Stanford University has just announced that families of students accepted at this great center of learning with an annual income below $120,000 per year no longer has to pay tuition. Great news for Stanford hopefuls, and it seems that Harvard, Princeton and Yale have similar programs. But I can’t help but think how sad this is for the middle class.
I’m old enough to remember when a six-figure income was a proud indication of real achievement. It meant that you had entered into an elite income bracket. I guess today, it means you are needy.
Now, don’t get me wrong. I applaud any effort at making higher education more affordable. (I also wish secondary education was actually effective education rather than a social club with few demands and even fewer achievements.) But I bet it comes as a surprise to families earning 120K that they have moved to a lower class than they believed they had attained.
I remember reading just last week an article that claimed most earning families overestimated their pecking order when it came to understanding their place in the sociopolitical grid.
This overstatement of earning position is good for government because it diminishes economic unrest. The idea here is that it may be a struggle to pay bills and save for the future but, if you believe you have made it, your situation is simply easier to take.
I learned last week that 80% of full-time workers in fast food qualify for government aid of some type. Why is this fact related to the first point I made? Because it demonstrates how disconnected we are from economic reality.
Think about this. Let’s say you work 40 hours a week at McDonald’s and are the main earner in your family. You qualify for food stamps and the ACA (Affordable Care Act, better known as Obama care). But the political backlash is enormous when there is a legislative movement to raise minimum wages so that full-time workers can earn a respectable wage. McDonald’s complains that a higher minimum wage will hurt business because it would need to raise prices.
But the reality is that we, the tax paying public, are subsidizing Micky Ds by providing benefits to its full-time workers. It seems that the middle class is more willing to subsidize the fast food employee with government (tax paid benefits) then it is to demand McDonald’s carry its share of the burden. This proves once again how out of touch Americans are with their own economic situation and how indifferent we are to the realities of economics.
Personally, I would rather see the corporation lower its earnings paid to shareholders than to have my tax dollars subsidize its profits. But, look, that’s just me. I am obviously out of touch with the income stratifications.