"Barely Squeaking By On $300,000 A Year"

by: David Sirota

Mon Aug 17, 2009 at 08:00


In the months following the Wall Street meltdown, we've seen a stealth marketing campaign that is profound for its boldness - a marketing campaign designed to make us believe that very wealthy people are suffering the most.

We've seen this campaign in Wall Street spokespeople insisting that a $500,000-a-year salary isn't very big, in a New York Times style section that asserts that it's impossible to live in the city on a half million dollars; in a punditburo that says millionaires are oppressed and can't afford to pay $9,000 a year more in taxes for universal health care; and in a national press corps that seeks to portray any effort to raise taxes on the richest 1 percent as unfair; and a business press that threatens a class war if President Obama moves forward with his promise to mke the payroll tax more progressive. As I said, this is a marketing campaign, and a fairly well coordinated one.

That's why I wasn't surprised to see this audacious Washington Post piece over the weekend which reports - with a straight face - that those making $300,000 a year are "barely squeaking by" in this economy. I shit you not:

David Sirota :: "Barely Squeaking By On $300,000 A Year"
Laura Steins doesn't mind saying that she is barely squeaking by on $300,000 a year...

As a vice president at MasterCard's corporate office in Purchase, N.Y., she earns a base pay of $150,000 plus a bonus. This year she'll take home 10 percent less because of a smaller bonus. She receives $75,000 a year in child support from her ex-husband. She figures she will pull an additional $50,000 from a personal investment account to "pick up the slack."

The nanny and property taxes take $75,000 right off the top, but Steins considers both non-negotiable facts of her life and not discretionary. When she bought out her husband's share of the house after their 2006 divorce, she assumed the costs of keeping it afloat -- $8,000 to $10,000 a month. There's a pool man, a gardener and someone to plow the snow from the quarter-mile-long driveway.

As tight as money is, she has decided that living in a 4,000-square-foot house on three acres is the practical thing to do.

I'm not going to take up text space going off about how absurd this all is, except to say (as I have before) that in a country where the recession is obviously most crushing the middle-class, I'm playing the smallest violin in the world for those making $300,000 a year (ie. the top 5 percent of the country) - especially those who whine about their plight while refusing to cut back on their nannys and gardeners.

What's fascinating here is not how incredibly out of touch with Middle American reality the superwealthy are, but how willing the media are to promote the superwealthy's whines as legitimate and justified. The entire economic narrative on Main Street is about how the average family making $50,000 a year is going to put food on the table - and the entire economic narrative in the elite media is about the top 5 percent's concerns that they might have to cut back on mansion expenses.

This is the real "Two Americas" - the elites and the media outlets they control, and the Rest of Us. And clearly, the former doesn't give a shit about the latter.


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Maybe it's ironic? (4.00 / 1)
Maybe it's  a "Modest Proposal" type thing? What better way to get the middle class angry than to publish article after article about what tools the wealthy are.

Conduct your own interview of Sarah Palin!

Top FIVE Percent? (4.00 / 3)
David, David, David!  The Census Bureau tells us that the lower limit of the top 5% of households (not individuals) was $177,000 in 2007.

An individual making $300,000 is making almost twice this.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3


True, but (0.00 / 0)
CTJ says the average income of someone in the top 5% is about $250k. So you're right - we're probably talking top 3%.

[ Parent ]
About That $300K Household (4.00 / 3)
She's easily in the top 2%. In 2007 if you had an AGI of about $261K or higher you were in the top 2%.

[ Parent ]
It's the town (4.00 / 10)
Living in the NY metro area, a number of things are freakin' obvious.

Poor old Laura can live in a 4,000 square foot house at a far lesser cost but it would mean moving out of one of the most expensive towns in Westchester and moving into a normal commute range.

Farther out in Jersey she could have everything she's got for less than half the cost. Of course poor Laura wouldn't even fream of living in Jersey.  She could move to northern Westchester and save considerably but she has to have that 10 minute commute and complain incessantly.  The only people I know with a 10 minute commute either have very crappy local jobs (paying well under that $50,000 mark) or have their own businesses and work from home.

About five years ago I did a household budget for someone who could not make it on (I kid you not) $1,500,000 a year.  Laura's slumming it at a mere $300,000.  They did fine with small adjustments.  It did not make the Washington Post or the New York Times.

This is not ironic.  Look back at the coverage of the super wealthy circa 1900 and this was common place newspaper fodder.  The comings and goings of the super rich filled up space before the days of the movies (there were no movie and TV stars to fill up the tabloids because there were no movies and no TV).  Incrdibly expensive parties.  Elaborate mansions.  Hobbies that were over-indulged.  It led to muck rakers, regulation, and anti-trust.

Btw, note the name of Laura's employer: Mastercard.  Your excessive interest fees are paying for this life style.


It was a nice discussion there at WaPO - lots of fun! (4.00 / 1)
Most commenters were up in arms about the story, especially criticizing that it ran on the front page. One frequent point of view was that this is really a story about a divorce, and not about recession. And the overwhelming majority pointed out that this has Laura Steins "problems" have no resemblance whatever to what they face in their life. And, of course, they are totally right:

House, 3 acres, 4000 sqft: 12+8,000$=96,000$
Fulltime Nanny (no healthcare): 40,000$
Gardener: 12+500$=6000$
Volvo SUV, Pontiac Solstice: Unknown
Fixed Expenditures/year: >142,000$

Variable Expenditures for 5 Persons: Unknown
Designer Jeans and luxury cell phones for 3 kids: Unknown

Basic income (VP@MasterCard): 150,000$
Kids' aLimony from Ex: 75,000$
Average Bonus (MasterCard)>75,000$

Withdrawal from savings because of "10% reduction in income": 50,000$

Value of house (self appraisal): 2.5 Million
Value of House (Zillo): 4 Million
Price of House when bought in 2000: 1 Million
Remaining mortgage, HELO: Unknown

Yeah, not really the typical single mom family. No surprise that WaPo readers thought the whiny story of Laura Steins is a bad joke.


I think you miss the point, sir (4.00 / 4)
When you write this: "As tight as money is, she has decided that living in a 4,000-square-foot house on three acres is the practical thing to do."

This is not about "practicality", its about being entitled.

Its the Laura Steins of this nation that made it what it is today. Without CEOs like her we wouldn't even have an America worth fighting for in Baghdad or Kabul. She worked hard for her social and economic status and now she's entitled to her monetary reward.



"It sounds wrong...
     ...but its right."


"I'm playing the smallest violin in the world for those making $300,000 a year" (0.00 / 0)
Hmm, this sounds familiar. Did you comment to this story, David? Or did you pick up that expression there?
:-)

Smallest Stradivarius (0.00 / 0)
no doubt.

[ Parent ]
Vice President at MasterCard? (4.00 / 5)
One (more) thing I wonder about: doesn't MasterCard typically employ people who have above-average financial acumen? Isn't that, you know, their whole freakin' business?

If one of their VPs cannot figure out how to live comfortably on $300K per annum, maybe they need a smarter VP.


Wonder what they're thinking about her at the job! (0.00 / 0)
Especially her boss. Not exactly good PR for the company...

[ Parent ]
Not As Bad As The Whole Foods CEO (4.00 / 2)
These folks are just trying to make Wall Street look good.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Oh, btw, did you read that she hasn't paid her painter yet? (4.00 / 3)
YES, that 300,000 bucks per year bimbo expects her PAINTER to give her credit 'til next month. But, of course, the paintjob couldn't wait. She HAD to have the hallway painted in yellow.

(Pls excuse me while I puke)


HER Problems Are Important, and ... and ... (4.00 / 2)
other people exist for reasons other than being her doormat, nanny, ...

huh?

how can they have problems, or how can they matter --- they barely exist! IF they mattered they wouldn't be a f'king painter, therefore they don't matter!

ta da!

rmm.  

It is too full o' the milk of human kindness To catch the nearest way


[ Parent ]
She's Even Wealthier Than You Think! (4.00 / 6)
Child support is not taxable. That $75K in child support Laura's household receives is 100% tax free. And that means she's pushed mostly (if not entirely) into the lower 28% federal tax bracket. Nice!

Just consider that single source of income for a moment, leaving aside everything else. Raise your hand if you and your kids could live quite respectably on $75K per year tax free.


186,000,000 live on 75k or less (4.00 / 1)
and about 22,000,000 live on more, if you use money income,

table 680, statistical abstract of the united states.

rmm

http://www.census.gov/compendi...

It is too full o' the milk of human kindness To catch the nearest way


[ Parent ]
Before Taxes (0.00 / 0)
You may be looking at before-tax data. Laura's $75K in child support is after-tax, free and clear.

[ Parent ]
good point, BUT, tax data is kind of worthless (0.00 / 0)
in that you got all this below the line and above the line crap

AND

who are the ones who get all the deductions to lower the fiction they report?

NOT $48,000 a year teachers, or 48 k ANYONE.

given taxes, a LOT more than 186,000,000 are living on under 75 grand a year.

isn't the REAL point - WTF does she have to do with any of the bottom 95% of us?

rmm.  

It is too full o' the milk of human kindness To catch the nearest way


[ Parent ]
"WTF does she have to do with any of the bottom 95% of us? " (0.00 / 0)
The credit card company she works for uses us as a source of profits and those profits pay her salary and bonuses.



"It sounds wrong...
     ...but its right."


[ Parent ]
you REALLY missed my point(s). OF COURSE (0.00 / 0)
she needs us as doormats, asswipes, bootlickers, indentured servants ...

rmm.  

It is too full o' the milk of human kindness To catch the nearest way


[ Parent ]
I didn't have the same reaction. (4.00 / 1)
I think the article accurately portrayed this woman as out of touch and self-absorbed.  

The writer is Ann Hull.  Check out her archived articles - I don't see any elitism or insensitivity in the rest of her work:

http://projects.washingtonpost...


Also (0.00 / 0)
check out the photo gallery, and the pictures and references to the nanny.

[ Parent ]
This is why the bulk of the cure (4.00 / 1)
for what ails society at the present moment needs to fall upon the rich:

They don't value what they have.

In general, people don't value what they have until it's gone.

There is a spiritual dimension to our social ills.


Lifestyle decisions (4.00 / 1)
While I don't think you need to be very sympathetic to the person earning this much, that doesn't mean the article is exactly wrong.  People make lifestyle choices and, to a degree, get sucked into them.  When the bills equal the income, you start to feel poor, no matter how large the numbers are.

One can fix all that, of course.  Some of it is easy, like stop going out to dinner so often.  But some of it becomes major.  Take the kids out of private school, cancel membership to the club, sell the house and downscale, etc.

But none of this comes remotely close to what poorer people go through all the time, of course, particularly when health disasters strike.  That is where we need to push back.


What this poor woman needs (4.00 / 2)
is a tax break!

Sorry, feeling frisky today.

Montani semper liberi


Yes, on her next Hummer! (4.00 / 1)
You wouldn't believe how expensive those things are to buy and keep these days!

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton

[ Parent ]
I have zero sympathy for this woman and her "plight" (4.00 / 1)
I lived in Manhattan for much, much, much less for a number of years. No, I didn't have kids or a 3000 sq ft house or luxury apartment, blah blah blah, and I didn't eat at Daniel or Lutece or the Quilted Giraffe every night (or ever, really). But one can live in even the most expensive parts of the country for a lot less than $300k. A LOT less. It's all a matter of what one is able and willing to do without. And with people having to do without life's essentials, it's absurd to care about people who are forced to do without life's non-essentials.

I know people like this. They're spoiled. It's literally as simple as that. They want the good life and are living in a completely different reality from most people. If they can afford it, more power to them. But if they can't, tough fucking shit. People are dying and losing their homes.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton


Boycott MasterCard (0.00 / 0)
It worked on Whole Foods, right?  

"It sounds wrong...
     ...but its right."


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