July 28, 2013

David Rohde: No denying struggles of middle class

Over the past 20 years, two middle-class American families -- the Stanleys and the Neumanns -- have done all the right things. Milwaukee natives, they worked hard, learned news skills, and tried to show their children that strivers would be rewarded.

But their lives -- as captured in an extraordinary "Frontline" documentary -- are an American calamity. Followed by filmmakers for two decades, they move from dead-end job to dead-end job, one of the couples divorces, and most of their children spiral downward economically, not up.

The Stanleys and the Neumanns are a microcosm of the middle class that President Barack Obama -- and House Republicans -- will spar over for the remainder of Obama's presidency. And they are part of a global trend. Across industrialized nations, income inequality is growing, and people like the Stanleys and Neumanns are the losers.

"Mobility is a two-edged sword," said Miles Corak, an economist at the University of Ottawa who has studied income inequality across countries. "And you're looking at the other edge of the sword."

At the very top, life is getting sweeter. As my colleague Chrystia Freeland noted last month, the global "winner-take-all economy" is intensifying.

A June study found that the number of people worldwide with more than $1 million to invest soared to a record 12 million in 2012, a 9.2 percent increase over the previous year. The number of ultra rich -- the 111,000 people with investable assets of at least $30 million -- surged 11 percent.

The Stanleys and the Neumanns, meanwhile, are falling behind. Whatever your politics, please watch this remarkable film. These two families, one black and one white, put a human face on the polarized American debate about what is happening to the American middle class.

Conservative viewers may feel that the two couples made mistakes -- failing to go to college, for example, or not moving out of a dying industrial town like Milwaukee. Liberal viewers may see them as victims of a globalized economy that rewards the few spectacularly and pays little to the rest.

Whatever the cause, their spiral is startling.

When filmmakers Bill Moyers, Kathleen Hughes and Tom Casciato first visited them in 1991, each father's wages as a unionized factory worker was enough to support his family. Over the 1990s, however, as Milwaukee factories moved overseas, both men lost their jobs. They took lower-paying work and, to makes ends meet, both wives also had to enter the workforce.

Throughout the 2000s, the couples struggled on. Claude Stanley, the Stanley patriarch, worked construction, started his own home inspection business and became a minister. By 2012, an illness had saddled him with enormous medical bills, his business had failed, and he was a 59-year-old sanitation worker making $26,000 a year.

His wife, Jackie, became a Realtor, but never gained a foothold in a declining housing market. Only one of their five children went to college, paying tuition with credit cards.

Tony Neumann, the Neumann patriarch, took a low-paying overnight factory job, and rarely saw his wife and three children. His wife, Terry, worked as a security guard, forklift operator and home health care attendant. By 2012, the couple, high school sweethearts, had divorced and lost their home through foreclosure.

The children in both families fared even worse. Only one child in each family attended some college, and they both had steady work. The other six children in the two families had low-paying jobs or no work.

Many also had failed relationships. As of 2012, one Neumann son was a high school dropout who had fathered two children with two different women. The other was unemployed and had fathered three children with three different women.

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