Struggling to Make Ends Meet During the Bush Republican Economy: A Profile of a Middle-Class Family

• "Lee" is a common surname that is not easily categorized. In addition to having English and Irish Gaelic origins, "Lee" is also the Americanized spelling of a name found in the Norwegian, Chinese, and Korean languages. (Dictionary of American Family Names, Oxford University Press, available here)

• According to Social Security Administration Popular Baby Name records, "Michael" was the number one male birth name each year from 1961 through 1998, after which it slipped into second place where it remains today. (Social Security Administration, Popular Baby Names, updated May 11, 2007, available here)
  
  While it has steadily declined in popularity, during the 1960s, "Lisa" was the most popular female birth names. (Social Security Administration, Popular Baby Names by Decade, available here)
  
  Ty" is a shortened version of Tyler, Tyrone, Ti, Tyson, Tyrell, and many more. (Behind the Name, available here)

• The average age of respondents to the 2000 Consumer Expenditure Survey (CES) in the 40,000-49,999 income group was 44.7 years. (U.S. Department of Labor, Bureau of Labor Statistics Consumer Expenditures in 2000, available here)

• There were 1.5 earners contributing to households in the $40,000-49,999 income group, according to 2000 CES data. (U.S. Department of Labor, Bureau of Labor Statistics Consumer Expenditures in 2000, available here)

• The median household income in 2000 was $41,990 (in current dollars). (U.S. Census Bureau, Incomes, Table H-8: Median Household Income by State: 1984 to 2006, available here)

• For men, the most common occupation is "management occupations" with "construction and extraction occupation" as a close second.
  (Bureau of Labor Statistics, Characteristics of the Employed, Table A-19: Employed Persons by Occupation, Sex, and Age, available here)
  
  Carpentry is the most common construction occupation. (Bureau of Labor Statistics, Occupational Outlook Handbook: Carpenters, available here)
  
  In the early 1980s, 35 percent of the vocational degrees awarded were in business and commerce technologies. (The Current Status of the Associate Degree (August 1985), available here)

• For women, the most common occupation is "office and administrative support occupations" (Bureau of Labor Statistics, Characteristics of the Employed, Table A-19: Employed Persons by Occupation, Sex, and Age, available here)
  
  In the early 1980s, nearly half of the female high school graduates had completed at least one year of college. (National Center for Education Statistics, "Findings from the Condition of Education 1995: The Educational Progress of Women," p. 11, (November 1995), available here)

• For information on retirement security,see, e.g. David Braze, "The New Face of Retirement," (November 20, 2000), available here; Ellen Hoffman, "When You Think about Taxes, Think about Retirement, Too," Business Week (April 21, 2000), available here.

• The majority (67 percent) of 2000 CES respondents in the $40,000-49,999 income group were homeowners. (U.S. Department of Labor, Bureau of Labor Statistics Consumer Expenditures in 2000, available here.)

• For information on college financing, see, e.g. College Board, Federal PLUS Loans for Parents, available here.

• In the 1999-2000 academic year, the average federal grant for dependent students from families with incomes between $40,000-59,999 per year was $1,306.
  (2003 Digest of Education Statistics, Table 320 Average amount of financial aid awarded to full-time, full-year students, by type and source of aid and selected student characteristics: 1999-2000, available here.)

• For college cost data, see The College Board, Trends in College Pricing 2007, available here.

U.S. Department of Labor, U.S. Bureau of Labor Statistics, Consumer Expenditures in 2000, Report 958 (April 2002), available here.

Income is based on the Census Bureau's findings for the median household income in 2000. (U.S. Census Bureau, Incomes, Table H-8: Median Household Income by State: 1984 to 2006, available here)

Consumer Expenditures are, accordingly, based on households with income before taxes between 40,000 to 49,999.

Because mortgage payments are considered a savings by the Bureau, the line item for "Housing" does not include mortgage payments. The Census data includes subsets of shelter for owned dwellings, rental dwellings and lodging out of town. Each of these subcategories is rolled up into one "housing" category for the purposes of this writing. This category includes: mortgage interest, property taxes and insurance, refinancing and prepayment charges, ground rent, expenses for property management and security, homeowners' and fire insurance, expenses for repairs and maintenance contracted out, and expenses of materials for owner-performed repairs and maintenance.

• "Clothing" is comprised of the line items for "apparel" and "services."
• "Transportation" represents the CE line items for vehicle purchases, gasoline and motor oil, other vehicle expenses, and public transportation.
• "Charitable donations" is comprised of the CE Category for "cash contributions."

• See, e.g. David Kiley, "Big Three roll out more incentives, 0 percent financing," USA Today (July 3, 2002).

• "In the 18 weeks following September 11, employers reported 430 events involving 125,637 workers separated as a direct or indirect effect of the attacks. A majority of the layoff events took place in the weeks immediately following the attacks, and the number of new events had tapered off by March of 2002."
  
  (U.S. Department of Labor, Bureau of Labor Statistics, "Impact of the Events of September 11, 2001, on the Mass Layoff Statistics Data Series," available here)

• From 2001 to 2002, 93,000 construction jobs were dropped from construction payrolls, a 1.4 percent reduction.
  
  (U.S. Department of Labor, Monthly Labor Review, "U.S. Labor market in 2002: Continued Weakness, (February 2003), available here. See also Bureau of Labor Statistics, "Payroll Employment in 2007," (March 2008), available here)

• Under Bush-McCain Republicans, the number of uninsured Americans has increased substantially from 39.8 million in 2000 to a then record high of 44.8 million in 2005.
  
  (U.S. Census Bureau, 2005 and 2006 Current Population Survey (CPS) Annual Social and Economic Supplement (August 2007), Figure 7, (revised March 23, 2007) available here (see U.S. Census Bureau, Census Bureau Revises 2004 and 2005 Health Insurance Coverage Estimates (March 23, 2007), Table A1, available here; U.S. Census Bureau, Health Insurance Coverage: 2001, Table B.3, available here)

• Consumers spent 7.7 percent more for healthcare expenditures in 2002 in a third straight year of increases. During all three years, the increase was due primarily to large increases in health insurance and drugs.
  (U.S. Department of Labor, Bureau of Labor Statistics, Consumer Expenditures in 2002, available here)

• According to a study by the Kaiser Family Foundation, the average employer-sponsored health insurance plan costs $7,954 in 2002 for family coverage, with employees paying $2,084 of the bill and the employers picking up the remaining $5,870 of the tab.
  (Kimberly Lankford, "Alternatives to COBRA Coverage," Kiplinger.com (October 18, 2002), available here)

• Many people are unfamiliar with the individual health insurance market because most Americans' health coverage is accessed either through their jobs or from a public program. In 2002, about 6.6 percent of the non-elderly population (16.5 million people) purchased individual health insurance, compared with 65.0 percent (163.7 million people) covered by employer-based health insurance and 16.2 percent (40.8 million people) covered by Medicaid or other public coverage. Another 43.3 million non-elderly Americans lacked health insurance for the entire year.
  (Kaiser Family Foundation, "Update on Individual Health Insurance," (August 2004), available here. See also AHIP Center for Policy and Research, "Individual Health Insurance 2006-2007: A Comprehensive Survey of Premiums, Availability, and Benefits," (December 2007), available here)

• For information on COBRA, see U.S. Labor Department, Bureau of Labor Statistics, "Frequently Asked Questions: COBRA Continuation Health Coverage," available here.

• In 2002, the number of unemployed rose to 8.4 million people. Due to rising unemployment rates and little growth in employment, those who were unemployed tended to stay without a job longer. (U.S. Department of Labor, Monthly Labor Review, U.S. Labor market in 2002: Continued Weakness, available here)
  
  
• In the fourth quarter of 2002 the average duration of unemployment rose by 3.9 weeks to 17.9 weeks. (U.S. Department of Labor, Monthly Labor Review, U.S. Labor market in 2002: Continued Weakness, available here) In 2002, the number of people unemployed for 27 weeks or more increased by 705,000. (U.S. Department of Labor, Monthly Labor Review, U.S. Labor market in 2002: Continued Weakness, available here).
  
  
• While the construction industry saw an overall increase in job creation from 2000-2005, the rise was in lower paying jobs. There was a corresponding decline in the creation of higher paying jobs. Bureau of Labor Statistics, Monthly Labor Review, December 2006, Table 2, available here. While average weekly hours worked saw an overall decline during the 2001 recession, the construction industry was not hit as hard. U.S. Department of Labor, Monthly Labor Review, "U.S. Labor market in 2002: Continued Weakness," available here.
  
  

• Under Bush-McCain Republican policies, union membership has dropped. The percent of workers belonging to a union declined by three percentage points between 1995 and 2006. (AFL-CIO, Trends in Union Membership, available here)

• Under Bush-McCain Republicans, the number of long-term unemployed has increased by 61 percent. (U.S. Department of Labor, Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, Table A-7, available here)

• Under Bush-McCain Republican policies, the cost of a standard middle-class life has outpaced incomes. "The cost of a standard middle-class life--a home, healthcare, a college education--has soared...outpacing incomes. It is becoming increasingly difficult for Americans to enter and remain in the middle class."
  (Jennifer Wheary, Thomas Shapiro, Tamara Draut, "By a Thread: The New Experience of America's Middle Class," Demos and the Institute for Assets and Social Policy, Brandeis University (November 27, 2007), available here)

• The Congressional Research Service reports that most studies find the wages of union workers are 10 percent to 30 percent higher than the wages of non-union workers, after controlling for individual, job, and labor market characteristics. Union membership has been declining steadily in the U.S. for several decades.
  (Congressional Research Service, "Union Membership Trends in the United States," (August 31, 2004), available here)

• According to the Bureau of Labor Statistics, in March 2007, 78 percent of union workers in the private sector had jobs with employer-provided health insurance, compared with only 49 percent of nonunion workers. Union workers also are more likely to have retirement and short-term disability benefits - 81 percent of union workers participate in pension plans versus 47 percent of nonunion workers. Sixty-seven percent of union workers participate in defined-benefit pension plans, compared with 15 percent of nonunion workers.
  (AFL-CIO, "The Union Difference," available here)

• A recent study found that in 1987, a family health insurance policy claimed 8 percent of median family income; today it takes 20 percent, and it will require even more tomorrow. If health insurance does not become more affordable, a majority of working class Americans will be uninsured by 2020.
  (New America Foundation, July 2007)

• Education showed the largest percentage increase of all categories in the Consumer Expenditure Survey for 2002. (U.S. Department of Labor, Bureau of Labor Statistics, Consumer Expenditures in 2002, available here)

• "Seventy-four percent of undergraduates reported using credit cards for school supplies (paper, notebooks, etc.), the number one reported use of cards; the second most common usage of credit cards reported by undergraduates was a tie between textbooks and food, with 71 percent reporting these as charged expenses. Slightly less than 24 percent reported using credit cards for tuition." (Nellie Mae, "Undergraduate Students and Credit Cards in 2004," (May 2005) available here)

• "[In 2001] 83 percent of undergraduate students attending four-year institutions (age 18���24) [had] at least one credit card. This is up from 67 percent of undergraduates holding a card in 1998, and 78 percent in 2000. Furthermore, 47 percent of students with credit cards have four or more cards, up from 27 percent in 1998 and 32 percent in 2000. More undergraduate students have cards, and more of them appear to be using their cards regularly. The median credit card debt, which remained fairly steady between 1998 and 2000, increased by a startling 43 percent in 2001 ($1,236 to $1,770). This indicates that the 50 percent of students in the sample who carry the lowest balances have increased the debt level substantially." Nellie Mae, "Educating Undergraduates on Using Credits Cards", available here.

• According to Nellie Mae, 34 percent of student surveyed work 10-20 hours per week during the school year and 30.5 percent work more than 20 hours during the school year. "We should be concerned about these students who appear not to have a sound financial footing--highest average balances and the highest levels of anxiety about making payments. They are likely distracted from their studies and, in fact, could be creating for themselves a cycle of anxiety related to balancing school and work: facing expenses, charging expenses, then working to pay the credit card bills". Nellie Mae, "Undergraduate Students and Credit Cards in 2004" (May 2005) available here.

• "With house price appreciation at its strongest since 1979, the amount of equity that homeowners cashed out in 2004 nearly rivaled the record level set in 2003 despite a sharp retreat in refinancing. For the fourth consecutive year, the wealth effects from rising home prices generated about a third of the growth in consumer spending." (Joint Center for Housing Studies at Harvard, "The State of the Nation's Housing 2005," p. 5, (2005), available here. See also Center for Responsible Lending, "Predatory Mortgage Lending Robs Homeowners and Devastates Communities," (2005),available here)

• The 30-year conventional fixed mortgage rate dropped to a historic low in June of 2003, while re-financing rose sharply in the second quarter of 2003. (Bureau of Labor Statistics, Monthly Labor Review, A Visual Essay: Post-Recessionary Employment Growth Related to the Housing Market, (October 2006), available here)

• Credit cards offer a glimpse at the costs imposed by a rapidly growing credit industry. In 2006, for example, Americans turned over $89 billion in fees, interest payments, added costs on purchases, and other charges associated with their credit cards. That is $89 billion out of the pockets of ordinary middle-class families, people with jobs, kids in school, and groceries to buy. That is also $89 billion that didn't go to new cars, new shoes, or any other goods or services. To be sure, the money kept plenty of bank employees working full time, and it helped make debt collection one of the fastest-growing occupations in the economy."
  (Elizabeth Warren, "Making Credit Safer," Harvard Magazine (May-June 2008))

• "Last year, banks, thrifts and credit unions collected a record $37.8 billion in service charges on accounts, more than double what they got in 1994, according to the Federal Deposit Insurance Corp. and the National Credit Union Administration. These fees provide a more stable source of income to banks than products tied to fluctuating interest rates. Bounced-check and ATM fees are setting records. Consumers are paying higher service charges for checking accounts. Banks are requiring higher balances on interest-bearing accounts, Bankrate.com says. And banks that issue credit cards are increasing fees for late payments and over-the-limit charges to as much as $39 per violation. Make this mistake once or twice, and your interest rate could hit 30 percent."
  (Kathy Chu, "Rising bank fees hit consumers," USA Today (October 4, 2005), available here.

• For information on Pay Day check cashing companies, see e.g. Center for Responsible Lending, "Payday Lending," available here.

• The Consumer Expenditure Survey documented a 6.3 percent increase in overall expenditures in 2004, marking the largest change in several years. (U.S. Department of Labor, Bureau of Labor Statistics, "Consumer Expenditures in 2004" (April 2006) available here.

• Spending on healthcare in 2004 rose 6.5 percent following a 2.8 percent increase in 2003, a 7.7 percent increase in 2002, and a 5.6 percent increase in 2001.
  (U.S. Department of Labor, Bureau of Labor Statistics, "Consumer Expenditures in 2004" (April 2006) available here.

• Health insurance premiums comprised 51.7 percent of total healthcare costs in 2004, rising 6.4 percent over the previous year. Health insurance expenditures have been rising steadily at statistically significant increments of 7.2 percent in 2003, 10.1 percent in 2002, and 7.9 percent in 2001. (U.S. Department of Labor, Bureau of Labor Statistics, "Consumer Expenditures in 2004" (April 2006), available here.

• For information on college cost increases, see The College Board, Trends in College Pricing 2007, Figure 3, available here. See also Democratic Policy Committee, "The College Cost Crunch: A State-by-State Analysis of Rising Tuition and Student Debt," (June 2006), available here.

• While certain plans and certain employers may allow loans that use 401(k) plan assets as collateral, the IRS does not allow early withdrawals from a 401(k) plan to pay for college expenses.
  (Internal Revenue Service, "Topic 558 - Tax on Early Distributions from Retirement Plans, available here; "Paying for College: Other IRAs & 401(k) Plans," available here.

• Of the 1,400,000 bachelor's degrees conferred in 2003���04, the largest numbers of degrees were conferred in the field of business (307,000). (U.S. Department of Education, Institute of Education Sciences, Fast Facts: Most Popular Majors, available here)

• Under Bush-McCain Republican policies, young people feel that their generation is falling behind. A poll surveying 17-29 year-olds found that 48 percent of young people believe that their generation will be worse off than their parents' generation.
  (CBS News/MTV/New York Times Poll, released June 26, 2007)

• A recent study by the Brookings Institution found that two-thirds of American workers believe it is harder to achieve the American Dream than it was for their parents, and it will be harder for the next generation. Only 15 percent of those surveyed believe the next generation will be better off.
  (Brookings Institution, "Economic Anxiety and the American Dream," (July 13, 2007)

• A 2005 poll asked When your children are the age you are now, do you think their standard of living will be much better, somewhat better, about the same, somewhat worse, or much worse than yours is now?" 56 percent of the respondents believed that their children would do "much better" or "somewhat better," compared to 18 percent who believed that their children would do the "same" and 22 percent who believed that their children would do "somewhat worse" or "much worse." (New York Times/CBS News Poll, (March 13, 2005), available here)

• The New York Times observed that "a college degree does not ensure a bigger share of the economic pie for many graduates."
  (Editorial, "Economic Life after College," New York Times (June 11, 2007))

• The Los Angeles Times has reported that: "[w]age stagnation, long the bane of blue-collar workers, is now hitting people with bachelor's degrees for the first time in 30 years.  Earnings for workers with four-year degrees fell 5.2 percent from 2000 to 2004 when adjusted for inflation, according to White House economists...Not since the 1970s have workers with bachelor's degrees seen a prolonged slump in earnings during a time of economic growth...trends for people with master's and other advanced degrees...have found that their inflation-adjusted wages were essentially flat between 2000 and 2004."
  (Molly Hennessy-Fiske, "That Raise Might Take 4 Years to Earn as Well: Those with Bachelor's Degrees Are Finding Their Incomes Stagnate Despite A Growing Economy," Los Angeles Times, p. A1 (July 24, 2006))

• Housing expenditures rose 9 percent in 2005, the largest increase in several years.
  (U.S. Department of Labor, Bureau of Labor Statistics, "Consumer Expenditures in 2005," (February 2007), available here)

• "A prominent housing study estimated that each foreclosure results in a 0.9 percent decline in nearby property values. For a city block with ten foreclosures, this implies that neighboring homes would lose 10 percent in value. The impact is even higher in lower-income communities."
  (Joint Economic Committee, Sheltering Neighborhoods from the Subprime Foreclosure Storm" (June 22, 2007), citing Dan Immergluck and Geoff Smith, "The External Costs of Foreclosure: the Impact of Single-Family Mortgage Foreclosures on Property Values," Housing Policy Debate, Vol. 7, Issue 1, 2006)

• Subprime mortgages have higher default risk. "The Mortgage Bankers Association reports that the share of subprime loans that are 90-days delinquent or in foreclosure is running near 3.8 percent, compared with a prime loan share of just 0.5 percent."
  (Joint Center for Housing Studies at Harvard, The State of the Nation's Housing 2005 at 18, available here)

• According to the Mortgage Bankers Association, delinquent payments on subprime ARM loans increased 31 basis points over the course of 2005.
  (Mortgage Bankers Association, National Delinquency Survey, Fourth Quarter 2006 (March 13, 2007) at 11)

• Source: U.S. Department of Labor, U.S. Bureau of Labor Statistics, Consumer Expenditures in 2000, Report 958 (April 2002) and Consumer Expenditures in 2006 (October 2007), available here.

• While average health care spending (which includes those without health insurance) during this period increased by $72, the cost of family health insurance for those who do have health insurance skyrocketed 87 percent since 2000. The average premium for a family of four escalated to $11,480 in 2006, with the average family contribution of almost $3,000. From 2000 to 2006, the amount families pay out of pocket for their share of premiums has increased by approximately $1,300 dollars. (Kaiser Commission on Medicaid and the Uninsured, 2007; Kaiser Family Foundation and the Health Research and Education Trust, 2006 Employer Health Benefits Survey.)

• Basic food prices have risen by the largest amount in 17 years. "Consumer price for staples, such as milk, bread and eggs, rose by the largest amount in 17 years"
  (Reuters, January 16, 2008)
  
  An analysis of government data by The Washington Post found that prices have risen 9.2 percent since 2006 for groceries, gasoline, health care and other basics that a middle-income American family has little choice but to consume. That would cost such a family, which made $45,000 on average in 2006, an extra $952 per year, assuming it did not buy less of such items because of higher prices.
  (Washington Post, March 21, 2008)

• The Consumer Expenditures Report for 2006 was released on October 26, 2007.  Average annual expenditures per consumer unit, which is similar to a household, rose 4.3 percent in 2006, following an increase of 6.9 percent in 2005, according to results from the Consumer Expenditure Survey released by the Bureau of Labor Statistics of the U.S. Department of Labor. The increase in expenditures from 2005 to 2006 was larger than the 3.2 percent rise in the annual average Consumer Price Index (CPI-U) over this period.
  
  Increases in spending on housing (7.9 percent), the largest component of spending, and on food (3.0 percent), contributed to the overall increase in 2006. Among the other major components, spending increased for healthcare (3.8 percent), transportation (2.0 percent), and personal insurance and pensions (1.3 percent), while spending decreased for apparel and services (-0.6 percent) and entertainment (-0.5 percent). (U.S. Department of Labor, Bureau of Labor Statistics, Consumer Expenditures in 2006 (October 26, 2007), available here)
  
  Consumer Price Index data ("Costs") drawn from the "Economic Report of the President" (February 2007), Table B-60 at 299-301, available here

• An analysis of the new Consumer Expenditures report concluded that "consumers respond to permanent changes in income from gasoline prices by substituting towards lower-cost food at the grocery store and lower priced items within grocery category."
  
  Specifically:  "[C]onsumers re-allocate their expenditures across and within food-consumption categories in order to offset necessary increases in gasoline expenditures when gasoline prices rise...[G]asoline expenditures rise one-for-one with gasoline prices, consumers substitute away from food-away-from-home and towards groceries in order to partially offset their increased expenditures on gasoline, and that within grocery category, consumers substitute away from regular shelf-price products and towards promotional items in order to save money on overall grocery expenditures."  (Dora Gicheva, Justine Hastings, Sofia Villas-Boas, "Revisiting the Income Effect: Gasoline Prices and Grocery Purchases," National Bureau of Economic Research, Working Paper 13614 (November 2007) at 2, available here)
  
  "As many drivers struggle to cope with soaring fuel prices, working-class people like Ms. Lopez who commute long distances to their jobs are suffering the most..... Ms. Lopez looks for weekly specials at the supermarket. Salmon, her favorite fish is $7 a pound these days. So she buys the tilapia for $2.99 instead."  ("Full Tanks Put Squeeze on Working Class," New York Times (May 13, 2006))