1 00:00:02,240 --> 00:00:05,440 Speaker 1: From Bloomberg News and I Heart Radio. It's the Big Take. 2 00:00:05,720 --> 00:00:09,760 Speaker 1: I'm West Gasova. Each weekday we dig into one important 3 00:00:09,760 --> 00:00:14,280 Speaker 1: story and on today's show are very first the American 4 00:00:14,320 --> 00:00:18,720 Speaker 1: middle class. On paper, they're actually doing just fine. So 5 00:00:18,840 --> 00:00:24,480 Speaker 1: why are they so worried? Do you know how long 6 00:00:24,480 --> 00:00:26,640 Speaker 1: it takes a working mound to say five thousand dollars? 7 00:00:26,800 --> 00:00:29,760 Speaker 1: Just remember this, Mr Potter, that this rabble you're talking about, 8 00:00:30,200 --> 00:00:32,400 Speaker 1: they do most of the working and paying and living 9 00:00:32,400 --> 00:00:34,760 Speaker 1: and dying in this community. Well is it too much 10 00:00:34,800 --> 00:00:36,680 Speaker 1: to have them working, paying, live and dyeing a couple 11 00:00:36,680 --> 00:00:41,720 Speaker 1: of decent rooms in a bath. There's George Bailey, the 12 00:00:41,920 --> 00:00:45,760 Speaker 1: dutiful savings and loan manager in It's a Wonderful Life 13 00:00:46,080 --> 00:00:50,279 Speaker 1: and the very model of middle class aspirations, A classic 14 00:00:50,360 --> 00:00:54,640 Speaker 1: since n I still watch it every December. Ever since 15 00:00:54,680 --> 00:00:59,320 Speaker 1: the post war economic boom, middle class workers aspiring for 16 00:00:59,360 --> 00:01:02,680 Speaker 1: a better life had been the backbone of the US economy. Sure, 17 00:01:02,800 --> 00:01:06,160 Speaker 1: we'd all love to be billionaires, but a nice home, 18 00:01:06,480 --> 00:01:09,200 Speaker 1: a stable job, with a bit left over to put 19 00:01:09,240 --> 00:01:12,440 Speaker 1: away for the future. Middle class is what a lot 20 00:01:12,520 --> 00:01:16,720 Speaker 1: of Americans have aimed to be. Every politician right and 21 00:01:16,880 --> 00:01:20,119 Speaker 1: left claims to be a champion of it. Our economy 22 00:01:20,160 --> 00:01:23,120 Speaker 1: doesn't work as well or grow as fast. Want a 23 00:01:23,160 --> 00:01:25,720 Speaker 1: few prosper at the expense of a growing middle class 24 00:01:26,200 --> 00:01:27,920 Speaker 1: and ladders for folks who want to get into the 25 00:01:27,959 --> 00:01:32,440 Speaker 1: middle class. Pop culture is squarely aimed at it and 26 00:01:32,840 --> 00:01:37,000 Speaker 1: pokes fun at it. I need cash, folk, food and cattle, 27 00:01:37,560 --> 00:01:40,839 Speaker 1: like posters, beer and grass. Time for me to join 28 00:01:40,959 --> 00:01:48,600 Speaker 1: the middle class. That's Homer Simpson, who somehow supports a 29 00:01:48,680 --> 00:01:52,320 Speaker 1: family of five on a nuclear power plant workers salary. 30 00:01:53,040 --> 00:01:55,960 Speaker 1: And then there's all the companies who have long courted 31 00:01:56,120 --> 00:01:59,280 Speaker 1: the middle class for its disposable income. It's only good 32 00:01:59,280 --> 00:02:03,240 Speaker 1: common sense. I be stuck with one expensive car when 33 00:02:03,280 --> 00:02:06,400 Speaker 1: you can enjoy all the fun and freedom of too 34 00:02:06,560 --> 00:02:12,160 Speaker 1: fine for its For generations, though, racial discrimination and the 35 00:02:12,240 --> 00:02:16,000 Speaker 1: persistent wealth gap have kept many Americans of color on 36 00:02:16,080 --> 00:02:19,160 Speaker 1: the outside. Here's a clip from Still a Brother in 37 00:02:19,320 --> 00:02:23,720 Speaker 1: n documentary about black middle class Americans. Black to live 38 00:02:23,800 --> 00:02:27,240 Speaker 1: in a tree line street. I'd like to have a 39 00:02:27,320 --> 00:02:29,639 Speaker 1: summer home on the lake. I like to wear some 40 00:02:29,880 --> 00:02:34,239 Speaker 1: from brothers. All Americans, and I am an American think 41 00:02:34,400 --> 00:02:37,640 Speaker 1: this way. For people working their way up, It's not 42 00:02:37,800 --> 00:02:40,680 Speaker 1: always easy to get into the middle class, and for 43 00:02:40,720 --> 00:02:44,760 Speaker 1: those who do not always easy to stay there. And 44 00:02:44,800 --> 00:02:48,760 Speaker 1: now here comes inflation and a shaky housing market and 45 00:02:48,840 --> 00:02:52,720 Speaker 1: a possible recession to make it even harder, which raises 46 00:02:52,760 --> 00:02:58,200 Speaker 1: the question is being comfortably middle class still comfortable or 47 00:02:58,400 --> 00:03:02,360 Speaker 1: is the idea losing its mean? My colleague Sean donnan 48 00:03:02,480 --> 00:03:05,720 Speaker 1: has been wrestling with these very questions, and he's here 49 00:03:05,919 --> 00:03:11,880 Speaker 1: with some answers. Happy to have Sean donn in here. 50 00:03:11,919 --> 00:03:16,679 Speaker 1: He has Bloomberg Senior economics writer Sean You and our 51 00:03:16,720 --> 00:03:20,320 Speaker 1: colleagues Alex Tanzi, Claire Valentine, and Ariel Low have written 52 00:03:20,320 --> 00:03:24,600 Speaker 1: a big story about the middle class and what they're 53 00:03:24,639 --> 00:03:28,960 Speaker 1: facing in this kind of very tumultuous period. I kind 54 00:03:28,960 --> 00:03:31,560 Speaker 1: of wanted just to start out by asking you what 55 00:03:31,720 --> 00:03:33,720 Speaker 1: is the middle class? Because it's kind of a mushy thing. 56 00:03:33,720 --> 00:03:35,440 Speaker 1: We all have a feeling of what it is, but 57 00:03:35,520 --> 00:03:39,440 Speaker 1: as is a writer about economics, how do you define it? Yeah? No, absolutely, 58 00:03:39,760 --> 00:03:41,800 Speaker 1: you're right. It's an amorphous thing and it's something that 59 00:03:41,880 --> 00:03:44,560 Speaker 1: we all have a different definition of in a lot 60 00:03:44,600 --> 00:03:48,040 Speaker 1: of ways. We set out to try and put some 61 00:03:48,120 --> 00:03:50,920 Speaker 1: hard boundaries on it. So what we did is we 62 00:03:50,960 --> 00:03:54,520 Speaker 1: worked with a group of economist University of California, Berkeley, 63 00:03:54,640 --> 00:03:59,160 Speaker 1: who have some really great work tracking both income and 64 00:03:59,280 --> 00:04:01,960 Speaker 1: wealth and America. That second part is really important because 65 00:04:01,960 --> 00:04:05,120 Speaker 1: we don't often talk about it in the mainstream media. 66 00:04:05,200 --> 00:04:07,440 Speaker 1: When we're talking about the middle class, we often think 67 00:04:07,440 --> 00:04:10,240 Speaker 1: about income what people earned in any given year. And 68 00:04:10,280 --> 00:04:12,960 Speaker 1: on the income side, there's about a hundred million people 69 00:04:13,000 --> 00:04:15,280 Speaker 1: who we think of as the middle class between somewhere 70 00:04:15,320 --> 00:04:17,719 Speaker 1: between a hundred forty five thou dollars a year and 71 00:04:17,760 --> 00:04:21,000 Speaker 1: a hundred and eighty thousand dollars a year paraddle, not 72 00:04:21,080 --> 00:04:23,840 Speaker 1: per household parattle. All right, So if you're making forty 73 00:04:24,360 --> 00:04:26,720 Speaker 1: dollars a year, give or take that somewhere around like 74 00:04:26,800 --> 00:04:31,120 Speaker 1: twenty three two an hour depending on how many hours 75 00:04:31,120 --> 00:04:32,640 Speaker 1: you work in vacation and all that kind of stuff, 76 00:04:32,640 --> 00:04:34,840 Speaker 1: and it gets you into the middle class, right, I mean, 77 00:04:34,920 --> 00:04:37,599 Speaker 1: and there's actually fifty percent of the country, there's more 78 00:04:37,640 --> 00:04:39,400 Speaker 1: than a hundred million people who are going to make 79 00:04:39,520 --> 00:04:42,120 Speaker 1: less than you at that level. That gets you into 80 00:04:42,720 --> 00:04:45,480 Speaker 1: like the income level of middle class. Right. But if 81 00:04:45,480 --> 00:04:47,520 Speaker 1: you lose your job, you could fall out. So middle 82 00:04:47,520 --> 00:04:50,600 Speaker 1: class has another peep absolutely, And that's the whole thing 83 00:04:50,640 --> 00:04:52,880 Speaker 1: that over the years we've talked a lot about this 84 00:04:52,920 --> 00:04:54,680 Speaker 1: idea of the hollowing out of the middle class is 85 00:04:54,720 --> 00:04:58,200 Speaker 1: stagnant middle class, and we've really been focused on income. 86 00:04:58,880 --> 00:05:01,880 Speaker 1: What we've often missed is the wealth side of things, 87 00:05:01,960 --> 00:05:05,720 Speaker 1: and that's all the stuff that you own, whether it's 88 00:05:05,520 --> 00:05:07,880 Speaker 1: that equity that you have in your home, whether it's 89 00:05:07,880 --> 00:05:10,839 Speaker 1: your retirement savings, whether it's the portion of your car 90 00:05:10,960 --> 00:05:13,240 Speaker 1: that you own. It may even be your TV. But 91 00:05:13,400 --> 00:05:16,520 Speaker 1: to get into the middle class, it's people who earned 92 00:05:16,560 --> 00:05:18,960 Speaker 1: between forty five thousand and a hundred and eighty thousand 93 00:05:19,000 --> 00:05:21,320 Speaker 1: dollars a year. And it's people who also, and this 94 00:05:21,360 --> 00:05:24,640 Speaker 1: is the important have between a hundred thousand dollars in 95 00:05:24,839 --> 00:05:29,640 Speaker 1: savings and assets and a million dollars in assets. So 96 00:05:29,680 --> 00:05:32,000 Speaker 1: it gives you that cushion so that if you lose 97 00:05:32,040 --> 00:05:34,919 Speaker 1: your job, you don't necessarily fall out because you have 98 00:05:35,040 --> 00:05:37,000 Speaker 1: something to fall back. And I think we can all 99 00:05:37,040 --> 00:05:39,640 Speaker 1: agree that one of the key definitions of being middle 100 00:05:39,680 --> 00:05:43,400 Speaker 1: class is economic security. Right, It's a level of I 101 00:05:43,440 --> 00:05:47,920 Speaker 1: can deal with emergency payments and maybe hard car repairs 102 00:05:48,120 --> 00:05:50,720 Speaker 1: cost a lot and we all have struggled to pay them. 103 00:05:50,880 --> 00:05:53,240 Speaker 1: But at the same time, I have some savings. I 104 00:05:53,320 --> 00:05:56,200 Speaker 1: feel like you know, worst comes to worst, I may 105 00:05:56,240 --> 00:05:58,080 Speaker 1: be able to sell my home, you know, and I 106 00:05:58,120 --> 00:06:01,120 Speaker 1: may have the assets that are there if I can 107 00:06:01,160 --> 00:06:04,560 Speaker 1: tap into that equity in the home as many people 108 00:06:04,560 --> 00:06:06,760 Speaker 1: did during the pandemic when you saw this huge boom 109 00:06:06,800 --> 00:06:10,159 Speaker 1: in in mortgage refinancing, and I can use that money 110 00:06:10,200 --> 00:06:13,480 Speaker 1: to pay for my kids education, I can do home 111 00:06:13,560 --> 00:06:17,240 Speaker 1: repairs with that money. I also have retirement savings that 112 00:06:17,440 --> 00:06:20,480 Speaker 1: I can lean on. But that wealth component is really important. 113 00:06:20,480 --> 00:06:23,440 Speaker 1: And what's really important to think about in terms of 114 00:06:23,440 --> 00:06:26,200 Speaker 1: the economic health in the middle class is what's happened 115 00:06:26,240 --> 00:06:29,120 Speaker 1: to that wealth component, particularly over the last ten years 116 00:06:29,200 --> 00:06:32,000 Speaker 1: or so. So now you've we've defined the middle class 117 00:06:32,600 --> 00:06:35,840 Speaker 1: and these are some pretty difficult economic times. We've got 118 00:06:35,920 --> 00:06:41,520 Speaker 1: high inflation, housing values are you know, uh influx? How 119 00:06:41,600 --> 00:06:43,840 Speaker 1: is the middle class feeling? Are they feeling like they 120 00:06:43,880 --> 00:06:48,440 Speaker 1: could wind up losing it all? So there's two answers 121 00:06:48,440 --> 00:06:50,640 Speaker 1: to that. The first is how are they doing? What 122 00:06:50,680 --> 00:06:52,240 Speaker 1: does the data tell us in terms of how are 123 00:06:52,279 --> 00:06:54,320 Speaker 1: they doing? And then we also went out and we 124 00:06:54,360 --> 00:06:57,040 Speaker 1: did some polling to ask how are they feeling? So 125 00:06:57,160 --> 00:07:00,160 Speaker 1: on the how are they doing part, some people may 126 00:07:00,160 --> 00:07:01,880 Speaker 1: not want to hear this. This may not fit with 127 00:07:01,960 --> 00:07:05,080 Speaker 1: the dominant narrative, but the American middle class, based on 128 00:07:05,400 --> 00:07:08,320 Speaker 1: the wealth data in particularly that we have, has never 129 00:07:08,360 --> 00:07:11,080 Speaker 1: been richer than it was earlier this year. In March 130 00:07:11,120 --> 00:07:14,760 Speaker 1: of this year, the average wealth of those hundred million 131 00:07:14,760 --> 00:07:17,200 Speaker 1: people in that middle class topped at at around three 132 00:07:18,320 --> 00:07:23,280 Speaker 1: thousand dollars. That's three dollars in net worth. That's a 133 00:07:23,360 --> 00:07:26,520 Speaker 1: hundred and twenty thousand dollars more than it was in 134 00:07:26,600 --> 00:07:30,680 Speaker 1: January when President Trump came into office. And it's something 135 00:07:30,720 --> 00:07:33,240 Speaker 1: that's accelerated over the last couple of years. During the 136 00:07:33,320 --> 00:07:36,520 Speaker 1: pandemic as a resolved, largely because of housing prices and 137 00:07:36,560 --> 00:07:39,800 Speaker 1: also the stock market boom that we had until this year. 138 00:07:41,920 --> 00:07:45,720 Speaker 1: So people were just earning a lot on their investments, 139 00:07:45,760 --> 00:07:48,000 Speaker 1: they were seeing their savings rise, they were able to 140 00:07:48,000 --> 00:07:50,800 Speaker 1: contribute more to four own case, their houses were going up. 141 00:07:50,840 --> 00:07:53,880 Speaker 1: It was just good times, absolutely until March of this year. 142 00:07:54,120 --> 00:07:58,040 Speaker 1: And then what happened is the Federal Reserve started fighting 143 00:07:58,400 --> 00:08:01,760 Speaker 1: back against inflation soared raising interest rates, and we've seen 144 00:08:01,800 --> 00:08:04,840 Speaker 1: the slowing in the economy that's come since then, and 145 00:08:04,920 --> 00:08:07,160 Speaker 1: that has had an impact on wealth as the stock 146 00:08:07,200 --> 00:08:11,920 Speaker 1: market has turned and also as property values have started 147 00:08:11,960 --> 00:08:16,520 Speaker 1: to turn as well. And today, according to these economists 148 00:08:16,520 --> 00:08:19,720 Speaker 1: at the University of California, Berkeley and their calculations, the 149 00:08:19,720 --> 00:08:22,480 Speaker 1: American middle class is worth about twenty five thousand dollars 150 00:08:22,560 --> 00:08:25,240 Speaker 1: less than it was in March of this year. And 151 00:08:25,280 --> 00:08:27,520 Speaker 1: that is a bigger and just to put that in perspective, 152 00:08:27,560 --> 00:08:30,440 Speaker 1: that's a big that's about a seven percent decline, and 153 00:08:30,520 --> 00:08:33,640 Speaker 1: it's a bigger decline that we saw during the pandemic 154 00:08:33,679 --> 00:08:36,560 Speaker 1: just a couple of years ago, and it's in fact 155 00:08:36,559 --> 00:08:40,360 Speaker 1: the biggest decline we've seen since the Great Recession. So 156 00:08:40,679 --> 00:08:43,880 Speaker 1: if you ask then the middle class about how are 157 00:08:43,920 --> 00:08:46,839 Speaker 1: they feeling well, they will tell you that their personal 158 00:08:47,320 --> 00:08:53,760 Speaker 1: circumstances are pretty good. And that's what this pull with Harris. 159 00:08:53,800 --> 00:08:57,000 Speaker 1: We went out and over a month we asked questions 160 00:08:57,040 --> 00:08:59,600 Speaker 1: to people in that specific target demographic that I talked 161 00:08:59,600 --> 00:09:03,559 Speaker 1: about the forehand around the country. And what we found 162 00:09:03,760 --> 00:09:06,280 Speaker 1: was you asked them about the personal circumstances, and they're 163 00:09:06,280 --> 00:09:08,600 Speaker 1: feeling pretty good. There's gotta be a butt in here someplace, 164 00:09:08,720 --> 00:09:10,800 Speaker 1: and there is a big butt in that and that 165 00:09:11,000 --> 00:09:13,319 Speaker 1: is that you asked them about how the next year 166 00:09:13,360 --> 00:09:16,360 Speaker 1: is going to be in then feeling a little shaky, 167 00:09:16,720 --> 00:09:18,600 Speaker 1: right because they're starting to see it. People are starting 168 00:09:18,600 --> 00:09:20,520 Speaker 1: to look at the four O one case. They may 169 00:09:20,559 --> 00:09:23,319 Speaker 1: look at Zillo and look at what their property valuation 170 00:09:23,440 --> 00:09:26,040 Speaker 1: is doing, and they're starting to see that turn. And 171 00:09:26,559 --> 00:09:29,439 Speaker 1: in fact, when you then ask them about the broader economy, 172 00:09:29,880 --> 00:09:35,000 Speaker 1: the words that come up are things like anxious, stressed, depressed. 173 00:09:35,520 --> 00:09:38,720 Speaker 1: Just in fact told us that they were feeling optimistic 174 00:09:38,760 --> 00:09:41,880 Speaker 1: about the U. S economy. So we have this kind 175 00:09:41,880 --> 00:09:44,480 Speaker 1: of paradox when it comes to the middle class right now. 176 00:09:44,760 --> 00:09:48,280 Speaker 1: The numbers tell us earlier this year they were richard 177 00:09:48,280 --> 00:09:51,400 Speaker 1: than they had ever been on average, and yet now 178 00:09:51,440 --> 00:09:54,280 Speaker 1: they're feeling pretty anxious about how things are turning. Sean 179 00:09:54,320 --> 00:09:57,760 Speaker 1: one person you spoke to is Tom Malie, and he 180 00:09:57,800 --> 00:10:02,439 Speaker 1: fits what you're described. Tom is uh seventy one year 181 00:10:02,480 --> 00:10:06,720 Speaker 1: old retired autometrist. He lives in the suburbs of Columbus, Ohio, 182 00:10:06,800 --> 00:10:09,079 Speaker 1: and he's lived there for years. He spent twenty five 183 00:10:09,160 --> 00:10:11,600 Speaker 1: years in the military, working as an autometrist in the military, 184 00:10:11,640 --> 00:10:16,160 Speaker 1: and then went into private practice. He has three grown sons. 185 00:10:16,800 --> 00:10:19,360 Speaker 1: He is that classic empty nester. In fact, he retired 186 00:10:19,440 --> 00:10:22,640 Speaker 1: right on the eve of the pandemic let's listen to 187 00:10:22,800 --> 00:10:25,920 Speaker 1: how Tom describes what he's feeling like right now. My 188 00:10:25,960 --> 00:10:29,040 Speaker 1: wife and I retired about three years ago. Our goal 189 00:10:29,160 --> 00:10:33,760 Speaker 1: was to travel and be entertained. This is deja vu 190 00:10:33,880 --> 00:10:38,720 Speaker 1: all over again with the inflation. My generation started our 191 00:10:38,760 --> 00:10:42,760 Speaker 1: careers in the late seventies early eighties, when inflation at 192 00:10:42,760 --> 00:10:48,160 Speaker 1: one point was and uh, we're reliving this one more time. 193 00:10:48,679 --> 00:10:53,439 Speaker 1: So inflation plus taking out required minimum distributions and a 194 00:10:53,880 --> 00:10:58,360 Speaker 1: probably lost that's rather disconcerting. So as you hear there, 195 00:10:58,440 --> 00:11:00,839 Speaker 1: Tom's at a different stay age in his life. He's 196 00:11:01,000 --> 00:11:04,160 Speaker 1: later on in his life. He's enjoying his retirement. He 197 00:11:04,440 --> 00:11:06,640 Speaker 1: is also looking out at the lives that his kids 198 00:11:06,640 --> 00:11:09,320 Speaker 1: are are are living, and he has eight grandkids between 199 00:11:09,320 --> 00:11:13,080 Speaker 1: his three sons, so he's thinking through. He's thinking further 200 00:11:13,120 --> 00:11:15,760 Speaker 1: down the line in terms of what life is going 201 00:11:15,800 --> 00:11:18,720 Speaker 1: to look like for them. I'm not sure that even 202 00:11:18,760 --> 00:11:21,720 Speaker 1: all my sons and spouses are well educated and earning 203 00:11:22,160 --> 00:11:24,719 Speaker 1: a good living. I'm not really quite sure they can 204 00:11:24,760 --> 00:11:29,120 Speaker 1: afford to put their children through advanced degrees like I 205 00:11:29,280 --> 00:11:32,160 Speaker 1: was able to do with my own children. That is 206 00:11:32,200 --> 00:11:35,000 Speaker 1: a concern that weighs heavily on me. I want to 207 00:11:35,040 --> 00:11:37,760 Speaker 1: bring in one other person you spoke to, and her 208 00:11:37,840 --> 00:11:42,400 Speaker 1: name is Gayl Bennington. So Gail is a retired psychologist. 209 00:11:42,520 --> 00:11:46,560 Speaker 1: She is married to a retired public school teacher and 210 00:11:46,760 --> 00:11:50,920 Speaker 1: basketball coach. They lived just outside of Lansing, uh Michigan 211 00:11:51,080 --> 00:11:55,280 Speaker 1: in Michigan. And she's an interesting character in that she 212 00:11:55,400 --> 00:12:00,079 Speaker 1: will tell you that she started cutting back spending in 213 00:12:00,120 --> 00:12:04,360 Speaker 1: the pandemic and she's just living her pandemic life now 214 00:12:04,480 --> 00:12:07,600 Speaker 1: and that's her kind of new reality, sort of adjusted 215 00:12:07,640 --> 00:12:09,640 Speaker 1: for inflation, if you will. Let's listen to what she 216 00:12:09,720 --> 00:12:12,480 Speaker 1: had to say. I've always been like this too. I 217 00:12:12,520 --> 00:12:15,559 Speaker 1: think you just have to worry about where your money 218 00:12:15,640 --> 00:12:19,480 Speaker 1: is going, and so I never really spend anything without 219 00:12:19,520 --> 00:12:22,680 Speaker 1: being quite aware of is this the best deal I 220 00:12:22,679 --> 00:12:25,600 Speaker 1: can get? Is there any way that I can save 221 00:12:25,679 --> 00:12:29,160 Speaker 1: money doing this? And frequently do I really need this 222 00:12:29,400 --> 00:12:35,040 Speaker 1: or do I just want it? So our Tom Mainlee 223 00:12:35,080 --> 00:12:38,360 Speaker 1: and Gayl Bennington typical of what you found when you 224 00:12:38,520 --> 00:12:40,480 Speaker 1: reached out through the Pole and when you started talking 225 00:12:40,480 --> 00:12:44,280 Speaker 1: to people about their experiences. No. Absolutely, So Tom and Gail, 226 00:12:44,360 --> 00:12:47,640 Speaker 1: like other respondents to the Pole, are really interesting in 227 00:12:47,640 --> 00:12:50,280 Speaker 1: particularly when he gets to talking about their kids and 228 00:12:50,559 --> 00:12:52,319 Speaker 1: the future of the Daisy and this is something that 229 00:12:52,360 --> 00:12:55,320 Speaker 1: we've talked about a lot in America in terms of 230 00:12:55,480 --> 00:12:57,400 Speaker 1: views of the middle class. Okay, it's one thing to 231 00:12:57,400 --> 00:12:59,000 Speaker 1: be in the middle class, but what do I expect 232 00:12:59,000 --> 00:13:01,320 Speaker 1: my kids? And it was like the American dream was, 233 00:13:01,720 --> 00:13:05,520 Speaker 1: you know, the cliches every generation, the parents want their 234 00:13:05,600 --> 00:13:08,800 Speaker 1: children to do better than they did. Absolutely. Now I 235 00:13:08,840 --> 00:13:11,960 Speaker 1: think this gets into a little bit into partisan politics. 236 00:13:11,960 --> 00:13:15,439 Speaker 1: So Tom is a Republican, Gail is a Democrat, and 237 00:13:15,480 --> 00:13:17,840 Speaker 1: they have a different take on where the economy is going. 238 00:13:17,920 --> 00:13:20,240 Speaker 1: We see that in the polls Republicans tend to be 239 00:13:20,240 --> 00:13:23,880 Speaker 1: more pessimistic than Democrats, who are much more optimistic about 240 00:13:23,920 --> 00:13:27,240 Speaker 1: what lies ahead. But both Republicans and Democrats tend to 241 00:13:27,240 --> 00:13:30,560 Speaker 1: be actually in this middle class Cohort, tend to be 242 00:13:30,600 --> 00:13:33,680 Speaker 1: really quite optimistic about the future they see for their 243 00:13:33,760 --> 00:13:36,480 Speaker 1: kids and the expectation that their kids are going to 244 00:13:36,600 --> 00:13:39,160 Speaker 1: do better. And in fact, Gail is really interesting and 245 00:13:39,160 --> 00:13:42,120 Speaker 1: that she's got a daughter. She will tell you that 246 00:13:42,240 --> 00:13:45,400 Speaker 1: she grew up and they were fairly frugal growing up. 247 00:13:45,440 --> 00:13:48,400 Speaker 1: They lived in a middle class suburb of Lansing, but 248 00:13:48,520 --> 00:13:51,080 Speaker 1: that they were probably at the bottom end in terms 249 00:13:51,120 --> 00:13:54,120 Speaker 1: of income because her husband was a public school teacher 250 00:13:54,240 --> 00:13:57,240 Speaker 1: rather than a manager at a big company, and that 251 00:13:57,320 --> 00:13:59,839 Speaker 1: they lived a fairly frugal life, and in fact their 252 00:14:00,000 --> 00:14:03,920 Speaker 1: matter is a twenty four year old biomedical engineer. And 253 00:14:04,240 --> 00:14:09,720 Speaker 1: Gail laughs because her daughter now is earning more than 254 00:14:09,720 --> 00:14:12,160 Speaker 1: her husband ever did as a public school teacher, as 255 00:14:12,160 --> 00:14:15,040 Speaker 1: a twenty four year old engineer, and by the way, 256 00:14:15,160 --> 00:14:17,120 Speaker 1: is spending a lot more and a lot more freely 257 00:14:17,480 --> 00:14:20,720 Speaker 1: than her mother ever did. And so Gayl will say, 258 00:14:20,760 --> 00:14:22,440 Speaker 1: you know, we're at this good place in life where 259 00:14:22,960 --> 00:14:25,400 Speaker 1: we're going to survive. We've got enough stashed away for retirement, 260 00:14:25,440 --> 00:14:27,560 Speaker 1: we've got our home, and we're not going to be 261 00:14:27,600 --> 00:14:29,440 Speaker 1: a burden to our daughter, who, by the way, is 262 00:14:29,480 --> 00:14:32,040 Speaker 1: already enjoying a better life than we ever did. From 263 00:14:32,080 --> 00:14:34,560 Speaker 1: my daughter, I think that she will end up being 264 00:14:34,600 --> 00:14:36,680 Speaker 1: the kind of person where if she wants something, she'll 265 00:14:36,720 --> 00:14:39,720 Speaker 1: be able to get it. And I've never felt like that, 266 00:14:40,040 --> 00:14:42,440 Speaker 1: even though I probably could. I mean I could, I 267 00:14:42,480 --> 00:14:44,480 Speaker 1: could just go out and get something if I wanted it. 268 00:14:44,520 --> 00:14:46,480 Speaker 1: I could just go out for dinner if I wanted to. 269 00:14:47,080 --> 00:14:50,120 Speaker 1: But I don't do that. I'm always aware of I 270 00:14:50,200 --> 00:14:52,640 Speaker 1: have a budget. I have a strict budget, and and 271 00:14:52,680 --> 00:14:56,120 Speaker 1: so I think that's being middle class, always being aware 272 00:14:56,160 --> 00:15:01,520 Speaker 1: of and I really spend this money when we come back. 273 00:15:01,800 --> 00:15:18,320 Speaker 1: My conversation with Sean Donning continues, it's a chance to 274 00:15:18,400 --> 00:15:21,680 Speaker 1: forget that we're a lower middle class neighborhood living under 275 00:15:21,720 --> 00:15:25,000 Speaker 1: the flight path of the Orlando Airport and trick people, 276 00:15:26,400 --> 00:15:31,960 Speaker 1: trick people into thinking we're a scary, upper middle class 277 00:15:31,960 --> 00:15:35,960 Speaker 1: neighborhood that people would want to visit and get candy from. 278 00:15:36,000 --> 00:15:39,280 Speaker 1: I'm back with Sean Donning. That clip from the sitcom 279 00:15:39,320 --> 00:15:42,800 Speaker 1: Fresh Off the Boat, where the character lewis played by 280 00:15:42,880 --> 00:15:52,320 Speaker 1: Randall Park is touching on our complicated feelings about home ownership. Sean, earlier, 281 00:15:52,320 --> 00:15:56,000 Speaker 1: you mentioned something really important, which is one of the 282 00:15:56,040 --> 00:15:59,080 Speaker 1: things that allows the middle class to build wealth, to 283 00:15:59,360 --> 00:16:03,280 Speaker 1: feel good even in uncertain times, is that they own 284 00:16:03,440 --> 00:16:07,000 Speaker 1: a home. And the thing that you and our colleagues 285 00:16:07,000 --> 00:16:10,120 Speaker 1: founding in reporting and writing this story is that homeownership 286 00:16:10,200 --> 00:16:13,840 Speaker 1: seems to be the cornerstone of the middle class, absolutely, 287 00:16:13,920 --> 00:16:16,520 Speaker 1: and it's you know, about two thirds of American households 288 00:16:16,640 --> 00:16:19,480 Speaker 1: live in a house that they own, but that has 289 00:16:19,520 --> 00:16:23,160 Speaker 1: a huge impact on the wealth of a family, right 290 00:16:23,200 --> 00:16:26,160 Speaker 1: And we've just seen what is a remarkable period in 291 00:16:26,240 --> 00:16:29,800 Speaker 1: terms of wealth accumulation, mainly because of that property wealth. 292 00:16:30,160 --> 00:16:34,880 Speaker 1: In two thousand and twelve, Americans had about nine trillion 293 00:16:35,000 --> 00:16:38,520 Speaker 1: dollars in home equity across the country. This is middle 294 00:16:38,520 --> 00:16:43,320 Speaker 1: classes of all folks. This year that's topped out above 295 00:16:43,400 --> 00:16:47,760 Speaker 1: twenty nine trillion dollars. We've added twenty trillion dollars in 296 00:16:47,840 --> 00:16:51,760 Speaker 1: wealth just associated with property in the last decade, which 297 00:16:51,760 --> 00:16:55,360 Speaker 1: is a remarkable number, and that is what is behind 298 00:16:56,000 --> 00:16:58,880 Speaker 1: that wealth of the middle class. To a large extent, 299 00:16:59,120 --> 00:17:03,440 Speaker 1: about thirty six percent of the net worth of the 300 00:17:03,480 --> 00:17:06,720 Speaker 1: middle class is tied up in property. Is that home equity. 301 00:17:06,760 --> 00:17:10,000 Speaker 1: Then you get retirement savings and other things, but that's 302 00:17:10,040 --> 00:17:14,159 Speaker 1: the biggest component of wealth for folks in the middle class. 303 00:17:14,200 --> 00:17:16,800 Speaker 1: The big question we have now, and we see this 304 00:17:17,080 --> 00:17:22,280 Speaker 1: really especially among younger Americans and folks who are lower income, 305 00:17:22,840 --> 00:17:25,960 Speaker 1: is that you have this divide in America between a 306 00:17:26,080 --> 00:17:29,919 Speaker 1: renter class and a homeowner class. And that may in 307 00:17:30,040 --> 00:17:35,320 Speaker 1: fact be the most pertinent class division in America, both 308 00:17:35,320 --> 00:17:38,119 Speaker 1: now and going forward. And the other but since there's 309 00:17:38,160 --> 00:17:41,320 Speaker 1: always one of them, is that even people who own 310 00:17:41,359 --> 00:17:43,200 Speaker 1: a home, we're able to buy it at a lower price, 311 00:17:43,200 --> 00:17:47,480 Speaker 1: perhaps years ago they also have concerns because so much 312 00:17:47,640 --> 00:17:52,680 Speaker 1: of their wealth is in their homes that their housebound. 313 00:17:53,800 --> 00:17:56,879 Speaker 1: The things you see in a recession, and economists will 314 00:17:56,880 --> 00:18:00,320 Speaker 1: tell you this, is that you see mobility slow down. 315 00:18:00,560 --> 00:18:03,040 Speaker 1: People stopped moving. And one of the reasons, especially when 316 00:18:03,080 --> 00:18:06,360 Speaker 1: housing prices turned down, and we saw this in two 317 00:18:06,400 --> 00:18:08,080 Speaker 1: thousand and eight and two thousand and nine when we 318 00:18:08,119 --> 00:18:12,359 Speaker 1: had the housing crash, then is the value of the 319 00:18:12,440 --> 00:18:15,280 Speaker 1: homes dips below what you may own on a loan. 320 00:18:15,359 --> 00:18:18,159 Speaker 1: We're less at a risk of that now, But what 321 00:18:18,280 --> 00:18:21,760 Speaker 1: we are at a risk of is this perceived wealth, 322 00:18:21,840 --> 00:18:25,800 Speaker 1: this paper wealth, taking a big hit and affecting how 323 00:18:25,840 --> 00:18:28,480 Speaker 1: people behave in the economy. And secondly, if someone is 324 00:18:28,520 --> 00:18:31,239 Speaker 1: transferred for work and Tom Maylie ran into this with 325 00:18:31,280 --> 00:18:33,040 Speaker 1: one of his sons, all of a sudden, they may 326 00:18:33,040 --> 00:18:35,720 Speaker 1: be going from a low interest rate mortgage to a 327 00:18:35,800 --> 00:18:39,400 Speaker 1: much higher interest rate mortgage and that may change their lifestyle, 328 00:18:39,440 --> 00:18:41,760 Speaker 1: the type of home they can afford, and so on. Also, 329 00:18:41,840 --> 00:18:44,800 Speaker 1: difficult to take money out of the house in the 330 00:18:44,920 --> 00:18:46,840 Speaker 1: form of a home equity loan if you hit a 331 00:18:46,920 --> 00:18:49,399 Speaker 1: rough patch because those interest rates are really high to 332 00:18:49,680 --> 00:18:52,680 Speaker 1: absolutely so. One of the things that we saw during 333 00:18:52,680 --> 00:18:57,040 Speaker 1: the pandemic was an enormous boom in refinancing a lot 334 00:18:57,080 --> 00:18:59,720 Speaker 1: of people lowering their monthly payment but also taking out 335 00:18:59,720 --> 00:19:03,440 Speaker 1: some of at equity and using that essentially to keep 336 00:19:03,520 --> 00:19:05,040 Speaker 1: up in a lot of respects. And we're going to 337 00:19:05,119 --> 00:19:08,080 Speaker 1: see that change. Another person quoted in the story is 338 00:19:08,320 --> 00:19:11,800 Speaker 1: Brandy Romero, and she talks about this kind of conflict 339 00:19:11,840 --> 00:19:15,280 Speaker 1: between owning a house and not being able ever to 340 00:19:15,800 --> 00:19:18,720 Speaker 1: move from that house. Yeah. No, So Brandy Romero is 341 00:19:18,760 --> 00:19:21,159 Speaker 1: really interesting. She moved from Louisiana with her huts and 342 00:19:22,080 --> 00:19:25,040 Speaker 1: now five kids a few years ago. Uh. They live 343 00:19:25,080 --> 00:19:28,400 Speaker 1: in Wyoming, just outside Casper, Wyoming, and she's got literally 344 00:19:28,920 --> 00:19:32,879 Speaker 1: millionaires uh and a YouTube star moving in around the 345 00:19:32,880 --> 00:19:36,320 Speaker 1: corner and building big houses. And she's in her home 346 00:19:36,440 --> 00:19:39,240 Speaker 1: and they bought it recently, and they're starting to wonder 347 00:19:39,680 --> 00:19:41,840 Speaker 1: whether this may be the last home they ever buy, 348 00:19:42,000 --> 00:19:46,000 Speaker 1: and how they're gonna make ends meet going forward. Brandy 349 00:19:46,119 --> 00:19:49,640 Speaker 1: is a member of that middle class. She's also at 350 00:19:49,720 --> 00:19:52,040 Speaker 1: night driving uber and Lyft to try and make ends meet. 351 00:19:52,320 --> 00:19:54,960 Speaker 1: Earlier in the show, we heard from some older people. 352 00:19:55,520 --> 00:19:58,320 Speaker 1: Our senior producer Katherine Fink went out to talk to 353 00:19:58,359 --> 00:20:01,440 Speaker 1: people in their twenties and third means about this idea 354 00:20:01,480 --> 00:20:04,080 Speaker 1: of home ownership, whether they own a home or if 355 00:20:04,080 --> 00:20:06,560 Speaker 1: they think they'll ever be able to afford one. I 356 00:20:06,600 --> 00:20:09,199 Speaker 1: don't own a home, so I think a middle class 357 00:20:09,720 --> 00:20:13,640 Speaker 1: people often rent and don't own a home. So I've 358 00:20:13,680 --> 00:20:17,480 Speaker 1: seen myself there. It took a while of saving. It 359 00:20:17,520 --> 00:20:20,639 Speaker 1: also took basically moving. I used to live in the 360 00:20:20,640 --> 00:20:22,560 Speaker 1: Bay Area and groove to a place where I was 361 00:20:22,600 --> 00:20:25,280 Speaker 1: able to buy a home at some point, but it's 362 00:20:25,320 --> 00:20:29,200 Speaker 1: not happening in any near future. I would have to 363 00:20:29,240 --> 00:20:33,640 Speaker 1: switch careers and not go to school. Yeah, I'm twenty 364 00:20:33,680 --> 00:20:36,560 Speaker 1: five and I still lives at my parents place because 365 00:20:37,160 --> 00:20:40,119 Speaker 1: where I want to move is too expensive for me 366 00:20:40,160 --> 00:20:45,680 Speaker 1: to realistically govern. So it's either going to a bad 367 00:20:45,720 --> 00:20:49,760 Speaker 1: place or staying with my parents. By a house in 368 00:20:49,800 --> 00:20:52,719 Speaker 1: the way that I am now, we would take like 369 00:20:53,080 --> 00:20:56,280 Speaker 1: three or four lives, So I will need to see 370 00:20:56,280 --> 00:21:07,080 Speaker 1: what I can do to to make that happen. You 371 00:21:07,119 --> 00:21:09,480 Speaker 1: know how I describe the economic and social classes in 372 00:21:09,480 --> 00:21:12,560 Speaker 1: this country. The upper class keeps all of the money, 373 00:21:12,880 --> 00:21:16,480 Speaker 1: pays none of the taxes. The middle class pays all 374 00:21:16,480 --> 00:21:19,520 Speaker 1: of the taxes, does all of the work. The ploorer 375 00:21:19,600 --> 00:21:22,280 Speaker 1: there just to scare the get out of the middle 376 00:21:22,320 --> 00:21:29,000 Speaker 1: class becomes showing up at those jobs. I'm back with 377 00:21:29,080 --> 00:21:31,400 Speaker 1: Sean Donna and that, of course, there was a legendary 378 00:21:31,480 --> 00:21:35,200 Speaker 1: George Carlin capturing those tensions between those at the bottom 379 00:21:35,240 --> 00:21:40,800 Speaker 1: in the middle and those at the top, so searing. 380 00:21:40,840 --> 00:21:44,639 Speaker 1: I guess the big question now is what is the 381 00:21:44,680 --> 00:21:47,200 Speaker 1: future of the middle class um When of the economists 382 00:21:47,200 --> 00:21:50,920 Speaker 1: he spoke to at Berkeley, Gabriel Zuckman says that maybe 383 00:21:50,960 --> 00:21:53,919 Speaker 1: the idea of the middle class is a notion that 384 00:21:54,200 --> 00:21:58,480 Speaker 1: has come and gone. Yeah, And Gabriel makes a really 385 00:21:58,480 --> 00:22:02,080 Speaker 1: interesting point as well, which is that wealth has kind 386 00:22:02,080 --> 00:22:05,080 Speaker 1: of protected the middle class since the nineteen eighties and 387 00:22:05,119 --> 00:22:08,679 Speaker 1: the growing wealth. So in the nineteen eighties wealth, the 388 00:22:08,720 --> 00:22:12,399 Speaker 1: average wealth of American households is about three times a 389 00:22:12,520 --> 00:22:16,520 Speaker 1: year's worth the salary right year's income. Recently that's gone 390 00:22:16,560 --> 00:22:19,280 Speaker 1: up above six times, and if you think about that, 391 00:22:19,359 --> 00:22:22,400 Speaker 1: you start to think about, Okay, how that has insulated 392 00:22:22,440 --> 00:22:26,160 Speaker 1: the middle class in particular, who have really benefited most 393 00:22:26,240 --> 00:22:28,760 Speaker 1: from this property boom and this growing wealth that we've seen. 394 00:22:29,320 --> 00:22:32,000 Speaker 1: How that has insulated them from some of the harder 395 00:22:32,080 --> 00:22:36,720 Speaker 1: realities that we've seen in terms of stagnant media incomes, 396 00:22:37,240 --> 00:22:41,080 Speaker 1: the way the economy has changed, and so and Gabriel's 397 00:22:41,080 --> 00:22:43,920 Speaker 1: point is we're coming to the end of that era possibly, 398 00:22:44,040 --> 00:22:48,199 Speaker 1: and that's the big test in the years ahead. So 399 00:22:48,240 --> 00:22:52,880 Speaker 1: we're entering this prolonged period of inflation almost certainly going 400 00:22:52,920 --> 00:22:57,000 Speaker 1: to result in recession. The Federal Reserve and other policymakers 401 00:22:57,040 --> 00:22:58,960 Speaker 1: are trying to get their arms around it, throwing every 402 00:22:58,960 --> 00:23:01,760 Speaker 1: tool they've got. How is that going to affect this 403 00:23:01,960 --> 00:23:05,240 Speaker 1: wealth that is kind of the backbone of the American economy. 404 00:23:05,359 --> 00:23:07,920 Speaker 1: So this is this interesting economic moment that we're at. 405 00:23:08,760 --> 00:23:12,159 Speaker 1: Inflation attacks the income of the middle class, and it 406 00:23:12,240 --> 00:23:15,760 Speaker 1: attracts the paycheck that you get to fight that inflation. 407 00:23:15,800 --> 00:23:19,320 Speaker 1: When you raise interest rates, you're affecting asset prices, the 408 00:23:19,359 --> 00:23:22,200 Speaker 1: stock market, you're affecting the property market, and so on. 409 00:23:22,600 --> 00:23:25,359 Speaker 1: And so we're at this curious moment where to fight 410 00:23:25,880 --> 00:23:30,479 Speaker 1: the inflation that's attacking American middle class paychecks, the Federal 411 00:23:30,520 --> 00:23:32,639 Speaker 1: Reserve is actually going to be destroying some of that 412 00:23:32,720 --> 00:23:35,919 Speaker 1: wealth of the American middle class by slowing down the 413 00:23:35,920 --> 00:23:39,280 Speaker 1: property market, by slowing down the stock market and so on. 414 00:23:39,359 --> 00:23:43,480 Speaker 1: And that wealth is gonna go down for some time. 415 00:23:43,600 --> 00:23:46,920 Speaker 1: How long we don't know. That depends on the resilience 416 00:23:46,920 --> 00:23:49,080 Speaker 1: of the American economy. That depends on how long it 417 00:23:49,119 --> 00:23:52,280 Speaker 1: takes to to bring inflation down closer to where the 418 00:23:52,280 --> 00:23:54,879 Speaker 1: FED wants it to be the kind of healthy levels. 419 00:23:54,920 --> 00:23:57,479 Speaker 1: But that's the episode we're going into for the American 420 00:23:57,520 --> 00:24:00,879 Speaker 1: middle class. You know, my paycheck may go further at 421 00:24:00,920 --> 00:24:04,639 Speaker 1: the grocery store, but my home is going to be 422 00:24:04,680 --> 00:24:07,280 Speaker 1: worth a little bit less than it was. Sean, what 423 00:24:07,320 --> 00:24:10,440 Speaker 1: about people who are at the bottom who are trying 424 00:24:10,480 --> 00:24:13,840 Speaker 1: to work their way into the middle class, hoping to 425 00:24:13,960 --> 00:24:16,560 Speaker 1: get to that you know, bottom wrong of the middle class, 426 00:24:16,640 --> 00:24:20,679 Speaker 1: and are having a really difficult time doing that because 427 00:24:20,760 --> 00:24:26,320 Speaker 1: wages are just not keeping up with inflation. So one 428 00:24:26,359 --> 00:24:29,720 Speaker 1: of the things we've seen in the pandemic is arise, 429 00:24:30,160 --> 00:24:33,800 Speaker 1: an increase in inequality, and a lot of what's been 430 00:24:33,800 --> 00:24:37,600 Speaker 1: behind that has been the burden that has been felt 431 00:24:37,600 --> 00:24:40,639 Speaker 1: by folks and lower income jobs and how they've been 432 00:24:40,680 --> 00:24:44,359 Speaker 1: hitting the pandemic. We've seen incomes rise coming out, but 433 00:24:44,400 --> 00:24:49,000 Speaker 1: we haven't gotten away from this basic structural issue in 434 00:24:49,040 --> 00:24:51,800 Speaker 1: the US economy, which is, if you were in the 435 00:24:51,840 --> 00:24:56,120 Speaker 1: top one percent in this economy, you have had a 436 00:24:56,160 --> 00:24:59,600 Speaker 1: great couple of decades. If you're in the bottom ten 437 00:24:59,680 --> 00:25:04,199 Speaker 1: perc the bottom actually in the US economy, you've been 438 00:25:04,240 --> 00:25:06,880 Speaker 1: struggling and you're going to continue to struggle for some time. 439 00:25:07,160 --> 00:25:08,920 Speaker 1: Just some numbers to think about. At the beginning of 440 00:25:08,920 --> 00:25:11,399 Speaker 1: our conversation, we talked about the wealth of that middle 441 00:25:11,440 --> 00:25:14,360 Speaker 1: class and how they were wealthier than they had ever 442 00:25:14,440 --> 00:25:18,840 Speaker 1: been in March of this year. That wealth was thousand 443 00:25:18,920 --> 00:25:21,760 Speaker 1: dollars on average for that hundred million people in the 444 00:25:21,760 --> 00:25:24,840 Speaker 1: middle class. You take that to the two point five 445 00:25:24,960 --> 00:25:28,639 Speaker 1: million people, that much more elite group who are in 446 00:25:28,720 --> 00:25:31,760 Speaker 1: the top one percent, their average wealth in March of 447 00:25:31,800 --> 00:25:35,600 Speaker 1: this year was almost twenty million dollars. You look at 448 00:25:35,600 --> 00:25:41,280 Speaker 1: the bottom fifty five million people almost their average wealth 449 00:25:41,480 --> 00:25:44,959 Speaker 1: was just twelve thousand dollars this year. The reality is 450 00:25:45,000 --> 00:25:48,159 Speaker 1: we still have this fractured economy. That middle class may 451 00:25:48,200 --> 00:25:51,080 Speaker 1: be strong, the path in the middle class is still 452 00:25:51,119 --> 00:25:55,880 Speaker 1: incredibly difficult because there are still a lot more people 453 00:25:55,880 --> 00:25:58,760 Speaker 1: than there are in the middle class sitting below them 454 00:25:58,760 --> 00:26:01,480 Speaker 1: in that bottom fifty of the US economy. Yeah, we 455 00:26:01,520 --> 00:26:05,359 Speaker 1: have corporate profits that are really high. A lot of 456 00:26:05,359 --> 00:26:08,000 Speaker 1: that money is going to shareholders in the form of 457 00:26:08,040 --> 00:26:10,600 Speaker 1: stock by bags and um we're minting a whole lot 458 00:26:10,600 --> 00:26:14,600 Speaker 1: of billionaires, and yet some of that profit could potentially 459 00:26:14,640 --> 00:26:17,600 Speaker 1: be going to increase wages, which would then elevate people 460 00:26:17,920 --> 00:26:20,760 Speaker 1: possibly into the ranks. Yeah, we briefly had that conversation 461 00:26:20,960 --> 00:26:23,480 Speaker 1: coming out of the pandemic about maybe this was labor's moment, 462 00:26:23,600 --> 00:26:26,800 Speaker 1: maybe people wages were going to rise. The problem is 463 00:26:26,840 --> 00:26:29,840 Speaker 1: they haven't kept up with inflation. And we know that 464 00:26:30,000 --> 00:26:34,080 Speaker 1: corporate profits have outstripped inflation in a lot of regards. 465 00:26:34,119 --> 00:26:38,480 Speaker 1: So the middle class, that bottom of the economy have 466 00:26:38,760 --> 00:26:42,960 Speaker 1: borne the brunt of inflation and companies have continued to 467 00:26:43,440 --> 00:26:45,520 Speaker 1: mint those profits. Now, we'll see what happens as we 468 00:26:45,520 --> 00:26:48,280 Speaker 1: go forward, as the economy slows down, as the FED 469 00:26:48,440 --> 00:26:51,320 Speaker 1: slows things down economy, what happens to corporate profits. In 470 00:26:51,359 --> 00:26:54,680 Speaker 1: a traditional recession, you would see those get squeezed and 471 00:26:54,920 --> 00:26:57,520 Speaker 1: people at the top gets squeezed as well. But the 472 00:26:57,560 --> 00:27:01,080 Speaker 1: sad fact of the American economy is when times get tough, 473 00:27:01,480 --> 00:27:03,440 Speaker 1: it's usually people at the bottom of the economy who 474 00:27:03,480 --> 00:27:07,120 Speaker 1: suffer most, and it's that pathway to the middle class 475 00:27:07,200 --> 00:27:12,199 Speaker 1: that gets broken. Is the idea of the middle class 476 00:27:12,640 --> 00:27:15,160 Speaker 1: still a relevant thing. Is it something that we should 477 00:27:15,200 --> 00:27:18,280 Speaker 1: be thinking about as a real segment of the economy 478 00:27:18,320 --> 00:27:21,560 Speaker 1: more than you know, a notion likes me right about this? 479 00:27:22,520 --> 00:27:25,880 Speaker 1: That's an enormous question. It's a really hard question to answer. 480 00:27:26,400 --> 00:27:29,000 Speaker 1: But I think one of the things we need to 481 00:27:29,000 --> 00:27:32,399 Speaker 1: remember is that the American middle class and the idea 482 00:27:32,440 --> 00:27:36,080 Speaker 1: of it, while it's been celebrated in popular culture, while 483 00:27:36,080 --> 00:27:39,840 Speaker 1: it's been celebrated in economics and so on, has always 484 00:27:39,880 --> 00:27:44,960 Speaker 1: been a morphous. It's always been self interested, and it's 485 00:27:45,080 --> 00:27:48,359 Speaker 1: also often been kind of exclusionary. You know, that middle 486 00:27:48,359 --> 00:27:51,240 Speaker 1: class in American popular culture is a pretty white middle 487 00:27:51,280 --> 00:27:55,560 Speaker 1: class through the years, and we know that some of 488 00:27:55,560 --> 00:27:59,800 Speaker 1: the key components of it, such as housing wealth, that 489 00:28:00,080 --> 00:28:03,720 Speaker 1: not all parts of the American population, the black population 490 00:28:03,720 --> 00:28:06,280 Speaker 1: in particular, have had the same access to that over 491 00:28:06,320 --> 00:28:09,000 Speaker 1: the years. So it may be time for us to 492 00:28:09,160 --> 00:28:12,800 Speaker 1: kind of park that idea and move on and think 493 00:28:12,880 --> 00:28:17,359 Speaker 1: more specifically about people's circumstances. That idea of renter versus homeowner, 494 00:28:17,800 --> 00:28:21,479 Speaker 1: that idea of college graduate versus high school graduate, uh, 495 00:28:21,560 --> 00:28:25,480 Speaker 1: that idea of a rural American versus an urban American, uh, 496 00:28:25,520 --> 00:28:28,080 Speaker 1: and so on. But you know, we may want to 497 00:28:28,119 --> 00:28:30,320 Speaker 1: have that debate, but I think Americans for a long 498 00:28:30,400 --> 00:28:33,360 Speaker 1: time are going to be identifying as middle class, are 499 00:28:33,359 --> 00:28:35,600 Speaker 1: going to have this aspiration to join the middle class 500 00:28:36,040 --> 00:28:37,440 Speaker 1: because at the end of the day, it's a pretty 501 00:28:37,440 --> 00:28:40,880 Speaker 1: good place to be. Sean, thanks so much for coming 502 00:28:40,920 --> 00:28:45,680 Speaker 1: on the show. 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