by MarkJ » Mon 19 Jul 2010, 06:34:56
While most of our family and friends have transitioned from middle class to upper middle class or wealthy, many of our local poor and lower middle class will likely remain poor the rest of their lives.
Most people in these classes lack the technical education, college education, professional licenses, certifications, skills, multiple skills, knowledge and experience necessary to find and keep well paying, full-time, long term jobs and/or to start their own businesses.
Many also lack the business connections and other human networking connections necessary to find jobs.
Many job seekers in these classes can't find good paying unskilled/low-skilled jobs since they lack reliable transportation, they can't pass pre-employment drug screening, background checks, credit checks and aptitude tests, plus they can't pass post-employment probationary periods and engineered labor/safety standards.
Even when the people in the lower classes luck into a good paying job, inheritance etc, most lack the budgeting/spending/saving/investment discipline and knowledge to maintain, or increase money and assets. Due to past debt, child support, court judgements, wage garnishments etc, much of their earnings service this past debt.
Many people in these classes also have spending habits that prevent them from accumulating money and valuable assets. They often spend their small paychecks on cigarettes, beer, scratch-off tickets, lottery tickets, prepaid cellular voice/data/text, cable, broadband, rent-to-own furniture/appliances/electronics, buy-here-pay-here vehicle financing, taxis, take-out, delivery, fast food etc.
We have employees that spend a substantial portion of their paychecks on taxis alone. Others that drive spend more than half of their paychecks on vehicle payments, gas, maintenance, insurance, repairs, registration, inspection etc.
Due to unemployment, under-employment, foreclosure, eviction, tax seizure, repossession etc, many are forced to sell the few semi-valuable assets they own for pennies on the dollar. When they buy them back, they often buy them with high interest financing. When they're laid off, or terminated, the buy-high-sell-low cycle repeats itself.
Since most people in these classes are renters, most of their paychecks go to landlords, plus heat, hot water and electric. Many of my rents have doubled since the 90s, but many of my tenants are making about the same money. After the expense or rent, natural gas, propane, heating oil, kerosene, electric etc, many don't have much money to save, or invest.
Many of the low income credit challenged residents rent older grossly inefficient apartments, so heating and cooling costs are much higher as well.
Property taxes are so high in some regions that many lower income people could barely afford the property taxes, let alone mortgage payments, insurance, maintenance, repairs, electric, heat, hot water, water/sewer etc.