Detroit Free Press: On the Short End of the Growing Income Gap Middle Class Pinches Pennies
Maurita Mussawwir, 36, wasn’t laid off during the recession. She’s an auto-industry survivor who has been able to hold on to an engineering job for 15 years. But when you ask her about the economy, all she talks about is the need to cut back.
“I’m holding on, but just barely,” said Mussawwir, who lives in Detroit. Since the recession, the mother of four children says she’s turning to penny-watching ways of family members who lived through the Great Depression. She has changed how she shops for groceries, focusing more on coupons; she has cut back on going out; she now even carefully considers the costs of prescriptions, too.
From her point of view, the purse strings are tighter for everyone in the middle class, as well as the poor. If you’re fortunate enough to get a bonus or raise, she said, it’s often not nearly as generous as in the past. People with good jobs have lost jobs.
Income inequality is as much about income instability for many families. The war on poverty in 1964 involved engineering ways to rescue families out of very dire situations. Now, the battle lines have moved, and even the middle class feels more under siege. The challenge today is what can be done to enable families to gain ground and move ahead economically.
“We know widening income and wealth inequalities damage our growth potential, especially when one considers loss of education and skills by large swath of population,” said Diane Swonk, chief economist for Mesirow Financial. “The problem and its cures, however, are much more complex than the sound-bite solutions that we seem to demand of our politicians.”
The Pew Charitable Trusts, for example, has discussed solutions that include universal preschool education where toddlers can build up their verbal scores and other skills, more emphasis on post-secondary education initiatives that enable low-income students to attend and complete college, and addressing the challenges of economic segregation within metro areas, such as Detroit.
Some experts discuss a widening racial wealth gap, too.
“Americans are feeling how financially fragile they are, even though they had this compact where playing by the rules was supposed to help them get ahead,” said Erin Currier, director of economic mobility research at the Pew Charitable Trusts.
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