What is considered middle class income in the Inland Empire?

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In 2020, the Pew Research Center offered an income calculator, based upon 2018 data, to determine where you are among economic groups. We ran the numbers, for households of one to five persons, for persons living in the Los Angeles-Long Beach-Anaheim metropolitan area (L.A. and Orange Counties).

Source: Pew Research Center

More Inland Southern Californians are going to work now than at any time in the past five years, but the economic “middle class” zone that used to be a badge of honor for them and millions of other Americans remains elusive.

Experts say, and some economic data bears it out, that workers in Inland Southern California, one of the regions that suffered the most when the Great Recession hit almost five years ago, are probably further away from getting into the middle class than most other regions.

The first decade of this century is being called a “lost decade” for the American middle class.

The growth spurt that began just after World War II meant millions of American workers, spanning four or five generations, could afford to buy a home and send their children to college.

But a report released late last month by the Pew Research Center found that “since 2000, the middle class has shrunk in size, fallen backward in income and wealth,” and, to some degree, lost some typical American optimism about the future. It is something millions are forced to contemplate on the 118{+t}{+h} anniversary of Labor Day, the federal holiday established to honor working Americans.

The Pew Research Center, a well-regarded Washington, D.C.-based think tank, interviewed 1,287 adults and found that 85 percent who identified themselves as middle class believed it is more difficult to maintain that status now than it was in 2000.

The U.S. Census Bureau defines middle income as a family of four making at least $68,174, although it would be higher in a major city.

The report asked people about ages and political leanings and also asked who they’re most likely to blame. Congress, banks and large corporations topped that list.

THE INLAND PICTURE

The Pew Center research did not break the report down for geographic areas, but other data suggests the decline in the middle class is worse for workers in San Bernardino and Riverside counties.

CredAbility, a national nonprofit credit counseling and education agency, recently released its Consumer Distress Index for the first quarter of 2012 and found that the typical Inland Empire household had the third-worst financial condition of the 43 metropolitan areas it measured. Only the Tampa-St. Petersburg and Orlando areas, both in Florida, were worse.

CredAbility based its report on studies of housing and employment trends, people’s credit, how they manage household budgets and their net worth, which is defined as assets minus debt.

CredAbility’s report noted the two Florida regions have troubled housing markets, as does the Inland area. That also is a factor for middle-income people.

It is now more than three years since the recession officially ended.

Linda Itzen, a financial adviser with Ameriprise in Riverside, said it seems to take a long time for people to understand that, although the recession was over, it doesn’t necessarily mean that prosperity or even economic security was coming.

“As of the end of last year, people started to realize that a bubble is not going to appear,” Itzen said. “It took that long to realize that eat, drink and be merry wasn’t coming back. And maybe they realized their expectations were unrealistic.”

Itzen, who has been a financial planner for 23 years, said that before the recession people were into short-term gratification. That is not the case any more, “and people are still coming to grips with that,” she said.

There are several reasons working people in the Inland area are not able to regain a measure of security and some of them are interlocking.

For example, when housing prices stopped escalating late in 2006, thousands of people who were working at jobs that were related to construction were laid off. Inland cities such as Moreno Valley, Perris, Fontana and Beaumont, stopped expanding.

That end of that growth meant that there was no longer a need to build more schools and fire stations and hire teachers, firefighters and police officers. All of those workers were solidly middle-income wage earners.

PERSPECTIVE ON JOBS

Inland employers have been hiring for the better part of a year. The July report from the state Employment Development Department estimated that just fewer than 1,147,000 people were on payrolls in the two-county area, a 2.2 percent increase from July 2011.

Unemployment was at 12.7 percent, down from 15 percent two years ago. Esmael Adibi, chief economist at Chapman University, said a recession as deep as the Inland Empire’s takes the pressure off of employers and puts it on workers. When that many people are looking for jobs, most companies don’t have to pay heavily to attract applicants, and it also makes it easier for a boss to say no to someone asking for a raise.

Also, some of the heaviest growth is in sectors that don’t pay well, including clerical and temporary jobs.

“Employers hire and they don’t pay premium wages,” Adibi said. “Their new hire might be making less than the one who was fired two or three years ago.”

Recent data confirm Adibi’s assertion. A report released last week by the California Budget Project found that the median hourly wage in California declined by 4.5 percent between 2006 and 2011 when adjusted for inflation, giving the typical Californian the same purchasing power in 2011 that she or he had in 1998.

Also, a National Employment Law Project report suggests that better-paying jobs that disappeared during the recession are being replaced by jobs that pay less. The elimination of low-wage jobs, with hourly pay of $13.83 per hour or less, accounted for 21 percent of the downturn.

But that level of job represents 58 percent of those created during the expansion, NELP found.

EDUCATION’S NEW ROLE

A bigger reason that Inland workers are losing their grip on middle class is the educational level of the workforce, which was not an issue for some 53,000 construction workers who are no longer on area payrolls.

In 2005, developers wanted their subdivisions and other buildings finished yesterday. Workers who accomplished that were paid well, and they didn’t need college to land those jobs.

Now, with little new construction, the workers need more education. Redlands-based economist John Husing said 47.4 percent of the Inland Empire’s adult population has never attended college at all, and that’s a problem.

“In the United States, the (job) sectors that are succeeding require newer education,” Husing said. “We have not seen any strategy that addresses that.”

Seven Inland warehouse workers were trying to address that last week in a San Bernardino Community College District classroom. Part of the district’s Professional Development Center, the students were in the midst of 32 hours of advanced training for distribution management, which would give them an advantage when applying for a job that could well open the door to the middle class.

The training gears students toward thinking like managers who anticipate and solve problems. Ron Hurst, the instructor, told them to toss out the cliché “think outside the box.” There should be no box, he said.

All but one of the seven were sent to the class by their current employer in hopes that the net result will be sharp, well-trained supply-chain managers. Four were from the same company, shoe retailer Payless, which has a distribution center in Redlands.

Martha Fernandez, 33, of Perris, one of the Payless workers, said her husband, a plumber who works on new construction projects, recently got a job after a long period of unemployment. It was a long and difficult period of making it on one income, she said.

“I want the tools to continue on a career path,” Fernandez said. “I know that the more knowledge you have, the more you’ll get ahead.”

Margaret Sandoval is the only person in the class not there on an employer-sponsored program. Her employer, Stater Bros., gave her permission to switch one of her work days to a weekend shift so she could take the class Hurst is teaching.

But as a single parent, she said this was a necessary sacrifice.

“With the economy the way it is, it’s hard to keep up,” Sandoval said.

Better-paying jobs for better-trained workers are hard to create. A smattering of high-tech jobs have been created in southwest Riverside County, some of them spilling over from the technology clusters in Orange and San Diego counties. Also, the Inland Empire’s largest factory employer, Abbott Labs, is in Temecula and qualifies as “high-tech manufacturing.”

But Morris Myers, executive director of the Economic Development Corp. of Southwest California, cautions that this type of employer is finite.

”We try to expand the existing base, but you can’t create something out of thin air,” Myers said.

DECADES OF CHANGE

Robert Kleinhenz, chief economist for the Los Angeles County Economic Development Corp., said the middle class has been undergoing changes for several decades.

A big reason for that, he said, is the decline in union membership. While not advocating for unions, Kleinhenz said they did provide workers with a ticket to middle-class life. According to the U.S. Bureau of Labor Statistics, in 2011 union members earned a median wage of $938 per week, compared to $729 for non-members.

But union members made up more than 20 percent of the workforce in 1983 and only 11.9 percent in 2011. It’s more like 8 percent for the private sector, and this decline alters the image of the middle-class skilled craftsman.

“I think that, for the nation as a whole, the notion of the middle class has, either subjectively or objectively, changed over time,” Kleinhenz said.

Who’s to blame?

How often do people place heavy blame on each of these entities for the decline of the middle class in the past 10 years?

Congress: 62 percent

Banks and financial institutions: 54 percent

Large corporations: 47 percent

The Bush administration: 44 percent

Foreign competition: 39 percent

The Obama administration: 34 percent

The middle class themselves: 8 percent

Source: Pew Research Center

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