Our guest blogger is Amanda Logan, a Research Associate at the Center for American Progress.
Last month, Sen. John McCain’s (R-AZ) economic adviser Phil Gramm accused America of being “nation of whiners.” But Americans aren’t whining, we’re hurting.
Inflation hit a 17-year high last month, and home foreclosure filings increased 55% in the past year. As my co-author Christian Weller and I determined in our recent report, not only are America’s middle-class families financially stressed today, they’ve been increasingly struggling since early 2001.
Battered by inflation: The price of seemingly everything is increasing, but wages aren’t keeping up. After inflation, weekly wages were 0.3% lower in June 2008 than they were in March 2001. But the price of food is up 25% over the same period, transportation by 36%, fuels and utilities by 53%, and college tuition — the key to the middle class — by 68%. As Harvard law professor and economic security expert Elizabeth Warren recently stated, “there have never been since the Depression so many families standing right on the edge.”
Squeezed by medical costs: In 2007, only 34% of families had enough money to cover the cost of a medical emergency, down from 43.7% in 2000. The share of private sector workers with employer-sponsored health insurance dropped from 64% in 2000 to 60% in 2006, while the costs associated with medical care increased 35% from March 2001 to July 2008.
Drowning in debt: Only 29% of families could withstand an unspecified emergency equal to three months of income, down from 39% in 2000. Household debt averaged 130% of disposable income in the first quarter of 2008, higher than any point prior to the first quarter of 2007. Additionally, the total value of all homes fell by 2.5%, or $417 billion, in the first quarter of 2007 — the largest drop since the second quarter of 1974.
Threatened by unemployment: According to our estimates, only 44% of families had enough wealth to withstand a spell of unemployment, down from 51.0% in 2000. 2008 has already proven to be a difficult year for the labor market, with the economy losing a total of 463,000 jobs since the beginning of the year and the unemployment rate hitting 5.7% in July — the highest level since March 2004.
As Election Day approaches and Americans’ budgets continue to belly flop, we’re sure to hear non-stop economy talk. On Friday, I’ll add to the dialogue by joining Isaiah J. Poole, who contributes to the Campaign for America’s Future Blog for Our Future, for this week’s edition of Meet the Bloggers, Brave New Foundation’s live online video show. Following a live interview with Senator Bernie Sanders (D-VT), my fellow panelists and I will discuss the state of the economy and what it means for average Americans.