EagleTribune.com, North Andover, MA

October 28, 2012

Middle class is being squeezed in an economic vise

By Bill Kirk bkirk@eagletribune.com
The Eagle-Tribune

---- — Call it the Middle Class Squeeze of 2012.

“The rich are getting richer, the poor are getting poorer, and everyone in the middle is getting squeezed,” said Brent Farrington, 30, of Haverhill, as he filled his gas tank at Haffner’s on Route 125 in North Andover this week. “Wow, that’s a lot,” he added, as his tank filled up and the final price rang up on the pump.

Farrington, who said he considers himself a “lucky” member of the middle class because he has a good job, said that for most people, the cost of the necessities of life, like gasoline and food, keep going up while wages are leveling off or going down.

He, and many others, sees next month’s election as critical to them, and the country’s future.

“What they do does affect me,” he said, referring to the president and Congress, adding that he supports President Obama’s plan to tax the rich and stimulate the economy using federal money.

Mariann Vetere, 55, of Andover, has a different view.

“If something doesn’t change, we’ll go bankrupt,” she said, while shopping recently at Market Basket in North Andover. “There’s too much pressure on the middle class to pay for everyone else’s needs.”

Her husband’s business — an architectural design firm based in Reading — has shrunk from 15 to five employees, with skyrocketing costs for employee health insurance, as required by federal health care guidelines.

“If they (the country’s leaders) don’t help small businesses, the economy is in a lot of trouble,” she said, adding that she supports Mitt Romney’s plan to reduce business tax rates and get rid of Obamacare, which she said is strangling small businesses like her husband’s.

Experts agree with both of them.

Throughout the election, Obama and Romney have repeatedly mentioned the middle class, and their concern for it. Obama has called himself a “warrior for the middle class.” Romney has said tax cuts on small businesses amount to a tax cut for the middle class.

The constant references to the middle class are a safe bet for both candidates, especially during tough, economic times, according to Joshua Dyck, an associate professor of political science and co-director of UMass Lowell’s Center for Public Opinion.

“Just about everyone sees themselves as middle class, and you want to appeal to the majority of voters,” he said. “It’s an easy way to talk to a lot of people at the same time.”

He said the notion of the middle class “stands for the idea that Americans can be independent, buy a home, have a white picket fence and be self-sufficient. American Dream rhetoric underlies this notion of middle class.”

He said when candidates talk about the middle class getting squeezed and hammered, “it’s a way of generalizing the economic experience of most Americans. ... No one is against the middle class, so everyone is for it. It’s like being against democracy.”

How that translates into policies and plans is important for candidates trying to communicate complicated ideas.

“Romney’s plan of cutting taxes and closing loopholes — is that the right plan?” he said. “Or is the better approach by Obama — where government invests in technologies and new ideas, while also cutting taxes for the middle class and asking the wealthy to pay more?”

“It all becomes part of the narrative of the campaign,” he added. “What should government do, and how should it act? The election is about Middle America, Main Street vs. Wall Street — and has evolved into how to help middle-class families.”

Rich Padova, a professor of world geography, government and politics at Northern Essex Community College in Haverhill, said he doesn’t think most politicians even know what the term middle class means. And that’s partly because, he said, it means different things to different people.

“It encompasses some gray area, and is ambiguous even to politicians,” he said. “It exists in some form, but from country to country, it can mean different things. It also depends on where you live in the United States. It’s flexible.”

He said that one-quarter to two-thirds of the world’s population could be considered middle class, “depending on the statistics you’re looking at.”

While the Obama and Romney campaigns have indicated that the middle class consists of any family that makes under $250,000, others see that number as too high.

“That’s over-reaching,” Padova said. “If I were making $250,000, I’d consider myself upper-class.”

He said a more realistic salary figure for a middle class family is $50,000 to $100,000.

But he said there are qualifiers, such as a family’s debt burden, or whether their mortgage is underwater — meaning the value of their house is less than the amount of their mortgage.

“There are extenuating circumstances,” he said. “It’s a very subjective term.”

Bill Ryan of Ryan Financial Services in Andover agreed.

“If you live in Detroit and you’re making $100,000 to $125,000, you have an entirely different lifestyle than if you live in Andover or Weston,” he said. “It all depends on where you are. You can go to the Midwest and for $100,000 you can buy a 5,000 square-foot home in a beautiful neighborhood,” he said. “In the Boston area, we’re talking $600,000 to $700,000 for the same house.”

To people in the area, struggling to make ends meet, none of that really matters, says Earl Zimmerman, 52, a CPA from North Andover.

He said his business, now run by his son, has long-time clients who are barely making it, despite healthy incomes and strong business plans.

“People are jammed,” he said, noting that some clients are just “a wrong ladder-step away from total ruin.”

“You hear about the middle class,” he said. “It’s about small businesses. Shops with five to 20 people are driving this economy. I don’t view the middle class as a price range, it’s complicated, it’s people working for a living. It just call it ‘working people.’”

He said people are struggling at $150,000, particularly self-employed people, or those who own their own businesses. They pay a high tax burden, health care coverage for employees, disability insurance, life insurance and other costs.

He added that because they own their own homes and make a decent wage, they don’t qualify for many of the benefits that lower income people can take advantage of, such as college scholarship money.

Meanwhile, the wealthy people in this country don’t need the help, and in some cases are making more money than ever.

“It’s the ultimate squeeze,” he said.

A number of people interviewed for this story agreed with that sentiment.

Joyce McLaughlin, 62, of Methuen, said people making over $50,000 a year don’t get any benefits, while people making less than that get all kinds of help.

“They get food stamps and all that,” she said, while loading groceries into her daughter’s car at Market Basket earlier this week. Meanwhile, hard-working people like her daughter Jessica and son-in-law both have jobs while supporting two children.

“I’m a nurse, my husband’s a correctional officer, and we see people with full carts of free groceries ... while we have to pay for a few bags,” said Jessica McLaughlin, 29.

Gus Flanagan, 63, a retired Methuen police detective now living in Salem, N.H., said the middle class is “getting squeezed between the wealthy and everyone else.”

Shopping recently with his son at Mann Orchards in Methuen, Flanagan blamed Obama for giving away too many benefits to people, including illegal aliens, and not looking out for the middle class.

“The middle class gets squeezed by everyone but it will be a little better under Romney,” he said.