Have we fallen behind our parents?

Author Nan Mooney argues that the middle class is slipping, and fixing it is going to take more than cutting out lattes.

By Katharine Mieszkowski

Read more: Insurance, Economy, Katharine Mieszkowski, Life, Salon Conversations

May 14, 2008 |

It's a good time to be rich. Not since the Roaring Twenties has there been a period of such extreme income inequality in the United States, with just the top 1 percent of earners now hogging more than 20 percent of the nation's annual income. Should this grossly unjust state of affairs ever make the filthy rich feel dirty, well, they can now wash that feeling away in a $100,000 shower.

But while the rich clean up, Nan Mooney, a 38-year-old journalist, wonders why so many people like her -- college-educated professionals, members of the storied American middle class -- still struggle to make it financially, well into their 30s and 40s and beyond, unable to pay off their student loans while trying to cover healthcare costs, save for their children's education and plan for their own retirement. In her new book, "(Not) Keeping Up With Our Parents: The Decline of the Professional Middle Class," Mooney argues that what it really means to be middle-class in America is suffering a rude downgrade, as college costs rise and wages stagnate at the same time that individuals must shoulder more healthcare and retirement expenses.

For her book, Mooney interviewed more than 100 social workers, product managers, college administrators, factory-equipment salesmen and other members of the middle class about what their intimate financial lives really look like. Most of them earned between $30,000 and $70,000 a year, yet despite good educations and respectable incomes, many still shouldered crushing debts and had serious doubts about their financial futures. They all aspire to basic comforts -- a place to live, reliable healthcare, education for themselves and their children -- but come across as a little bewildered by their seemingly perpetual state of financial insecurity. "As you get older, it becomes less okay to admit that you're struggling," one 42-year-old graphic designer tells Mooney. "People just assume that you must be doing okay. I've noticed that those who are still having trouble start to go underground about their financial lives."

Salon spoke with Mooney, who is also the mother of a 4-and-a-half-month-old son, from her home office in Seattle.

How would you characterize the educated middle-class professional you're writing about?

These are people who went to college and have at least a four-year degree. Oftentimes, they have extended education beyond that, a master's or a Ph.D. They're people who work in white-collar professions, usually not the high-end professions like law or medicine or finance.

Why did you want to write about this group?

Because I fall into this group and so many people I know fall into this group, and I feel like we fall under the umbrella of having done everything they say you're supposed to do to be financially secure in America.

There is this myth that if everyone could just go to college and get the proper job skills we would all be financially comfortable, and I was looking around me and saying, "Well, that's not true."

But if you have a college education you're more likely to be financially secure than if you have only a high school education.

Yes, absolutely. But the rhetoric goes beyond that. It says that you will be secure, and you will be comfortable. If you look at the rates of bankruptcies of people who are getting in deep credit-card debt, it's not only the people with the high-school educations. It's traveled well into what we consider the professional middle class.

How has college debt risen for this group in a generation?

In the '70s, we were barely taking out student loans. In 1977, collectively students were borrowing about $6 billion. By now, they're borrowing over $85 billion. That's a remarkable number. The number of students enrolled in college grew 44 percent between 1977 and 2003, but student loan volume rose 833 percent in that same time period.

There are fewer grants and scholarships available. If students go through graduate school, they can end up taking out over $100,000 of student loans. And if you go into a field that's not high-paying that can be a real burden on you for 20, 30, 40 years.

We are seeing more people going to college, which is definitely a positive move, but they're getting into a lot of debt to do it. The college degree now is what the high school degree used to be. You really need a basic bachelor's degree in order to be eligible for a lot of jobs.

How has the burden of healthcare cost shifted in the last generation?

Healthcare costs have shot up. Because of that, businesses, especially smaller employers, are having trouble offering healthcare to their employees, which means more of it is coming out of pocket. More people are having to stretch financially to afford healthcare, and it also means that more people don't have health insurance because they simply can't afford it.

And even people who are insured are paying much higher fees than they used to be.

Exactly. There are a lot of middlemen involved. You have insurance agents. You have companies making decisions about what kind of healthcare you get. You're not just paying the doctor. You're not just paying the hospital. You're paying a series of middlemen. You're paying all the people with the insurance companies who are facilitating this. It's not an efficient system anymore. And I think that's why it's become such a political hot spot.

How has the burden of affording retirement shifted onto workers?

It's taken a similar shift that healthcare has taken. It's become more the responsibility of the individuals and less the responsibility of the institution, whether you're talking about the state or the country or the employer. We are all very familiar with the 401K, because most of us, if we have any sort of retirement plan, that's what we have. A 401K is giving us a tax-free shelter. Although some employers offer matching contributions, it's basically saying that we have to pay for our own retirement. The company pension plan that was much more common 20, 30, certainly 50 years ago, was where the company put in money and took care of you during retirement, and that is no longer the case.

And it's scary, because retirement tends to go to the bottom of the pile, because you don't need retirement now. You need childcare, housing and healthcare now. But with retirement, we think: "OK, that can wait, and maybe I'll just work until I'm 90, because I don't know when I'll have enough money to be able to afford to stash something away to retire."

Next page: "There is this mythology that it's the individual's fault, because America is the country of individualism"