RAY SUAREZ: Tonight, we focus on the plight of America’s middle class. In her latest book, “Not Keeping Up with our Parents,” journalist Nan Mooney argues that the middle class is having an increasingly difficult time making ends meet, a problem that has only gotten worse with the economic downturn.
She joins us now.
And, Nan Mooney, your book is loaded with that cherished American dream, that hope, that expectation that the children’s generation will always live better than its parents. Has something fundamentally changed?
NAN MOONEY, author: I think something has fundamentally changed for a large sector of the population. We’re now looking at people with good educations and good jobs whose wages have stagnated.
Meanwhile, the costs of everything for them has gone up, so they’re paying more for housing, they’re paying more for that education, they’re paying more for child care, for health care. And so, suddenly, they don’t have the means to do as well as their parents did.
RAY SUAREZ: Both in the stories that you presented and in the hard numbers, there was a feeling that propelling your kids into a better life and taking good care of yourself, too, was becoming unsustainable. Has it?
NAN MOONEY: It’s become very difficult. And one very interesting factor, too, was that I was talking to people not only who came from middle-class households, but who came from working-class households, who were saying, “You know what? I’m not even doing as well as my working-class parents were doing.”
RAY SUAREZ: Nan, did you speak to someone in researching the book whose predicament kind of sums up all that you were writing about?
NAN MOONEY: You know, it’s — obviously, everyone’s individual stories are very different, although they have these common themes, but there was one woman I spoke to who really stuck in my mind.
And she was a mother of two children. And she and her husband were both employed. And she actually was paying more money for childcare than she earned from her job.
But because there were no benefits offered through her husband’s work and there were benefits offered through hers, she actually had to hang on to that job. She was essentially paying them to keep her on so she could hold on to those benefits.
And I think those kinds of choices really epitomize the position a lot of middle-class families are finding themselves in, something we couldn’t imagine a generation ago.
Debt problem is endemic
RAY SUAREZ: So what has this latest economic downturn, the troubles right now that we see in the housing market, in wages for working people, how has that affected families that are already on the edge?
NAN MOONEY: Well, I mean, exactly what you said. They're being asked now to tighten their belts, and there simply aren't any notches left, so that I think what we're going to see is people going into a huge amount of debt.
They were already in debt. There's nowhere else to turn. And so the credit card debt, the mortgage debt, all that is going to get even worse.
RAY SUAREZ: So that's what's fueling these, for instance, unprecedented bankruptcy numbers?
NAN MOONEY: Absolutely. And we're seeing more and more middle-class people who are going into bankruptcy or having their homes foreclosed on, because they are spread so thin.
You know, if it was one thing that they were dealing with, say, that the housing prices had gone up or they were needing to pay more for childcare or health care, it was just one of those things, maybe you could adjust and find a way to manage.
But when it's all of those things, there just simply isn't enough money. You're not earning enough as a teacher or a nonprofit worker or many, many middle-class jobs.
RAY SUAREZ: If you pick up the newspapers, both in the business pages and in the editorial pages, it's not hard to find articles and essays that scold that class that you write about for not doing the very things their parents did in order to propel them forward. Be frugal. Watch your nickels and dimes. Don't use your house like a piggy bank. Are they right?
NAN MOONEY: Well, certainly that is a small factor, but I don't think that we can lay the blame entirely at the feet of the individuals. There are economic policies that are hurting them, too.
And most of the people I talked to, they weren't frivolous. They weren't spending their money on a last-minute trip to the Bahamas or four flat-screen TVs. And, in fact, the statistics show that consumer spending is not any higher now than it was in the 1970s.
We're spending differently, but we're not spending more. We are being asked to spend more on fixed costs, things like mortgages, like childcare, like health care, and that's a critical shift, because, of course, if you're overspending on clothes or furniture, you can cut back. It's easy to say, "OK, this month, we're not going to go to the mall or we're not going to go out to eat."
But you can't say, "Oh, we're just going to skip that mortgage payment." You have to find a way to come up with that money.
Stressful future lies ahead
RAY SUAREZ: So what kind of young adult years are ahead for the children that some of these families are so anxious about propelling forward?
NAN MOONEY: It's going to be very, very financially stressful, starting right away with paying for college. A lot of these parents, they don't have the means anymore to put money aside to pay for their children's educations.
In fact, I spoke to a number of people who said, "You know what? We're not going to be able to help our kids with college because we're still paying off our own college debt."
RAY SUAREZ: So this tremendous disappointment comes across in a lot of the first-person testimony of the people in your book, that people thought they would be doing better, that they expected they would be doing better. Are there any solutions on the horizon?
NAN MOONEY: I hope there are solutions. And I think that we have to move on two fronts, both as individuals and in a collective way, so as individuals we can be very honest with ourselves about our financial position.
And it may not be as strong as we had hoped and expected it would be and to say, "You know what? It's not your fault. It's not something to be ashamed of or embarrassed about," but that you really need to do your very best to live within your means.
And at the same time, I think we do need to be looking collectively at what kind of social safety nets can we develop, for everyone from the middle class on down, because these certainly aren't new issues. They are newly hitting the middle class, but they've been around for low-income families for a long time.
So I think we need to push towards a better health care system, more help with college tuition, more help with childcare and family leave, and all those issues.
RAY SUAREZ: But does this mean, bottom line, lowered expectations for tens of millions of Americans in the coming decades?
NAN MOONEY: I think it does, unfortunately. That's certainly not the way we like to think of this country, but that is the position we've gotten ourselves into.
RAY SUAREZ: The book is "Not Keeping Up with our Parents," Nan Mooney, thanks for joining us.
NAN MOONEY: Thanks so much, Ray.