I also like the way the Journal upholds journalistic convention and gamely tries to point out the other side of the story—that the middle class is better off in some ways, somehow. The reporters have to stretch, as we see:
In some ways, the American middle class is better off than it was eight years ago. It is paying less taxes, thanks to President Bush’s tax cuts. The effective federal tax rate for the middle fifth of households declined to 14.2% in 2005 from 16.6% in 2000, according to the Congressional Budget Office. The rate of violent crime in 2006 was lower than in 2000. Death rates for heart disease and stroke have declined by about 25%.
I can’t say that 2.4 percent tax cut did much for me, but, still, I give the paper credit for trying, as it also does in trotting out crime and health statistics, neither of which has anything to do with a story on incomes.
I like this good story, which was pegged to the Pennsylvania primaries, because it is not overly sophisticated and does not assume everyone knows all this, even though most business reporters probably do. Economic news in a general circulation newspaper isn’t always for sophisticates, is it? Even Bloomberg readers might find this useful.
I also believe that after a slow start, most business reporters are starting to understand not just that the middle class is under significant financial pressure and that it has been building for a while, but that it has reached critical levels in the past few years, even before the country began to tip into a recession.
This is not to say that the economic battering of the American middle class—a true scandal—has received anything near the attention commensurate with its importance. That’s for another post. But it is to acknowledge the sporadic good work that occasionally fights its way to prominence in the publications that purport to monitor the nation’s economic life. It is also to point the way forward for the fall campaign. As far as domestic issues go, this is the one.
Among the more valuable work:
Peter Gosselin, now a fellow at the Urban Institute, laid the foundation for much future reporting with his extensive probes for the Los Angeles Times on the fraying middle-class safety net.
The Journal’s David Wessel in April 2004 pointed out what kind of jobs are being created as a result of outsourcing and other trade-related phenomenon. He says jobs have been breaking down into two categories—the high-end stuff and this category:
One sort requires physical contact — nursing-home aides, janitors, gardeners, dentists. Foreign-born workers may do them, but they’ll have to move to the U.S. A 2000 survey found that the average starting salary of graduates of community-college dental-hygiene programs was $41,900.
A hot program at many community colleges these days is massage therapy .
The story points to where all this is heading:
One unpleasant possibility, acknowledged even by those firmly in the trade-is-good camp, is that jobs will proliferate at both ends of the barbell — and fewer in the middle. The result would be an ever-wider gap between well-paying jobs and poorly paid jobs.
Actually, I found this excellent point underplayed. It’s clear that this phenomenon is not only a possibility, but has been happening for a long time. Second, this “barbell” is going to be so lopsided—many people on one side; only a few on the other—that the image doesn’t work. “Giraffe,” or some such, might be the better.
A BusinessWeek report in 2006 reinforced the point, finding that the only sector that produced any net new jobs in the U.S. economy between 2001 and 2006 was health care. That’s nuts.
The Journal in 2004 documented the growing phenomenon of bankruptcy among the middle-aged and formerly middle class. (1)
The New York Times in 2005 told how strapped homeowners are draining their home equity lines to pay off credit card balances and other day-to-day expenses.
The Journal expanded on the point just this month with a piece that explains how strapped consumers are selling their life insurance policies at pennies on the dollar and finding other expensive, non-conventional methods of raising cash; they have already tapped out on credit cards, to the tune of nearly $1 trillion, up by a third in the five years ended in 2006. (For a review of the reporting on credit cards, buy a copy of the March/April issue of the print version of the Columbia Journalism Review, or, okay, just click here.)
The New York Times’s Louis Uchitelle last November documented the scrambles of the erstwhile middle-class of Newton, Iowa, following the closure of the Maytag plant there.