Kelly Bates is a forty-one-year-old single mom who lives with her nine-year-old daughter, Danielle Lucky, in Collingdale, Pennsylvania, a middle-income neighborhood of aging red-brick row houses a few miles from the Philadelphia airport. Bates, who is willowy, with large brown eyes, had grown up in South Philadelphia in the seventies and eighties, as part of the city’s burgeoning African-American middle class: her father was a heating contractor, and her mother worked for the Bell Telephone Company. But over the decades crime in the neighborhood increased, and, in 2015, Bates bought a three-bedroom house in Collingdale for seventy thousand dollars, hoping to escape the violence. “I wanted Danielle to go outside and play and not worry about getting shot,” Bates told me recently. Since 2016, Bates has worked as an assistant director at Kinder Academy, a chain of five child-care centers around Philadelphia. Through her work there, she received a grant to earn a bachelor’s degree in early-childhood education, and is about a year away from graduating. “Babies are my passion,” she told me. “I’m part mom, part dad, part therapist, part doctor, and part food-program officer.” Continue reading “How the Coronavirus is Killing the Middle Class”
Tag: American middle class
How Trump Squeezed Homeowners For A Trillion Dollars
In recent weeks, President Donald Trump has been talking about plans for, as he put it, a “very substantial tax cut for middle income folks who work so hard.” But before Congress embarks on a new tax measure, people should consider one of the largely unexamined effects of the last tax bill, which Trump promised would help the middle class: Would you believe it has inflicted a trillion dollars of damage on homeowners — many of them middle class — throughout the country?
That massive number is the reduction in home values caused by the 2017 tax law that capped federal deductions for state and local real estate and income taxes at $10,000 a year and also eliminated some mortgage interest deductions. The impact varies widely across different areas. Counties with high home prices and high real estate taxes and where homeowners have big mortgages are suffering the biggest hit, as you’d expect, given the larger value of the lost tax deductions. But as we’ll see, homeowners all over the country are feeling the effects.
I’m basing my analysis on numbers from two well-respected people: Mark Zandi, the chief economist of Moody’s Analytics; and Hugh Lamle, the retired president of M.D. Sass, a Wall Street investment management company.
Most Americans think of themselves as middle class. For many, the line between a stable life and a fragile one is thinning.
Examine the typical American family’s monthly budget, line by line, and a larger story emerges about how the middle class has evolved.
What it means to be middle class hasn’t changed much — there’s a steady job, the ability to comfortably raise a family if you choose to, a home to call your own, an annual vacation. But what it takes to achieve all that has become more challenging.
The costs of housing, health care and education are consuming ever larger shares of household budgets, and have risen faster than incomes. Today’s middle-class families are working longer, managing new kinds of stress and shouldering greater financial risks than previous generations did. They’re also making different kinds of tradeoffs.