U.S. Economy is hurting the working class

Daniela Benites
May 8, 2019 · 4 min read

Another day and another problem the working-class faces.

“We have to make sacrifices because the money is not getting any better and everything is going up,” Lanika Stephenson, 42, said. “We have to take two or three jobs or side jobs to even accommodate.”

The U.S. economy is said to be fluctuating, but the lower class doesn’t get any benefits from it.

Unemployment is in its lowest rate since the year 2000, inflation has fallen to 1.2 percent and the gross domestic product has grown. These characteristics are frequently said to describe today’s economy, but why is it even harder for the lower class to afford its lifestyle?

Well, the fact that there are more jobs doesn’t guarantee economic sustainability for anybody; the definitive factor is the wage. The U.S. Bureau of Labor Statistics’ April report shows that wages have only increased by 2.7 percent, making the weekly median salary of $905 for 116 million full-time workers in the beginning of 2019.

A study done by the Urban Institute shows that even with the unemployment being at its lowest level, 40 percent of non-elderly adults reported that they had economic hardships such as meeting basic needs like food and health care in 2017.

Tax Cut Effect on the Working Class

As it is known, two years ago, President Donald Trump signed the Tax Cuts and Jobs Act, which cut individual income taxes, but also doubled standard deduction and eliminated personal exemption.

Let’s take a glance to what that bill is from the lower-class standpoint.

If a single person files for a standard deduction of roughly $12,000, earns the median wage of $905, doesn’t get personal exemption, which means he or she doesn’t get tax money back, and still has housing bills, health care and basic-need expenses left, how can someone afford a lifestyle?

The answer is; they can’t.

“I don’t think I make a high enough income to benefit from the tax cut. I think those tax cuts serve more wealthy people.” University of Houston student Madison Alvis said.

The poverty line, according to the U.S. Department of Human and Health Services, is set at $12,000 for an individual, and $25,750 for a family of four.

Income Inequality

Over the last decades, the United States’ wealth disproportion has been pronouncing itself more. By 2017, the top 10 percent had averaged more than nine times as much income as the bottom 90 percent; in addition, Americans in the top one percent averaged over 39 times more income than the bottom 90 percent, a study by the Inequality Organization says.

Wages have remained disproportional as well. The same study shows that between 1979 and 2017, the bottom 90 percent of income earners have noticed a little increase of only 22 percent.

As a matter of fact, such income inequality draws a line into who can afford to pay for college and who cannot. Acquiring higher education has become one of the biggest difficulties the lower class has to overcome, whether it is by obtaining loans or paying for it out-of-pocket.

“Paying for college is my biggest burden financially,” Alvis said.

Additionally, numbers had shown that it’s unrealistic to say that only a minority of the population needs aid to pay for college, but that’s what the system implies. The federal financial aid system provides the most aid to the bottom 25 percent of income, according to the Biden Foundation.

“They give you this amount of money and you have to come up with the rest. How are you supposed to get an education if you don’t even make enough to pay for classes?” Stephenson said.

Psychological Consequences of Low Income

Research demonstrates that children who are raised in lower socioeconomic status have higher possibilities of facing parent-reported mental health problems and higher rates of unsatisfied basic mental needs. In an individual level, living in poverty is correlated with physiologic responses to stress such as changes in blood pressure and elevated cortisol levels, according to a study done by the National Library of Medicine.

The study also shows the effects of living in poverty on a community level. Families in this position are likely to experience debts, food insecurity and other factors that trigger stress. These stress agents can increase parental risk of mental health, which could lead to substance use, instead of the practice of positive parental impact that translates into responsiveness and nurture.

Valenti Voices

Houston, one of the most diverse cities in the U.S.,

Daniela Benites

Written by

Journalism student with an interest in immigration policies.

Valenti Voices

Houston, one of the most diverse cities in the U.S., is our home. Like our city, the students at the Valenti School of Communication bring a diverse, unique lens to their field of study. Valenti Voices highlights our students’ voices. Meet the next generation of storytellers.

Daniela Benites

Written by

Journalism student with an interest in immigration policies.

Valenti Voices

Houston, one of the most diverse cities in the U.S., is our home. Like our city, the students at the Valenti School of Communication bring a diverse, unique lens to their field of study. Valenti Voices highlights our students’ voices. Meet the next generation of storytellers.

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