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.

In These Times August 2022 Cover
Subscribe and Save 66%

Less than $1.67 an issue