The middle class shrank from 61 to 47 percent of the U.S. population in the time between when I graduated from high school and when I recently qualified for Medicare. I started thinking about the middle class and who is in it as I listened to the two proposals for development on the old Bath YMCA site on the Bath Community Television webstream.

The Szanton Company proposal creates rental housing financially accessible to most people in Bath. The New Height Group/CHOM proposal creates condominiums for sale starting at $250,000 to upwards of $450,000. Using the rule of thumb that home purchase prices should be around 2.5 times your annual income, these are targeted to households with incomes ranging from $100,000 to $160,000 annually. Also, condo owners need to have the capacity to pay a significant down payment, as well as both the resulting mortgage and monthly condo fees. Interestingly, both proposals were described as planned for the middle class.

So who really is middle class today? According to a measure developed by the Pew Trust, the middle class is defined as those with two thirds to double the median income. (Median is the middle value in a list of values like income – half the people have values above this number and half below it.)

In Sagadahoc County, where the median household income is $49,714 for a household of two, the middle class would include those with annual incomes between $32,800 to $99,428 per year. For one person, the middle class income range is between $27,659 to $83,816, based on a median of $41,908 in annual income.

So why talk about who is in the middle class? The middle class is under tremendous stress and is shrinking despite being a bedrock of the community. For the last 40 years, wages for middle income folks have been essentially flat when adjusted for inflation, and most wage growth has gone to the top 20 percent of households.

The ability of the middle class to build reserves for emergencies and create savings or assets has been severely diminished by the changing nature of employment, high housing costs, and the impact of the recession. Forty-seven percent could not put together $400 in an emergency (atlantic.com), and by 2014, most families had recovered less than 40 percent of their recession losses. Retirement security has been deeply impacted by these losses to savings and 401K funds, and the loss of traditional pensions, which now cover less than 22 percent of the work force.

What is the role of housing? Housing is a key component of our community infrastructure and quality of life. I think financially accessible housing can be like the GI Bills of the past, creating a pathway for folks to reduce struggles with housing costs so they can plan for a more stable financial future, allowing them to create some assets themselves, including saving for their own home.

So why invest in the middle class with financially accessible housing? It helps us retain essential workers like firefighters, home health workers, teachers and others who may not be extremely highly paid yet have to compete in a challenging housing market. Financially accessible housing helps us keep people in the community who are consistent economic contributors, shopping locally all year long in grocery stores, restaurants, Renys, etc. Such housing is a tool that helps those “backbone of the community” folks to build savings and assets toward their own goals and futures – whether saving for a home, a child’s education, or life in older age and retirement.

Local service organizations, churches, arts and cultural groups benefit both from their patronage and volunteer support. And, housing accessible to the middle class may help restore some of the lost intergenerational mobility, where kids do better than their parents. This kind of investment in financially accessible housing is akin to a GI Bill for the middle class, a form of community infrastructure, not unlike what was offered to vets after WWII.

My parents would be very surprised to hear how much the middle class has shrunk. My dad fought in the Battle of Bulge and my mom worked in the Army payroll office in WWII. They bought their first house for $3,000 through the GI bill with $100 down. That beginning, via the GI Home Mortgage program, led to their ability to provide a stable home for their family, give their children access to health care and education, and create savings throughout their lives and for retirement.

None of us has made it on our own. Whatever I have done with my life has been in part because I had the benefit of access to significant public infrastructure investments – public schools, hospitals built with public funds, parks, college education all built upon those investments that started with my parents’ home purchase through the GI Bill.

A strong and broad middle class leads to a stronger community, more able to engage in our civic and economic life. With the proposal by the Szanton group for the old YMCA property, we have a chance to grow the anchoring middle class that Bath needs, for now and for the future.
I am not trying to start a class war over people who can afford higher priced condominiums, but rather am trying to help us consider why investing in housing that benefits the middle class makes sense for the long-term vitality of our community as the City Council decides which proposal to advance in the process.

Phyllis Bailey
Bath