWORKER, no longer has the money to take his family out to dinner, doesn't buy the new bass boat, doesn't buy his cabin on the lake. So, all of those industries are affected. Bring the manufacturing jobs back, and you again will start to see the MIDDLE CLASS flourish. Until then, we'll see more of the same."
The Nattering One muses... California at #1 and those comments, big surprise there, eh? This isn't the ownership society, that is illusory, it is the sharecropper society, as in you rent your home from the bank. If you wish to call it buying as asset with 97% leverage, at a 4% rate, with maintenance costs and tax obligation/write offs, so be it. But the illusory American Dream is the least of our problems...
As for the middle class, that is no mystery, you can find out what happened to them, why we are in the hole we are in, and how we may be able to get out, right here, here, here, here and here.
Below the historical lesson that the sharecroppers just can't seem to learn, and this is one of the reasons why the mistakes keep getting repeated over and over:
"Homes are sticks and bricks where people live their lives and raise families. Homes should not be chattel for serial flippers, speculators and landlords. Seek margin in video games or cars or stereos or durable manufacturing, not the necessities of life. If you lived in the home for an extended period and it appreciates, that's one thing. But beware, when you turn your own backyard into a major source of wealth, that's when the trouble starts."
The top five states where the middle class and their incomes are shrinking:
5. Washington
4. Rhode Island
3. Maine
2. Vermont
and Number One... drum roll please...
1. California
Interesting user comments, mostly about HOUSING COSTS....
From END THE FED: "I live in CA and yes... it's getting worse and worse. over the last decade I have watched good middle class neighborhoods fall apart and new insanely expensive gated communities pop up everywhere. In SoCal it is just about impossible for a middle class family to buy a home due to contractors overbidding ANY home for sale so they can remodel and flip it. a 2 bedroom #$%$ box on a postage stamp of land will sell for more than half a million here. a lot of the people I know my age (i'm 31) are moving out of state as fast as they can. I plan on doing the same, it's just hard to save anything with the prices of everything here. I make too much for Gov't assistance yet can't qualify for a home loan... stuck in the middle with no way out....."
From MS LA LA: "Not surprised to see California as #1 on this list. I've been trying to buy a home here for almost 3 years with no luck. For almost 1.5 years I was constantly outbid by investors foreign/domestic coming in with all cash and jacking up the price. I met so many people along the way who had this same issue. Of course this caused prices to become artificially inflated and myself and many others I know where priced out of the market and stripped of the ability to buy homes in a decent area for our families. Now those same homes I lost out on are selling for $50,000-$100,000 more than what they did just 2 years ago, how the heck can a home appreciate in value that fast?! The more I pay off debt to qualify for a higher loan amount the higher the home prices climb and it's just like I'm running in circles trying to catch my tail. I make over $70,000 a year/have one kid and all I can afford is a 2 bedroom in the middle of drive by city. Homes here with gangs and prostitution tracks on the corners are literally selling for 1/2 million dollars, but it's not to families it's to these investment companies who are charging astronomical rent hoping to cash in in on Section 8 which pays $2400 a month for a 3 bedroom home in Los Angeles County. I know people are in business to make money but it's sad that in order for a few to be rich the American dream is now out of reach for so many and the quality of life is horrible these days. Back in the day a father could work, mom stay home and they could still buy a small piece of something for their families. Now with everyone in the house working we can hardly afford broom closets."
From XO: "Housing costs are just killing the middle class. I make $80k a year and can't afford to live anywhere safe within the Atlanta perimeter (Except Decatur) that has decent schools unless I go for a small 1 bedroom apartment or condo. And people wonder why younger generations aren't getting married and having lots of babies...we can't afford it! The percentage of income we spend today on housing is far above what it was for any other generation. At my age and comparable income level in the 1950s, I could've easily bought a plot of land, built my own house, gotten married, had kids, supported them with no problems, gone on family vacations every year, saved for retirement, etc. That's a pipe dream today. Healthcare costs are rising. Taxes keep coming. Job stability, required for long-term planning, isn't what it used to be. I get excellent reviews at work, but I'm afraid to buy a home because I have no faith in the job market. The cost of goods and services is rising above pay increases...I mean eventually the lower middle class will fall to the poor and cease to exist. It's nasty out there :)"
From Bob: "This is not rocket science. The middle class was by and large built around manufacturing. When they shipped those jobs overseas, the middle class was badly hit. Sure you can get a widget for $1.00 less, but no one has the dollar. And I've SEEN long established companies fold, because they could not compete. And talk at a trickle down effect. JOE THE STEELWORKER, no longer has the money to take his family out to dinner, doesn't buy the new bass boat, doesn't buy his cabin on the lake. So, all of those industries are affected. Bring the manufacturing jobs back, and you again will start to see the MIDDLE CLASS flourish. Until then, we'll see more of the same."
The Nattering One muses... California at #1 and those comments, big surprise there, eh? This isn't the ownership society, that is illusory, it is the sharecropper society, as in you rent your home from the bank. If you wish to call it buying as asset with 97% leverage, at a 4% rate, with maintenance costs and tax obligation/write offs, so be it. But the illusory American Dream is the least of our problems...
As for the middle class, that is no mystery, you can find out what happened to them, why we are in the hole we are in, and how we may be able to get out, right here, here, here, here and here.
Below the historical lesson that the sharecroppers just can't seem to learn, and this is one of the reasons why the mistakes keep getting repeated over and over:
"Homes are sticks and bricks where people live their lives and raise families. Homes should not be chattel for serial flippers, speculators and landlords. Seek margin in video games or cars or stereos or durable manufacturing, not the necessities of life. If you lived in the home for an extended period and it appreciates, that's one thing. But beware, when you turn your own backyard into a major source of wealth, that's when the trouble starts."
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