By Kollengode S Venkataraman, Written October 2008
Many challenges are ahead of us in the US — an aging population with longer life span and insufficient resources to take care of itself in old age; economic problems triggered by recklessness at many levels; lack of discipline in personal spending; the rise in the cost of energy, healthcare, child-care, and education; piling budget and trade deficits; the high cost of ongoing Iraq war and maintaining our global military installations……
So, we expected candor from politicians this election year on their approaches to the challenges affecting all of us — How much it would cost us in terms of money and reduced services, and who is going to pay.
But what we heard from Senators Barack Obama and John McCain in their summer interactions with an evangelical minister in the Saddleback Church in California was not reassuring. One of the questions asked by the minister was the definition of middle class. Barack Obama’s definition: Around $250,000 annual household income. I was amused by Obama, answer. But Obama recognized that “someone has to pay” for all the collective commissions, omissions, and sins in managing the economy.
I was amused because I recalled reading that the median household income in the US was around $45,000/year. Median is the midpoint in any distribution. When we say the median age is 45 years, it means 50% of the population is under 45 years, and 50% is over 45 years of age.
But John McCain’s answer “Oh, maybe $5 million annual income?” was not only facetious, but also disingenuous and callous. Give him some slack though. He doesn’t even know how many homes he owns. Let us see some real numbers here:
- In the US Census Bureau’s income statistics for 2007 (see plots), only 4% of the US households are above Obama’s “Middle Class” making over $250,000 a year.
Both Obama and McCain were pandering to voters-McCain much more so than Obama. They don’t want their opponents to vilify them as the one starting the much-maligned Class War in the election year. But elections are about publicly discussing social and economic inequities. - The median household income in the US is $50,000/year. If $250,000 annual household income is “Middle Class” (Obama’s definition), families living on $80,000/year are Working Poor, and those under 150,000 would come under Lower Middle Class!
By McCain’s callous definition (income — not assets — of $5 million/ year), the entire US population excepting the ultrarich is way below McCain’s Middle Class. Families making $250,000/year can call themselves poor!
Granted, the higher-income families’ “middle class” comfort depends on their well-paying jobs. When they lose jobs in an economic downturn, corporate restructuring, or serious sickness, they are in free fall from Middle Class to the indigent! Even as the “middle class” is enjoying all creature comforts, it also lives in a perpetually nagging anxiety of losing them. Have you considered how low-income families manage?
How are we, as a nation, going to wriggle out of the challenges ahead if the better-educated have such a skewed view of themselves in their access to resources and wealth? Who are they kidding when presidential candidates portray the affluent as “Middle Class”?
Inequality is, of course, the law of nature. However, as the great ethical teachers of the world through the ages stressed, those endowed with better talent and intelligence, or who have acquired more power and wealth, have an obligation towards others who don’t. And precisely because of the inequities, proportionally more is expected of the affluent in sharing the burden of maintaining societal decency.
We are unlikely to wriggle out of these multifaceted financial burdens, some of them entirely man-made, simply by economic growth or innovative technologies alone. We need to redefine the role of government (the supposedly “fiscally conservative” George W. Bush already showed the way by bailing out Fannie Mae and Freddie Mac with $200 billion tax money, the biggest ever bailout) and the value of personal prosperity in the midst of increasing inequities bordering on poverty all around us.
Obviously, more will be expected from those who have much more to spare, including from the loosely defined “Middle Class.” END.