Mason, P., 2010. "America's new poor: The end of the middle-class dream". Available at: Link [Accessed October 14, 2010].

There are two things that struck me whilst reading this article.

  • The same pattern is visible around me. People conforming to a higher standard of living than what they really can afford. The flashy lifestyles are often maintained by credit. It took America 30 years to reach the state they are in. Our credit act might have protected a lot of people from following the same trend, but the root cause of the problem is still there. “Keeping up with the Joneses and following the Madison avenue lifestyle”.   There are of course major exceptions to this.   In most cases loosing your job is not something that people ask for.
  • The salary expectations of people. South Africans are pricing themselves out of the global market. Do a quick research on the salary expectations of South African jobs compared to similar jobs in Europe and the US. It is no surprise that some of our work is moving to lower cost centres in the world.


“The men clustered in the shade of trees, in the 32°C heat of a car park in Atlanta, form the lowest layer of America's so-called middle class. They stare, alert like greyhounds, at the vans leaving the hardware store. When one pulls up they rush, 15 or 20 together, to the driver's window to negotiate. The hired man leaps in with his bag of tools: he'll earn $10 an hour, cash, for basic building work.

Go to the pristine cul-de-sacs where this supposed middle class lives and you will find, every couple of streets, a lawn as high as a wheatfield, indicating a home that has been repossessed. Even the survivors hang on by a thread. Juan and Kenyoda Pullen have been renting here since their home was repossessed. Sometimes the rent does not get paid. When they lost their jobs -- as postman and bank clerk -- their combined income dropped from $75 000 to $14 000 a year.

 Do you still feel middle class, I ask them. They do, they say, "though we're not really certain what that means any more". America's "middle class" was always a construct of ideology, indeed the expression of a dream.

 Yet America's middle class is disappearing. A lifestyle sustained for 30 years by rising debt is dissolving as the credit dries up. And the question beyond the crisis is: can it ever come back?

 Figures released last month by the US Census Bureau show it will be hard. Middle incomes are lower, in real terms, than in 1999. The median income, stagnate for a decade, fell by 4,2% once the crisis hit. Since December 2007 more than six million Americans have been pushed below the official poverty line.

This sudden collapse in lifestyle will have economic and psychological impacts long after the crisis is over. Since the 1980s US growth has been driven by the spending power of the salaried workforce. In turn the consumer has been the dynamo of global growth.

 To get things back to the way they were the US has to find a way to create nine million jobs, plug the gap in disposable incomes and reopen the personal credit system to the millions excluded from it. Judged against that, the Obama fiscal stimulus has failed.

 Meanwhile, some states have begun a race to the bottom: slashing welfare, labour regulations and local taxes to attract investment. High-wage companies close and relocate to low-wage states, and foreign investment flows to the towns where labour costs are lowest.

In a free-market society the real middle class is always a minority: if your street has a gate and a security camera at the end of it then you are middle class. A real middle-class kid can afford a college education, not a web-based degree. The real middle-class family does not skip meals or find its cars trapped in the repair shop because of unpaid bills.

 And even in America, if you are standing in 32°C heat, jostling with 30 other guys for a few hours' work, it is the man in the station wagon curling his finger at you that is middle class -- not you.”          [56%]