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Urban Poverty and the Vanishing Middle Class

August 19, 2018

 Abandoned factory, Detroit, MI

Image courtesy of Seph Lawless, author of “Autopsy of America”, https://www.documentingreality.com/forum/f236/americas-rust-belt-139882/

There is a growing divide between rich and poor in this nation.  Caught in that divide is a vanishing middle class.

Median income levels in Bridgeport and Stamford, CT – cities just 22 miles apart – reflect the disparity.  Bridgeport’s median stands at $41,050.  Stamford’s is five times higher at $205,688 [1].

Lost Manufacturing Jobs

A large part of the reason is the decrease in manufacturing jobs.  Both automation and corporate relocation overseas have played a role in this.

As of June 2016, the average wage for manufacturing jobs in the United States was $64,400.  This compares favorably with an average wage of $48,700 for all occupations [2].

Map of United States showing “Rust Belt” states in red, Source Wikipedia (CC BY-SA 3.0 Unported)

But as many as 7 million manufacturing jobs have been lost since the 1980s [3].  Metropolitan areas in the “Rust Belt” (Michigan, Wisconsin, Indiana, Illinois, Ohio, West Virginia, Pennsylvania, and New York) have been particularly hard hit [4].

Today, many of the technical jobs that remain require advanced training or a college degree.  Alternative positions as home health aides, cashiers and retail sales personnel, housekeepers, child care workers, and food servers are among the lowest paid [5].

Urban Poverty

A. Detroit, MI

Once the nation’s auto manufacturing hub, Michigan has lost 83,000 manufacturing jobs over the past 15 years.  Detroit followed Chrysler and GM into bankruptcy [6].  The per capita income there in 2016 was $15,562.  The poverty rate is 39.4%.

B. Hartford, CT

Nicknamed the “Insurance Capital of the World”, Hartford was the wealthiest city in the nation following the Civil War.  But it has fallen on hard times since the 1990s.  The per capita income in 2016 was $18,365.  The poverty rate is 31.9%.

C. Rochester, NY

Formerly known as “Kodak Town”, Rochester, too, suffers from the drain of manufacturing jobs.  The per capita income in 2016 was $19,830.  The poverty rate is 32.8%.

Mayor, Lovely Warren, explains the situation this way:

“Many of the executives and the upper management that worked in…larger companies, they lived in the suburbs.  The people that lived in the city were those individuals that worked on the line…When manufacturing left…the decline in the inner-city, in those families losing their income and having to struggle, and then the next generation under them not having…a manufacturing floor to go into, became greater [7].”

No Easy Solutions

There are no easy solutions.  Not all individuals can pursue higher education.  Nor can all individuals become successful entrepreneurs.

A universal jobs program would have to identify the jobs for which workers are being retrained.  In a “service economy”, such as ours has become, there are fewer jobs with a viable future.

Corporate tax incentives shift the financial load to individuals, yet cannot guarantee the return of overseas jobs.  Even were all overseas manufacturing to return, job availability would continue to be undercut by automation.

A reduced tax burden on the middle class would help, but is unlikely to be achieved.  That would require difficult choices by Washington for which neither party has the political will.

A substantial portion of the American middle class is sliding inexorably into poverty.  Politicians can sense the rising panic, but have been unable to suggest any real answers.   Instead, they fan the flames of class, racial, and ethnic warfare.

Globalization

At the same time that globalization is shrinking the American middle class, it is expanding the middle class in India, Indonesia, and elsewhere [8][9].  Of course, in India those living on as little as $6-$10/day are characterized as “upper middle class”.

God’s Economy

God does not promise that He will shower believers with riches…or even preserve their middle class status.  Indeed, He tells us that it is difficult for a rich man to enter the kingdom of heaven (Matt. 19: 23-24).

God does promise to supply our needs.  First and foremost among these are our spiritual needs, for man does not live by bread alone (Matt. 4: 4).  In fact, the Bible teaches that we are to “count it all joy”, when we encounter trials, for these perfect our character (James 1: 2-4).

This does not mean that we are to be complacent in the face of social or economic injustice.  Difficult times give us the opportunity to care for others.

And my God shall supply all your need according to His riches in glory by Christ Jesus” (Phil. 4: 19).

[1]  Go Banking Rates, “Places in the US with the Most Income Inequality” by Laura Woods, 5/23/18, https://www.gobankingrates.com/making-money/economy/most-unequal-cities-in-us/.

[2]  Democrat and Chronicle (USA Today), “Made in NY?  Forget it, as state loses to others” by Jeff Platsky, 3/10/17, https://www.democratandchronicle.com/story/money/business/2017/03/10/upstate-new-york-manufacturing-decline/99018342/.

[3]  The Economist, “The manufacturing jobs delusion” by Buttonwood, 1/4/17, https://www.economist.com/buttonwoods-notebook/2017/01/04/the-manufacturing-jobs-delusion.

[4]  Policy by Numbers, Economic Development, “The Decline of Manufacturing in New York and the Rust Belt” by John Bacheller, 10/4/16, http://policybynumbers.com/the-decline-of-manufacturing-in-new-york-and-the-rust-belt.

[5]  Go Banking Rates, “22 Industries that Pay Less (and More) than They Did 10 Years Ago” by Elizabeth Nicholas, 7/27/17, https://www.gobankingrates.com/making-money/jobs/industries-pay-less-did-years-ago/.

[6]  Go Banking Rates, “20 Places that Have Gone Bankrupt” by Andrew DePietro, 6/4/18, https://www.gobankingrates.com/net-worth/bankruptcy/us-cities-bankrupt/.

[7]  Marketplace, “Rochester looks to rebuild from the rubble” by Kai Ryssdal, http://longform.marketplace.org/can-manufacturing-save-america.

[8]  Free Press Journal, “India’s Growing Middle Class” by Ryan Andreas, 5/3/18, http://www.freepressjournal.in/ucretail/indias-growing-middle-class-ryan-andreas-quantified-commerce/1270019.

[9]  Euromonitor International, “Income and Expenditure Indonesia:  The Country’s Middle Class Will Continue to Expand Robustly” by Roshni Wani Thapa, 10/12/17, https://blog.euromonitor.com/2017/10/income-indonesia-middle-class.html.

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11 Comments
  1. Excellent article Anna! Just in a short time span I’ve seen this taking place. I understand the unemployment numbers are skewed because many have stopped looking for work and don’t get included. It’s no wonder that Democratic Socialists are gaining speed. Even though that’s too far for me, they have the things to say that many poor, and young people need to hear.

    By the way, did you know there are fewer Republicans now? Especially young people have left in large numbers – as many as 30%. And there are more Independents now than Republicans or Democrats. Fascinating!

    And how do we explain the economy doing so well right now? Easy- rich people and corporations love our president or any conservative. I believe many conservatives see him as “our guy” regardless of what he does or says, which goes back to the idol worship of conservatism in our country instead of the Biblical concept of “love our neighbor”.

    Peace my friend.

  2. I have a blogging friend who lives in Rochester and he says it’s bad. He is a Kodak man but one of the few left.

  3. Wow, good post. Informative and eye opening. The rate of poverty in the cities you mention is staggering

  4. Great post Anna!
    I am considered low income, and the Lord surely provides.
    Garden gleaning and frugal spending are a blessing.
    I did not realize how many go hungry in the U.S. I thought social programs fed them.
    California is trying the universal income experiment, I wonder how that will turn out..

    • Jesus said the poor will always be with us (Matt. 26: 11). Unfortunately, where socialism has been tried it has been associated with as many abuses as capitalism, if not more. The problem is human nature.

  5. znoxide permalink

    This is a great and depressing post. I’ve worked in aircraft manufacturing for nearly 20 years and the industry fell on hard times about 10 years ago. It is starting to recover. Over the last 5 years I’ve somewhat passively applied for jobs within the sector with little success. Although last month recruiters have been aggressively contacting me to the point that I’m actively engaged in seven opportunities. My resume and experience hasn’t drastically changed. The only thing that has changed is the climate for manufacturing.

    While a “service economy” is nice, it basically circulates existing money within an area. Manufacturing produces something of value that brings money in from someplace else. I hope that we are able to fully transition back to a manufacturing economy because the jobs tend to have higher wages and a wider range of wages.

    • I fully agree w/ you: “Manufacturing produces something of value…” There is great pride in that. I hope your job search is successful soon.

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