Shattered Dream
For Many Working Families, the American Dream is Getting Further and Further Out of reach.
For years, middle-class jobs paved the way to the American dream of good pay, health care, quality education and a secure retirement. All of it was a promise: If you worked hard and made wise choices you could get ahead.
A generation ago, that promise was stitched together by the strength of the American labor movement, when more than one out of three workers belonged to a union. Their wages helped set the mark for non-union workers and raised the standard of living for all.
A Different Economy
Today, union membership is down, wages are stagnant, costs have gone up and the current generation of young people is the first in 100 years to expect they won’t be as well off as their parents. America’s middle class is under attack.
Corporations no longer feel a need to care for the workers whose efforts make their profits soar and their CEOs super rich. While companies ship American jobs to other countries, they dodge federal taxes by creating paper headquarters overseas. Meanwhile, the politicians who are in these corporations’ pockets turn a blind eye to it all.
The result? Since George Bush has been in office, the number of uninsured Americans has risen from 39.8 million to 47 million in 2006, including 8.1 million children. According to the Commonwealth Fund, four out of 10 working-age Americans with moderate incomes went without health insurance during part of 2005. Closer to home, skyrocketing costs are slicing our health care benefits at the bargaining table.
Dream to Fable
In 2007, many American families teeter on a financial tightrope that has become so thin and high that one unexpected bill can cause them to lose their economic footing. For these families, the American dream has become a fable. Here’s why:
It costs more to stay healthy. In 2000, the average family paid $6,348 for health insurance. Today, that number has shot up to $11,480.
It’s more expensive to get around. Six years ago, the average worker with children spent just over $1,900 per year on gas. This year, that same worker can expect to spend $3,887.
It’s harder to own a home. To reach the dream of homeownership, many buyers have stretched their dollars through adjustable-rate mortgages and interest- only loans. As the rates on these mortgages have soared, the number of homeowners forced to sell or pushed into foreclosure has skyrocketed.
It’s more difficult to retire. In recent years, some companies have ruthlessly terminated or “frozen” their private-sector pension plans, leaving scores of workers with smaller pensions, or none at all. The attack is spreading to state and local governments as some try to replace traditional defined benefit plans — reliable pensions that pay retirees based on how much was put in — with 401(k)-type plans, which are subject to the ups and downs of the stock market, affecting how much a retiree can expect to get out.
It costs more to educate a child. When it comes to providing their children with an education at a public college, working families are squeezed by costs that have risen a wallet-busting 56 percent since the 2000-2001 school year.
Bush Tightens the Squeeze
Instead of addressing these challenges, Bush has pushed through policies that make things worse.
Amid soaring tuition, he has cut billions in funding from student loan programs. As gas prices soared, he dished out tax cuts to Big Oil. And he has made huge cuts in education, health, child care and other critical programs for working families while simultaneously pushing through tax cuts for the wealthy — worth $197 billion over 10 years.
Last fall, Bush made it more difficult for workers to organize when his hand-picked National Labor Relations Board ruled that employees who occasionally coordinate the work of others would be considered supervisors. This one misguided decision stripped organizing rights from some 8 million workers.
Planning to tighten the clamps on workers, Bush promised to veto the Employee Free Choice Act — a measure that would make it easier for the 60 million workers who say they would join a union to do so, without fear of employer harassment and intimidation.
Bringing it Home
Even with good union contracts, many members of AFSCME are finding it difficult to keep up, let alone get ahead. In a 2007 poll, one out of every two members says they earn just enough to get by. But polling tells only part of the story. What follows are the stories of three AFSCME members from Connecticut, New Jersey and Oregon. Together, they represent millions of Americans across the nation who are part of the struggling middle class. — Lisa Kelly
Not Much Left Over
Norwalk, CT
Surviving | Ed and Ann Cogswell review their finances to see if there’s money left to buy a new car.
Photo Credit: Andrew Lichtenstein
Ed Cogswell admits he and his wife, Ann, are not in dire straits and are probably better off than some of their neighbors. But even with an estimated joint income of $82,000 year, they also feel they’re not far from disaster.
“If something happens to me or my wife, neither of us would be able to survive on one salary,” says Ed, 55, the chef manager for the Brien McMahon High School and president of Local 1748, Council 4, representing cafeteria workers in the Norwalk Public Schools. Ann works as a subcontractor in the finance department of Stamford Hospital. “The cost of living has skyrocketed over the last few years, making it impossible to even set aside money for a rainy day,” adds Ed.
Although one child is out of college, the Cogswells are still paying $38,500 a year in tuition and fees for another daughter, a junior at Bryant University in Rhode Island. The rest of their paychecks go to a monthly mortgage of $1,300 on their 3-bedroom home, insurance, taxes and other basic expenses.
“It’s always a juggling act,” Ed explains. “I want to buy a new car to replace my 7-year-old Chevy, but we just can’t. We want to travel for vacation but we can only afford going to the movies.” Even with a recently negotiated union contract — which provides good wage increases and medical coverage — Ed and Ann are still worried about the future. Recently, they put their house up for sale, in part because they are concerned they will no longer be able to afford living in Norwalk — a city surrounded by some of the country’s most affluent suburbs.
“We seem to always be working but after paying all our bills, there’s not much left over,” Ed laments. — Jon Melegrito
Barely Getting By
Newark, NJ
Struggling | James Shaw, a hospital orderly, works hard to support his young family but feels like he’s falling behind.
Photo Credit: Christopher Barth
“If a person considers himself middle class, I figure he has to be financially stable,” says James Shaw, an orderly at Beth Israel Medical Center. “I’m living paycheck to paycheck.”
Shaw, 33, is a member of the National Union of Hospital and Health Care Employees (NUHHCE)/AFSCME District 1199J. Together, he and his wife Erika earn roughly $50,000 annually — a bit more than the nation’s median household income of $48,201. But it’s not enough to go around for the Shaws, who have two sons, ages 11 and one, and a third son born just weeks ago.
Overtime — when it comes — is a mixed blessing: It helps, but takes Shaw away from his kids. There’s still nothing left after paying bills that include monthly rent of $1,200 on their two-bedroom, single-bathroom house, plus $1,500 in annual medical deductibles. “Every dollar I make is accounted for in my family’s living expenses, especially in this high-cost city,” Shaw says. That includes the little extra he makes as a party disc jockey.
Three years ago, he returned his used car to the dealer because he couldn’t afford the $375-per-month payment, or the insurance. Now he gets to work on public transportation.
During the school year, Shaw wakes his 11-year-old at 5:30 a.m. The boy accompanies his dad to work and waits until his father takes his break and walks him to school. “I can’t afford to pay a baby sitter,” explains Shaw, who already spends $585 a month on day care for his 1-year-old.
Shaw doesn’t see a middle class anymore. “You’re either rich or poor,” he observes. Yet he refuses to surrender his dream of a better life for his family. “When,” he wonders, “do you get a chance to have your moment?” — Clyde Weiss
Still Scraping for Dollars
Portland, OR
Worried | DyLynn Robertson helps the youngest child under her care eat lunch.
Photo Credit: John Bauguess
As a childless couple in their forties, DyLynn and Richard Robertson are finding it harder to live on their joint annual income of $35,000. “We’re struggling a little bit more because we don’t get tax credits,” says DyLynn, a child care provider and a member of Child Care Providers Together/AFSCME Council 75. Her husband is a bicycle mechanic.
From their monthly pay, the Robertsons set aside $900 for their mortgage, $460 for liability insurance for her business and $270 for health insurance — with no dental coverage. “Because we each have a deductible of $5,000,” DyLynn explains, “we paid $7,000 out of pocket for medical treatments last year. It’s sad, but that’s all we talk about with friends these days — ailments and the high costs of health care.”
“We’re down to $45 in our savings and our checking account balance never exceeds $200,” DyLynn says. Without pension benefits and IRA accounts, the Robertsons worry about the future. “If we work till we’re 72, given what we earn, we’ll barely make $200 a month from Social Security.”
DyLynn is concerned that “as a middle class family, we’re not being rewarded financially enough for working hard. The policies of the Bush administration breed a lot of anger, fear and frustration.”
Still, she’s hopeful. “Our union recently negotiated a contract with huge increases in state subsidies for child care providers, the first in 12 years,” she says. “We will press for health insurance benefits in the next round.”
Unable to afford vacations, the Robertsons purchased a used sailboat, but it needs repairs. For now, the dreamboat is stuck in a marina along the Columbia River. “We’re still scraping for dollars to get our boat fixed,” DyLnn says. “Until then, we just sit on the dock and watch the other sailboats go by.” — Jon Melegrito
