The Collapse of the Middle Class

"About a month ago on my Web site, I requested that Vermonters e-mail me about what the collapse of the middle class means to them personally--not in esoteric economic terms but in a sense of what they are going through," Senator Bernie Sanders said in a speech to the Senate reciting some of the more poignant e-mails - you can watch the video here "Frankly, our people are pretty reticent. People in Vermont don't like to open

"About a month ago on my Web site, I requested that Vermonters e-mail me about what the collapse of the middle class means to them personally--not in esoteric economic terms but in a sense of what they are going through. Frankly, our people are pretty reticent. People in Vermont don't like to open up and tell everybody all of the problems they have. They try to keep it to themselves. We expected that we would receive perhaps a few dozen replies. In fact, over the last month, we have received some 700 e-mails that came into my office talking about how people in the middle class today are trying desperately to survive. I sometimes think that many of our colleagues here really don't have much of a clue about what is going on in the real world. It is no great secret that the halls of Congress are filled with lobbyists who make hundreds of thousands of dollars a year representing the energy companies, the coal companies, the oil companies, the drug companies, the insurance companies, the banks, and the credit card companies…It is far too rare that we hear the pain and the reality of life that is going on among ordinary people," Senator Bernie Sanders said in a speech to the Senate reciting some of the more poignant e-mails - you can watch the video here.

What I wish to do is spend most of my time doing nothing more than just reading to my colleagues and for the American people some of the reality that takes place in a small, rural State which I think is not radically different from what is taking place today all over this country. All of these are verbatim e-mails that I received from families in the State of Vermont. Let me begin by reading one which says:

I make less than $35,000 a year and work hard to earn it. I am trying to get by with rising costs of fuel. I have a wife and four kids that I love dearly and I am trying to do the best that I can for them. With the cost of gas pushing $4 a gallon and the price of heating oil up to over $4 a gallon, it is hard to make ends meet. On top of that, the furnace that heats the house and keeps my kids warm died today, and while it will not need to run much longer, the nights are still too cold for a 3-year-old. I am not sure how I am going to pay for the repairs. I never thought that I would be classified as poor having grown up in an upper middle class family, but that is where I am now. I don't know what we need to do, but I know we need to do something before the middle class is a thing of the past.

As I read these stories, what you are going to hear today in the year 2008 is that children are going cold in America, and we have to understand that. This is one example. I will read more. Anyone who thinks it is not true doesn't know what is going on in the real world. Here is another e-mail that I received:

I am a teacher with 20 years of experience, and I have a master's degree. As a single parent, I am struggling every day to put food on the table.

This is a teacher with a masters degree.

Our clothes all come from thrift stores. I have a 5-year-old car that needs work. My son is gifted and talented. I tried to sell my house to enroll him in a school that had curriculum available for his special needs. After two years on the market, my house never sold. The property taxes have nearly doubled in 10 years, and the price of heating oil is prohibitive. To meet the needs of my son, I let the house sit and moved into an apartment near his high school. I don't go to church many Sundays because the gasoline is too expensive to drive there.

Now, I wonder how many people all over this country are facing that same reality. I will read right from her letter:

I don't go to church many Sundays because the gasoline is too expensive to drive there.

Every thought of an activity is dependent on the cost. I can only purchase food from dented can stores. I don't know how I can continue this way for two more years of my son's high school; yet, I am trying to meet his academic and psychological needs. I know that I will never be able to retire on a teacher's retirement with no insurance. I am stretched to the breaking point, with no help in sight.

That is a teacher with a master's degree. This is not somebody who is unemployed, who never graduated high school. This is solid middle class. This is her reality.

Here is another story:

My wife and I live in rural Vermont. We own a home and make about $75,000 a year combined.

That is, in Vermont, not a bad income.

We own two vehicles and travel about 74 miles a day roundtrip to get to our jobs. Not only is the price of gas killing us, I have been displaced from two jobs in the last nine years due to the exportation of jobs overseas. My current job is in jeopardy of being downsized due to the economy. Every job I have had since I moved here in 1999 has paid less, with less benefits. We are spending our life savings just to make ends meet.

When you read these stories, you hear recurring themes: The price of gas and people losing jobs due to outsourcing. Over and over again, these themes appear. I want to reiterate that these are not poor'' people, homeless people, people without any education. These are people who once considered themselves to be part of the American middle class. Similar to millions and millions of other people, that middle-class life is rapidly disappearing.

Here is another one:

I work full-time at the largest hospital in Vermont. I am in more debt now than I was 10 years ago as a single mother going full time to college and waitressing to make ends meet. When is something going to be done to lower gas prices, which have exponentially raised the cost of everything? I would love to just tell my children, Yes, we can go out to the movies'' and not have it break the bank.

In other words, what you are seeing all over this country is for people who take a ride to church or go to the movies, they can no longer perform these basic joys of life because they cannot afford to do that anymore.

Here is another letter:

My husband and I have lived in Vermont our whole lives. We have two small children (a baby and a toddler) and felt fortunate to own our own house and land, but due to the increasing fuel prices we have at times had to choose between baby food, diapers, and heating fuel. We've run out of heating fuel 3 times so far, and the baby has ended up in the hospital with pneumonia 2 of the times. We try to keep the kids warm with an electric space heater on those nights, but that just doesn't do the trick.

My husband does what he can just to scrape enough money for car fuel each week, and we've gone from 3 vehicles to 1 just to try and get by without going further into debt. We were going to sell the house and rent, but the rent around here is higher than what we pay for our monthly mortgage and property taxes combined. Please help.

This is the story in America in 2008--a family not having enough heat and their child getting pneumonia. This is the United States of America in 2008. She asks, Please help.'' Well, let's help.

This is from north central Vermont:

Due to illness, my ability to work has been severely limited. I am making $10 an hour and if I am lucky, I get 35 hours a week of work. At this time, I am only getting 20 hours as it is off season'' in Stowe.

That is a major recreation area in Vermont.

It does not take a mathematician to do the figures. How are my wife and I supposed to

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live on a monthly take home income of less than $800. We do it by spending our hard-earned retirement savings. I am 50 and my wife is 49. At the rate we are going, we will be destitute in just a few years. The situation is so dire that it is all that I can think about.

Listen to this:

Soon, I will have to start walking to work, an 8 mile round trip, because the price of energy is so high it is that or go without heat.

In the United States of America, in 2008, somebody will be walking 4 miles to work and 4 miles back. The alternative is not having enough money to heat their home.

As bad as our situation is, I know many in worse shape. We try to donate food when we do our weekly shopping, but now we are not able to even afford to help our neighbors eat. What has this country come to?

Imagine that, having to walk 4 miles to work, and they donate food for other people who are worse off than they are.

Here is one from a single mother in a small town in southern Vermont:

I am a single mother with a 9-year-old boy. We lived this past winter without any heat at all.

In Vermont in the wintertime.

Fortunately, someone gave me an old wood stove. I had to hook it up to an old, unused chimney we had in the kitchen. I couldn't even afford a chimney liner (the price of liners went up with the price of fuel). To stay warm at night, my son and I would pull off all the pillows from the couch and pile them on the kitchen floor. I'd hang a blanket from the kitchen doorway and we'd sleep right there on the floor. By February, we ran out of wood and I burned my mother's dining room furniture. I have no oil for hot water. We boil our water on the stove and pour it in the tub. I'd like to order one of your flags and hang it upside down at the capital building. We are certainly a country in distress.

This is a gentleman from another town in southern Vermont:

I make less than $35,000 a year and work hard to earn that. I am trying to get by with the rising cost of fuel. I have a wife and four kids that I love dearly and am trying to do the best I can for them. We do receive help from the State, but I would like to be able to make it without that help.

He would like to do it without that help.

With the cost of gas pushing $4 a gallon and price of heating oil up over $4 a gallon, it is hard to make ends meet.

On the top of that, the furnace that heats the house and keeps my kids warm died today, and while it will not need to run much longer this winter, the nights are still too cold for a three year old, and I have next winter to look forward to. I am not sure how I am going to pay for the repairs.

Here is another from a woman from a small town in central Vermont:

My husband and I followed all the rules. He grew up in urban projects and went into the military with Vietnam service so he could get GI Bill benefits and go to college. I grew up picking strawberries as a migrant worker but had a mother who so pressed education that I was able to go to college on scholarship and by working full time nights in a mental hospital. My husband and I worked hard to buy a home, maintain good credit, even taking government jobs because we truly wanted to help others. I became disabled and unable to work, but we managed to live a middle class life on one salary.

Slowly, though, we have sunk back to the poor'' days. Our heating oil bill, gas prices, food prices--well, you know the story. Even a pizza is a splurge now. The interest on our meager savings doesn't seem worth keeping the money in the bank. We're so much more fortunate than many others, since we can still meet our bills, but we're scared that we will drop beneath that level soon. It doesn't seem right that after working hard and following all the rules for our lives, now, at 60, we're tumbling down.

Here is an e-mail from a Vermonter from a small town near the New Hampshire border:

Dear Senator Sanders : First, let me thank you for all of the support and rallying behind the middle class you have done. I, too, have been struggling to overcome the increasing cost of gas, heating oil, food, taxes, etc. I have to say that this is the toughest year, financially, that I have ever experienced in my 41 years on this earth. I have what used to be considered a decent job. I work hard, pinch my pennies, but the pennies have all but dried up. I am thankful that my employer understands that many of us cannot afford to drive to work five days a week. Instead, I work three 15-hour days. I have taken odd jobs to try to make ends meet.

This winter, after keeping the heat just high enough to keep my pipes from bursting (the bedrooms are not heated and never got above 30 degrees), I began selling off my woodworking tools, snowblower (pennies on the dollar), and furniture that had been handed down in my family from the early 1800s, just to keep the heat on.

Today, I am sad, broken, and very discouraged. I am thankful that the winter cold is behind us for a while, but now gas prices are rising yet again. I just can't keep up.

This is from a mother in a town near the Canadian border:

I am a single mother of 4. Each day the struggle becomes more difficult. Thank goodness for Spring. My last oil delivery was $500. I spend over $200 a month on gas just driving back and forth to work (approximately 300 miles a week).

Sometimes what some of my colleagues don't understand is that in rural parts of America, people don't walk to work, they don't take a car ride of 5 minutes. Sometimes people drive 50 miles to work. Sometimes they drive 100 miles to work. When gasoline costs $3.70 a gallon, every nickel of the pay raise they may have gotten goes right into that gas tank.

We have cut our budget again and again. There is little left to cut. Spring and Summer brings a respite from the fuel bills of winter, but I worry what next winter will bring. I will have to dig into my small 401(k) to make some home repairs this summer. Money that had been set aside went to fuel, an electric bill that increased by 14%, and food.

I read these letters because sometimes in the middle of the debates we have here, everybody is spouting off all kinds of facts and figures and ideas. I thought it important to bring a little bit of reality of what is going on in middle-class Vermont. I have to say I doubt very much that it is any different than middle-class New Jersey or any other State in this country. People are hurting. Poverty is increasing. The middle class is collapsing. The only people in our economy who are doing well are the people at the very top, and they are doing extremely well.

Many of the stories we have heard deal with high energy prices. I believe that what happened is that while the middle class has been shrinking for many years now, these high energy prices have resulted in a lot of people now dropping over the cliff. They were struggling and trying to keep their heads above water and, suddenly, out of nowhere, comes $3.70 for a gallon of gas and $4 for home heating oil. That has taken them over the edge.

That is one of the reasons 82 percent of the American people think our country is moving in the wrong direction. What do we do? There is a lot we can do.

Let me focus on energy. The good news is that today, thankfully, 97 Senators voted to stop the Bush administration from continuing the absurd policy of adding 70,000 barrels of oil a day into the Strategic Petroleum Reserve, which is already 97 percent full. Is that going to result in a precipitous drop in gasoline prices? No. Will it help? Yes. I applaud my colleagues for doing that.

I find it interesting that 97 of our colleagues voted for this today, when 2 or 3 weeks ago we were wondering whether we had the votes to get this through. I think many of our colleagues are hearing, when they go home, that people are in trouble. They are hearing the same stories I am hearing, and they are hearing people want them to begin to stand up to the Bush administration, stand up to the oil companies, stand up to the speculators, stand up to the people who are ripping them off while their lifestyle is rapidly declining.

What we did today is a good thought, but, clearly, we have a long way to go. I am onboard legislation, which we discussed a little bit today, which demands that President Bush tell Saudi Arabia it is not acceptable that they have cut back on their oil production, that it is imperative they increase oil production so we can have more oil on the market, which will lower gas and oil prices.

In addition to that, I believe the time is long overdue that we start dealing with the reality that OPEC is, by definition, a cartel designed, created to restrict trade, to collude to limit oil production output, and to make prices higher than they need be. We have to take a hard look at OPEC and begin to demand that this President go to the WTO and break up OPEC.

Furthermore, it is very clear that at a time when oil prices are soaring, it is, in my view, absolutely necessary that we impose a windfall profits tax on the oil and gas industry. The American people do not understand why they are paying recordbreaking prices at the gas pump while ExxonMobil has made more profits than any company in the history of the world for the past 2 consecutive years.

Last year alone, ExxonMobil made $40 billion in profits and rewarded its CEO with $21: S4097] GPO's PDF
ExxonMobil gave its former CEO a $400 million retirement package--a $400 million retirement package and people in Vermont and all over this country are unable to fill up their gas tanks or heat their homes.

But ExxonMobil is not alone. Chevron, ConocoPhillips, Shell, and BP have also been making out like bandits. In fact, the five largest oil companies in this country have made over $600 billion in profits since President Bush has been in office.

Last year alone, the major oil companies in the United States made over $155 billion in profits. Believe it or not, these profits continue to soar. Recently, ExxonMobil reported a 17-percent increase in profits, totaling $10.9 billion. Earlier, BP announced a 63-percent increase in profits and on and on it goes. Every major oil company is seeing a significant increase in their profits. Meanwhile, what these big oil companies do with all their revenue is they have the capability of providing their CEOs with lavish compensation. In 2006, Occidental Petroleum gave its CEO, Ray Irani, $400 million in total compensation for 1 year of work.

My friends, when you are going to fill up your gas tanks at $3.75 a gallon, let's remember, the gentleman who runs Occidental managed to survive last year on $400 million in total compensation.

Last year, Anadarko Petroleum's CEO received $26.7 million; Chevron's CEO received $15.7 million; and ConocoPhillips' CEO made $15.1 million in total compensation.

Let's be clear, I believe oil companies should be allowed to make reasonable profits, and CEOs of big oil companies should be able to make a reasonable compensation. But at a time when so many Americans are struggling to make ends meet and when people cannot afford the outrageously high prices they are now forced to pay, these kinds of executive compensations are to me totally unacceptable.

It is not just the oil companies that are ripping off the American people. There is a lot of evidence, and there have been hearings held on this issue, that wealthy speculators and hedge fund managers have been making obscene amounts of money by driving up the price of oil in unregulated energy markets with absolutely no Government oversight. The top 50 hedge fund managers earned $29 billion in income last year.

What we are seeing now is not only oil company greed driving up prices, but we are seeing financial institutions and hedge funds speculating on oil futures also driving up the price of oil. This is an issue that must be dealt with in a number of ways, including repealing the so-called Enron loophole.

I conclude by saying what I think the American people know. They know our middle class is in deep distress, that people who have worked their whole lives hoping to enjoy a secure retirement are not going to have that retirement. We have heard from young people who are very worried about how, if ever, they are going to be able to pay off their very high college loans, and we heard about other people who cannot afford to go to college.

The time is very much overdue for the Congress to stop listening to the oil companies, the speculators, the banks, and the credit card companies and all these people who make huge sums of money and who pay their CEOs obscene compensation packages and start listening to ordinary Americans who, to a great degree, are not having their voices heard. That is what our job is. That is what we swore to do when we swore to uphold the Constitution. I think we swore to uphold the needs of the American people.

I hope we can move forward in addressing the energy crisis short term. Long term, of course, we need to transform our energy system away from fossil fuels and foreign oil into energy efficiency and sustainable energy. I know you and I, Mr. President, have worked on a number of pieces of legislation that will move this country in that direction, and that is what we have to do.

To watch video of the senator's speech, click here.