We All Fall Down? America’s New Economic Reality

Stephen Franklin

Because eco­nom­ic reports can be con­fus­ing, let me sum­ma­rize where we stand today.

A very small num­ber – the very, very rich – are doing just fab­u­lous­ly. A big­ger num­ber – the well-to-do – have suf­fered their lumps, but most will prob­a­bly get by.

And then there’s every­one else. Not only aren’t they doing well — they haven’t suf­fered such finan­cial inse­cu­ri­ty for some time and a lot are hov­er­ing on the finan­cial edge. One out of five Amer­i­cans today has suf­fered a loss of one-fourth or more of their avail­able income, accord­ing to a recent study by the Rock­e­feller Foundation.

What makes this fig­ure all the more impor­tant is the depth of the finan­cial frailty that has been grow­ing steadi­ly and is like­ly to worsen.

Con­sid­er this: In 1985, 12.2 per­cent of Amer­i­cans faced an eco­nom­ic loss of 25 per­cent or more. This num­ber climbed to 17 per­cent by the ear­ly part of this decade and today it is pro­ject­ed at 25 per­cent, accord­ing to the report.

The three major forces tracked by this study are the ones that have plunged so many Amer­i­cans into real eco­nom­ic inse­cu­ri­ty, not just the fear that their eco­nom­ic demise is just around the cor­ner. These are a major loss of income, large out-of-pock­et med­ical expens­es and inad­e­quate finan­cial resources to deal with income loss­es and hefty med­ical bills.

Sound famil­iar? It should. As the authors of the report point out, a large num­ber of us have suf­fered steep eco­nom­ic loss­es. They explain:

More than 60 per­cent of the Amer­i­can pub­lic expe­ri­enced at least one drop of 25 per­cent or larg­er in their annu­al income over the decade end­ing in 2006. In short, eco­nom­ic inse­cu­ri­ty appears more the rule than the excep­tion in Amer­i­can life, and more so over time.

Some of us have suf­fered more.

At least 7 per­cent of Amer­i­cans lost half of their incomes by 2009. But one out of 10 blacks reached this heart­break­ing plateau a few years ear­li­er, accord­ing to the study. And black women, over­all, have endured greater eco­nom­ic inse­cu­ri­ty than black men.

So where do we stand?

The study, led by Yale polit­i­cal sci­en­tist Jacob Hack­er, sug­gests it may take six years or more for those of us who have suf­fered income-loss to finan­cial­ly recov­er.

The wide­spread loss of one’s finan­cial foot­ing may also be a rea­son for the cur­rent explo­sion of dis­trust in big gov­ern­ment. Amer­i­cans are not peo­ple who think in terms of class or broad social forces, so when some­thing goes wrong, we either blame our­selves or the gov­ern­ment. It looks like we are doing both this time.

So, too, there is a heap of jeal­ousy and fury aimed at those who have not suf­fered as much as the rest. And this could be one rea­son why folks want teach­ers and police and fire­fight­ers to give up the pay­check secu­ri­ty and finan­cial well-being that they have earned.

It seems that, all of sud­den, they deserve to take a dive like every­one else.

Stephen Franklin is a for­mer labor and work­place reporter for the Chica­go Tri­bune, was until recent­ly the eth­nic media project direc­tor with Pub­lic Nar­ra­tive in Chica­go. He is the author of Three Strikes: Labor’s Heart­land Loss­es and What They Mean for Work­ing Amer­i­cans (2002), and has report­ed through­out the Unit­ed States and the Mid­dle East.

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