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Working families: We're still struggling

When Vice President Al Gore incorporated "working families" into his rhetoric last month and "hard-working middle-class families" this month as pivotal campaign phrases, he pointed a finger _ unintentionally perhaps _ at a central fact of American life: Most of the nation's 72-million families feel they cannot make ends meet.

Three-quarters earn less than $75,000 a year and 45 percent of all families earn $30,000 to $75,000, the range of middle-class incomes in most of the United States.

No one argues that middle-income families cannot put food on the table, pay the mortgage, own a car or two, take a modest vacation. What stresses them, sociologists and economists say, are the other outlays of middle-class life: new clothes, child care, lessons for the children, restaurants, movies, home decoration, computers, big-screen televisions, stereo systems, Christmas gifts, and saving for college and retirement.

" "Working families' is a code phrase with a variety of meanings, and one is middle-class people trying to live only on wages, not earnings from investments," said Barrie Thorne, a sociologist and the co-director of the Center for Working Families. "They can't do it, and they feel nonaffluent and not adequately compensated for the number of hours they must work to make ends meet."

They are people like Tracey and Carrie Jones, who live with their two sons in Madeira, Ohio, a Cincinnati suburb. Tracey Jones' $45,000 salary as a designer of labeling machines rose from $40,000 in 1996, when his company elevated him to permanent employee, with health insurance, from temporary status, thanks to the booming economy and tight labor market.

The family's credit-card debt is shrinking, partly because of Tracey Jones' higher income, but also, Carrie Jones says, because of her newly developed resistance to impulse buying.

But unanticipated expenses force the Joneses to dip periodically into $600 in cash savings, or to overcharge on credit cards. August was such a month. A car alternator had to be replaced, for $143. Carrie Jones, who is 38, decided, while shopping at a Sam's Warehouse Club, to spend $250 to stockpile packaged snack food for school lunches. "That purchase was a mistake," she said. The semiannual $315 car-insurance premium came due. And the credit-card bill somehow jumped to $450.

So Carrie Jones, who already works two evenings a week for a dentist, earning $4,500 a year, has taken a second job, washing dishes two days a week, four hours a day, at her sons' school, earning $41 a week. "I had volunteered in the cafeteria and I knew a lot of the women, and they asked me if I wanted to work there," she said. "It is hard work . . . , and I am exhausted when I get home."

Gore says his tax breaks and spending proposals would enrich this broad swath of middle-income families whose incomes had languished for more than 20 years, through Democratic and Republican administrations. Gov. George W. Bush's camp increasingly insists that his tax proposals include significant cuts for this group, too.

Whatever the merits of their various arguments, the emphasis has clearly shifted. Until Gore made a point of helping "working families" and then the relabeled "hard-working middle class," the Clinton administration had pushed a different emphasis. The president spoke repeatedly of "unprecedented prosperity" that Americans enjoyed from economic expansion that gathered steam in the late 1990s.

And families are doing better. Incomes, adjusted for inflation, had plunged in the early 1990s for all but the wealthiest 20 percent. Now the lost ground has been recovered, and then some. Median family income _ half of the nation's 72-million families earn more and half less _ is likely to pass $47,000 when the Census Bureau announces the 1999 number late this month; it was $46,737 in 1998.

The gain is small potatoes compared with the last high point, $44,974 in 1989 _ the increase since that year is about $2,000, or 4.5 percent. But 1993 provides a more optimistic comparison. That year was the low point for family income in the 1990s, only $41,691 adjusted for inflation, and the improvement since then is a much more respectable $5,300, or 12.7 percent.

"Middle-income families are definitely a few dollars ahead of where they were, and they are happy to be there," said Jared Bernstein, a labor economist at the Economic Policy Institute and a co-author of the institute's newly updated biennial analysis of work in the United States. "People are more likely today to hold full-time jobs with health insurance than part-time or temporary work, without benefits. But the stock-market boom has not reached middle-income families in any important way, and while family income is up, so is family debt and hours spent at work."

Rising hours, in fact, have done more than rising wages to push up family income, and stress. From 1995 through 1998, the latest year for which figures are available, members of middle-income families added 70 hours a year on average to their work time, or nearly 1.8 additional weeks. From 1989 through 1998, the increase in work time was 3.4 weeks _ often run up by people like Carrie Jones, supplementing a spouse's wages.

"I once read in the Reader's Digest that families can't make it on one income, because we want so much," she said. "I think that is true."

The income from all the additional hours has lifted some families beyond the $75,000 that pollsters find to be the minimum that a family of four feels it must have to afford a middle-class life.

"In the New York metropolitan area, you can have six-figure family incomes and still feel like you are struggling," said Geoffrey Garin, president of Peter Hart Research Associates. Still, families with earnings above $75,000 are the ones most likely to tell pollsters that they earn enough to lead the life they want to lead, says Andrew Kohut, director of the Pew Research Center.

Vicki and James Stogdill in Des Moines, Iowa, are in the above-$75,000 category, paying all their bills from their incomes and saving money. They hope to build a larger house on a suburban lot they have bought, now that they have paid off the mortgage on their current three-bedroom home.

But the $90,000 a year that they take home from Stogdill's TV and Appliances, the family business they now own and operate, comes at a price that Vicki Stogdill resents. "If I could, I would get out in a heartbeat," she said.

But they cannot get out, they say. In the tight labor market, they cannot find or afford the people to do all the tasks they do. So they put in 110 hours a week, he from 7 a.m. until 9 p.m. as the general manager, running the sales and repair operations, and she from 9 a.m. to 5 p.m. as the administrator.

James Stogdill's father started the business in 1957, and Stogdill, who is 43, remembers an easier pace in earlier days, when his father would close the store periodically for a week or so of vacation. The arrival of giant discounters, competing for sales, put a stop to that.

If anything, the booming economy has increased the pressure on the Stogdills to work long hours, and Vicki Stogdill, who is 35, handles child care by taking the couple's only child to the store.

Jonathan, now 15 months old, is growing up in a playpen in his mother's crowded office.

The sense of "fulfillment in shaping my child" is the reason Vicki Stogdill keeps Jonathan with her. And the savings in child care, a major cost for middle-income families, helps to keep the Stogdills in the black. So does their frugality, which surprises people aware of their income, Vicki Stogdill said.

"The prosperity that I keep hearing about is not what keeps money in my bank account and my bills paid every month; it is the fact that we are spending carefully," she said. "If I don't need new shoes, I don't buy them. Most people do. We drive old cars. We do spend $800 a month on takeout food and restaurants, because we work so many hours. And we tithe at the church, $6,000 a year. But we have not gone out and built the new house yet. Bankers are trying to loan us the money. They tell us we are nuts, build it now. But we want to wait until the loan for the lot is paid off."

Ronald and Rhoda Wright, in Bloomington, Ind., have grown similarly cautious since she was laid off in 1998 from a TV assembly plant in Bloomington. Thomson Consumer Electronics closed the plant and moved the operation to Mexico.

Most middle-income people have only a high school education or a year or two of college, and the Joneses, Stogdills and Wrights fall into this category. Still, the booming economy has generated plenty of $7- and $8-an-hour jobs for people with this level of education, and Rhoda Wright, who is 50, said she could have easily jumped into one.

"That is not a livable wage," she said.

Instead she used $13,000 in severance pay to reduce family debt and enrolled in a two-year bookkeeping course. She collected $236 a week in unemployment insurance for 18 months, which supplemented her husband's $36,000 salary as a maintenance worker at Indiana University.

"I was never a big shopper," she said, "but I spent on birthdays and Christmas for my two daughters and two grandchildren. If we were out for a drive and I saw something I liked, I bought it."

Graduation with a bookkeeping degree came last spring and, still resisting the $8-an-hour offers _ even $9 _ Wright finally started last month at Hoosier Advertising. There she handles accounts receivable and outgoing payments, at a salary of $26,000, the equivalent of $12.50 an hour.

There will be some renewed spending _ a $7,500 metal shed, for example, to house her husband's tractor on their small spread. But most of her income will be used to replenish the family's savings. "We probably went from $30,000 to $1,700 to support ourselves while she was in school," Ronald Wright said.

At 55, he hopes to retire in two or three years, although starting 18 months after he retires and until he qualifies for Medicare at age 65, he will have to spend $800 of his $1,200-a-month pension for health-insurance premiums. "That is highway robbery," he said, "but I have worked at the university for 34 years and I am not going to stay another 10 years."

Ptosha Ford, a 30-year-old nurse and instructor of nurses at Memphis Hospital School of Nursing in Memphis, Tenn., earns $36,000 and is single. But the costs that squeeze middle-income families squeeze her, too, she said, and for two years now, she has taught nursing part-time at a community college, adding $10,000 a year to her hospital income.

"To me that is still not enough," she said. Until last fall, she had lived with her parents, an arrangement that she said impinged on her independence. Rather than rent, Ford moved directly into her own home, which she had built for $118,000 in a new suburban development. A mortgage rate of only 5.27 percent keeps her monthly house payments, including property taxes, at $850, roughly the cost of renting an apartment in Memphis, she said.

It is the other costs that get her: car insurance, a cell phone, a beeper, cable television, beauty parlor and nail salon, gasoline, groceries, dry cleaning, home security, Internet connection, pension contribution, health insurance. As a preacher's daughter, she tithes $300 a month. And there are the credit-card bills, which average $500 a month.

Taxes are a sore point with Ford. "I don't agree with high income taxes," she said, "and I feel like Social Security won't exist when I retire."

Ford said Bush might do more than Gore to lower her taxes and to resolve the Social Security problem, but she is voting for Gore. "He is from my home state," she said.

The voting preferences of the Wrights, the Stogdills and the Joneses seem similarly disconnected from their experiences as middle-income families. The Wrights, union members, normally vote Democratic, and are leaning that way now. The Stogdills, conservatives, are voting Republican. And the Joneses, who approve of some of the income relief that Gore proposes, make abortion their priority issue. They are against it, and voting for Bush.