tv Real Money With Ali Velshi Al Jazeera December 17, 2014 6:00am-7:00am EST
>> one of the world's largest single unit housing developments. >> the iconic american dream, you work hard. load up the kids in the car, and you're on the road to ease street. >> others take their travel in lots. >> today the dream is alive, but it's an uphill struggle. >> it's hard to survive. >> we need to strengthen the middle class for the 21st century. >> i can't figure out why it's not working. >> the democrats are hanging the middle class out to dry.
>> i feel like it's never going to get better. >> this is a special edition of "real money." a year ago, i committed to an in-depth exploration of the conditions and challenges facing america's middle class. we called it rebuilding the dream, because we can all readily admit that for traditional america, the traditional notion of the american dream shattered. we introduce you to people like yourselves, people with real world pressures in their daily lives. for purposes of our year long conversation, we identified america's middle class with incomes ranging from 10 $120,000 a year, but more than money, it's
about aspiration. being involved in the middle class meaning secure if your job, owning a home, access to good healthcast and education. time off for vacations and the ability to live comfortably. you'll need something for tonight, even the basics are hard to achieve. vacations would be a luxury. unemployment has dropped but wages are still an issue for american workers. the median met worth for america's middle class families took a 17% hit between 2010 and 2013. most americans agree that the middle class is in crisis, squeezed by the housing, the debt load and lower wages. but that may change
in 2017, with more jobs added and wages going up again. but there's a lot of ground to make up. we introduced you to people struggling to make up for that lost ground. people like the sabino family in new york, and the bowman family in tennessee. with one home, two kids and several pets, bill and diane sabino seem to have it all. >> yeah. i heard that song before. >> it's going to get better, relax. >> right. >> but what they also have are severe money problems that are seriously marriage. >> couples will get divorced quicker over finances than if someone strayed and had an affair. >> i'm very worried. you don't know what's going to happen next.
>> i just things. >> struggling this bad. >> the defined income of over $100,000 a year, cara and stephanie williams are in serious debt. they want to move from the chicago suburbs to a more affordable area, but like 9 million other homeowners, their house is underwater. >> we had to pull the whole retirement fund. the entire thing. i cried and cried and cried. it's mine. >> jody boleyn is the single mother of a teenage son. >> we're not restocking the store, i'm going to close it on the 24th. >> she's a struggling small business owner. in a bold move to stay afloat, she's moving her store to a new location.
>> i'm on a mission that i have to keep this business going. >> getting the new store up and running, the details are just overwhelming. the stakes are so high that i think honestly, i've been afraid to realize how high they are. >> well, we have also spoken to america's foremost experts when follow the problems that middle class americans face. the access of these is important to us all. because the most important part of a robust economy is it's middle class. strong consumer demand and desperately needed tax revenue. without a strong middle class, america's middle class economy falters. ed wolf, the author of the study, middle class meltdown, robert shiller, nobel prize-winning economist from yale. and gentlemen, thank you for being with us, and let me start with you, ed. if you dropped down on earth
and looked at it the last year, you would see improvements in the home prices and the stock market and wages and more jobing created. why do these things not translate on an one-on-one level for americans that we're focusing on? >> you have to go back in time. there has been a huge decline in household wealth, particularly for the middle class. in fact from 2007 to 2010, it plunged by 4%. it put middle class families back to where they were in 1969. incredible. so i think, you know, wealth, net worth, savings, that's a former security for the middle class, and i think the angst of the middle class is really closely tied to what has happened to their balance sheet.
the struggle can be seen in the fact that they're still dissaving, not saving but dissaving, and their net worth continues to fall. and that's why they have this pessimism about the future, despite the recovery in the job market. and despite the last month's rise in wages. it's in their balance sheet. and that's their form of economic security. hurting. >> robert shiller, you're so associated with the case shiller report every month, and you're on tv talking about home prices, and it's so interesting, you often say to me and others that middle class americans need to top looking at houses as a balance sheet item as much as they do. and one of the things in ed's research is that wealthier americans, for wealthier americans, the home is a smaller part of the balance sheet than it is for middle class americans, and they get hit more as well as gain more from housing ups and downs.
>> i think there's a common view among middle class americans that housing is the best investment. and a lot of people think that. it is, in a sense, because it's the investment that they most often have, and any investment is important. you have to plan for your future. but it hasn't historically performed as well. but right now, people are fairly optimistic. i just and a survey with case and thompson. the average american in the four cities we studied expects a 5 and a half percent growth in home prices for the next ten years, and that's pretty good. i don't think that it will be that high. they're a bit too optimistic about homes, and they should be investments. >> there's always a debate, robert about whether or not home ownership should remain part of what we pedal as the american dream, should we? >> that's the interesting question.
the argument for subsidizing home ownership is that homeowners appear to be better citizens. they know the mayor, and they can tell you about issues and their community. i think that being a homeowner does that. so it sounds like a good thing. but i don't know how much -- this is an issue now. dave camp had a proposal last february to limit the home mortgage to half a million dollars. and that might be part of a trend to stop subsidizing homes so much. maybe we are subsidizing it too much. and maybe people are a little bit too home conscience. >> interesting, ed. in other countries like america, with similar gdps, we subsidize saving more than we subsidize home ownership. and you used the word dissaving, americans are dissaving and what do you mean by that.
>> well, they're literally depleting their assets. maybe not so much their home, but certainly strong evidence that their pension accounts have gone down considerably. but their stock ownership rates have gone down. and small business ownership rates have gone down. so there has been a pretty substantial decline. and what assets the middle class owns. >> we're going to hear those stories from the families that we have been following. thank you to both of you, robert shiller and ed wolf, middle class wealth. when we return, we'll meet the sabinos who documented their anxiety as they struggled to rebuild their american dream. >> he had an anxiety attack, and he was stressed out about money. >> i tried to fly home, and i got maybe three or four miles, and i got to pull over, i'm not going to make it. >> you're watching a special
edition of america's middle class, rebuilding the dream. >> a deal went against they're own government >> egypt mismanaged it's gas industry >> taking the country to the brink of economic ruin >> this is because of a corrupt deal to an assigned to basically support two dodgy businessmen an israeli one, and an egyptian one... >> al jazeera exposes those who made a fortune betraying an entire nation >> you don't feel you owe an explanation to the egyptian people? >> no...no.. >> al jazeera investigates egypt's lost power on al jazeera america
in this interview, i haven't been before... >> i told you this would be your best interview >> ...and it is... it's the current one... >> every monday, join us for exclusive... revealing... and surprising talks with the most interesting people of our time... talk to al jazeera, only on al jazeera america >> i found out i lost total trust, because he didn't come forward to me and tell me exactly what was going on. >> i was afraid to tell her. because she was going to get -- she gets very nervous, and she was going to be really upset. >> welcome back to a special edition of "real money." america's middle class, rebuilding the dream. since we have been following these families a year ago, the american economy has been showing signs of strength. in november, the u.s. added 3 it 21,000 jobs, and that's the most in three years.
the stock market is up, and the housing market continues to gain ground after the bubble bursted. it all adds up to an economy that is expected to grow 3% this year, and middle class families are still struggling. the sabinos you just met. a couple living on long island, new york, who make $95,000 a year, and as a school bus [ audio difficulties ] earnings barely cover their expenses, and to make it worse, their property taxes have more than doubled to $12,000 a year 1998. all of that
i found out that i lost total trust because he didn't come forward to me and tell me exactly what was going on. i feel betrayed. and i feel like he didn't put me in partnership. so there's like a block now. >> i was getting scared and stressed and i was afraid to tell her. she gets very nervous, and she was going to be really upset. so i put it on my shoulder, which is kind of stupid.
and it was a stupid mistake of mine. >> the tree broke our shed, and our pool liner --. >> unbelievable. thank god it didn't kill somebody. the tree removal guy wanted $1,000. and i'm going to try to do it myself. we have the mortgage i'm worried when, and the other bills, and i work midnight shift. and i'm tired as it is, and stress on my mind. so i got into my car, and as soon as i got into my car, i felt very dizzy. and everything was spinning and i tried to drive home. and i got maybe, i don't know three or four miles and i said, i got to pull over, i'm not going to make it. and i pulled into dunkin' donuts and i couldn't get out
of the car, and i thought i was having a heart attack. i went into the bathroom and threw water on my face and i called an ambulance and went to the hospital. >> you're never going to get yourself out of this hole unless you include her in those decisions. what keeps you from doing that? it's a matter of making a phonecall. your procrastination, you have to get that fixed. so when are we going to do it? >> tomorrow. >> why not today? >> she has a point, why not today? >> i was walking into the kitchen and i left, because there's always a threat that they're going to have the catering service come in. i'm on my way to the dmv.
i have to take my general knowledge test. not easy. i failed it twice. i'm going back. here goes nothing. > nothing.i have room to build. in 90 days, i get a little raise and a bonus, and then in six months, another raise, and then a year another raise, and once i'm a driver, forget it, the money is great. i got up to number 43, and i failed. and so i try again. i got my permit, yeah! i'm so excited. took me long enough. look! look! see? there's my permit. and i'm very excited. >> we're getting better at staying afloat. and it's coming together, little by little. phil and diane sabino join me now, along with
jeff, a psychologist who joined me right at the beginning of our series, and phil and diane, congratulations on your anniversary of 25 years. you guys are so brave, and i can't but the get emotional watching your struggles and your story. you're real fighters, and you're also real fighters sometimes, and i wouldn't, diane, would you guys have less tension if not for the money? in other words, absent the constant 25-year struggle that has gotten worse for you lately, are things okay? >> yeah, everything is fine. kids, and just normal stuff. thank god nothing major, but if we didn't have the money issue, i would be able to enjoy my life a little better. >> yeah, and you guys really tried different things. work, and congratulations for getting your permit. and you really have planned it out. this house, and the mortgage, and the taxes are an albatross for you.
in a weird way, you both have transferable skilled. you could be a bus driver somewhere else and you could be a ups driver somewhere else, so why not atlanta or somewhere else other than long island? >> believe it or not, a lot of people are doing is that. a lot of friends and family and people we know, when you have family, it's hard to pick up and leave, and we have family, and it's very hard to pick up and leave. not right now. maybe one day that would be a beneficial thing to do, but for now, it's hard to make that move. >> your last year has been a struggle. when we watched it with you, it's almost unbelievable to see, i can't believe this just happened to them. is this unusual, or are they all like this? >> i think we were tested to see if we could make our 25th wedding anniversary. >> no kidding. i thought to myself, jeff, i
said if they're going through every year like this, this is impossible. is this common? >> yes, it is common. because we know, as you've said, the middle class are going through this, and we know that money is a major stressor in any relationship. and when you already have some issues happening, as we see in most marriages, it makes it worse. but the whole idea that we start at the beginning, and finally, this is so symbolic. you're driving the bus, instead of being run over by it. the moral of the story is, you have to hang in there together and you have to be partners, not just romantically, but as financial partners to make it work, and you will see the light of day, and you're not the only ones doing this. and that's why you're role models to many who are watching this, because they're feeling their pain right now. >> speaking of pain, when we were watching this story, and he was talking about his panic
attack, and i see you nodding that you've seen it before. >> it's something that's an anxiety disorder. and when you're not sharing enough, you start to internalize it, and it's not uncommon to have these panic attacks that you think you're going to die. but now you can talk about this, and both of you can shoulder that burden, and you will see many less things. >> i thought you were being chivalrous and trying to protect her, and turns out to be the same. but it wasn't the right thing to do. you've grown a lot in the last year, the two of you, you've had to confront things, with people like jeff poking into your lives and telling you what to do. and you didn't tell anybody to get lost and didn't shut off the camera, and despite a very trying year financially, do you
feel you've gotten better tools to move ahead? >> yes. we have learned it how to deal with what was going on. i understand why he didn't let me know. if he ever does it again, it won't be -- it. >> it will be a bit of a problem, but i understand. and in an odd way, this tough year made us closer. >> i saw both of those things happen. splitting apart and growing closer, and like you said, you are role models, and you are the example of what so many are going through, and this is the bottom. and i think it's going to get better for both of you. thank you, and thank you, jeff for being with us. coming up next, we meet the williams, cara and stephanie, living on more than $100,000 a year, but it's not enough. >> a lot of people are telling me to go into foreclosure, and
>> my brain is trying to process, the mortgage is due, and the gas bill, and we're at the cut off point. >> we're making the best we can, but it's very hard. and very frustrating. >> welcome back to a special edition of middle america e. the middle class, rebuilding the dream. when we first met them, their combined family of six is living in a suburb south of chicago. together they makeover $100,000 a year, but it's not enough. have a look at their story. >> go eat, baby, hurry up, go eat.
>> six people sharing one bathroom makes it especially challenging for the williams family to get out for the day. bathroom. >> when stephanie bought the three-bedroom ranch in 2007, there was ample room for her and her son, but since new wife, cara, and her three kids moved in last year, things have been tight. like 4 million homeowners, the williams were trapped in a house that was underwater. >> the house is upside down. the house depreciated over $40,000. it's worth 60,000, and originally, i bought it for 109,000. >> there are a lot of regrets, everything that goes with it. >> the williams couldn't afford to buy a home close to the city. but their two-our round trip commute, including tolls and
gas and parking set them back about $1,000 a month. >> have a good day. >> stephanie is a math specialist with a masters degree, and cara is an it specialist. together, they make more than $100,000 a year, enough to put them solidly in the middle class. but that's not how they feel. >> i consider myself lower class because of the struggles we go to. >> bills that include $1,100 in food and 1029 in clothing costs. home repairs for a leaky roof, faulty electrical outlet and broken oven were on the back-burner. >> our lights have been off and our gas has been off. my insurance company called me the other day and said i needed to paint the siding on my house, and if i didn't do it by june, they were going to drop us from the assurance. >> right now, we have a quote
for $4,500 to fix our attic, which raccoons have gotten into and turn out the insulation. >> the minute we get out of one bind, we hit another. the union of cara kim bell and stephanie nicole williams in a legal marriage. >> we had some shortcomings up to the wedding. we had an issue with our plumbing, where we had to purchase another main, $2,500. >> i didn't think about it, because i had this going on. i don't think we broke the bank with our wedding. the total budget on our wedding was $5,000. and we were not able to provide drinks for the wedding, as far as alcoholic beverages because it was too many for us to handle.
with the plastic plates and the silverware, we only paid $200 for it. i can't wait to spend my life with stephanie. this just solidifies it. >> we're married! >> i was ready to flip a burger. that's how worried i was. and i just knew that i had to go out and find another job. the day that the job ended was the day that i interviewed for the job that i have now. at the tribune, so the particular role that i'm in, which has helped us, contract for hire. my mom, the day after the wedding, was diagnosed with colon cancer, and i'm trying to decide if i'm going to go, the
fact if my mom didn't make it out of her surgery. i already see the difference in my paycheck. what i bring home. >> still, the situation, taking care of the house. >> i just fell in love with the home. i don't know if it's a dream home. it cutting out a lot of bills. i can go right to my job. turn on the gas. >> i was in total disbelief and
shock at that moment, because here i am thinking that i found my perfect home. and the next thing, it's a gut punch. i don't want to uproot them again. that's the devastating part to me. i don't want to be pessimistic. >> cara kim bell williams and stephanie williams join me now, along with lee gallagher, the author of the end of the suburbs. and first of all, cara, how's your mother doing? >> my mom is actually not doing well. she just had a biopsy of her lung yesterday. and i was at the hospital with her yesterday but we're remaining hopeful that the mass is benign. >> you guys have had the definition of ups and downs in the last year, and congratulations on your marriage. when we met you, you were not legally married. and now your marriage is recognized and that's fantastic, congratulations.
but i also said that you earn $100,000 together. and that's no longer true. >> that's correct. i lost my job a week ago friday. basically, i was hired as a permanent contractor and i was told that it was a permanent role, and you're in this role. and nothing will change, and on that friday of last week, i was told, well due to budget, the hired basically. >> it has been a rough week for you. >> it has been. it has been. >> you guys had this great news after you got married that you were able to move into the city, but you still have this house. this underwaterhouse, the plague of so many million americans, and it's not going to make it to $90,000 any time soon, so what are you doing with the house. >> we are trying to do a short sale. we had somebody lined and up it fell through, so we're hoping
to see what happens in january with a prospect, but if not, i'm going to have to let it go and go into foreclosure. >> you can't have this thing around your neck. >> exactly, and the condition of the job, to work for the chicago public schools, you have to live in chicago. >> lee gallagher, you wrote a book about how people are struggling with home ownership, driving 30 miles to your job in the city is not practical. and you think that many people will make the move that they made. >> i do. it was very forward thinking. you were spending $1,000 a month and two hours a day getting to and from your jobs, and that's two hours that you're not spending with your children, and that's money, if i'm right, about the same as your housing costs each month. and that's not sustainable for a lot of people. we sell people on this american dream. drive until you qualify, so you can have the house and the yard. and it's not the dream that many people imagine it to be.
so you guys are very on trend going back to championship, where you have more time in your day, and you have a beautiful home. and you're renting and not everybody needs to own, and a growing number of people are realizing that that's actually liberating on many levels. >> but you have this problem. what's happening with the house you're renting right now? >> it was foreclosed on on the 28th. and we haven't heard anything from the bank, saying, we own it now, and what's your intent? like i had a choice that we want to buy it. and i was like, there's no way we can buy this. >> you're not in any position to buy this. >> that's incredible for the viewers to see. you're the middle class in america, but you're two remarkably brave, resilient women. and i think that we'll keep following you and this will work out and thank you for your
it story, stephanie and cara, and for supporting us through this whole effort. joining us next, jody boleyn and her business partner try to make ends meet. >> it's a long-term struggle of not being able to have basic needs met. basic needs as in food in the refrigerator, shoes to work in. gas in my car. >> you're watching a special edition of middle america, middle class rebuilding the dream.
>> welcome back, we have been giving you stories of middle class families with one tinge in common. living paycheck to paycheck, and this is the first time that they're all meeting together. to help us from washington d.c., ryan mac, a good friend of the hoe, and with us when we launched this coverage. welcome back to you, and you familiarrized yourself with the stories, and there's a similarity of the stories in jody and the sabinos, and that is that they make little advances and face financial setbacks, none of them have the challenges. >> one of the strategies is
making more money, but that's a defensive strategy, and we're doing all that we can to try to squeeze water out of a rock. when i was growing up in subsidized living, my mother had to shop in thrift stores, and she budgeted and made sure that she could do everything that she could to squeeze water out of a rock, and she was diligent and if we are hopeful and prayerful and faithful, we can get things done. >> these are folks squeezing water out of a rock, and is there anything else that you can do? jody, you had unexpected health expenses. >> . >> i have basically medicaid. >> and you've been cutting expenses back, and is there anything else to cut off the list meet. >> basically, i don't spend money. i don't have money to spend. and i've gotten used to not
ever having any money, so i don't spend money. >> you wanted to have a bigger bash for your 25th wedding anniversary and have a vacation, have you been able to do that yet? >> we will, maybe 30, 35, but we will. >> kara and stephanie, you cut out a major expense out of your life by moving into the city of chicago. a large portion of that $1,000 a month transportation bill. you still have some? >> it's not to the extent of the tolls and the parking, because all of that was a major expense for us. right now, only if i catch the bus, and that's $2.25 one way, and that's like going from 20, $30 a day to $4.50. it feels good. brian, you talk about financial
literacy, and how do they get to talk about the economy, where the stock market does well, and housing prices do well, where unemployment is going down. because as you heard from the stories, they are not feeling the trend as we reported it. >> every family on the stage is extremely proud of what they have been able to do. look at the business owner, joni. she's still making t i remember the days of not being able to eat because you wanted to keep your dream alive. but you did things that you were able to do. the open house at christmastime. you said i'm going to sacrifice, and look at the williams sisters. one day you were laid off. and the same day, you went back to find another job, and that became your job. look at phil and diane. one thing that you've been able to do. one thing that i would like to give to you two. panic doesn't pay the bills, but neither does
procrastination. you you have each other. the 25 years that you've been able to make it, and what phil was saying, it's going to work out. that's the type of a mindset that we have to have, not just saying that you don't have to do the work that needs to be done, and meeting twice a month to make sure that you're getting your goals on the line. when you do that, what diane f. when you went back and got that additional certification, sometimes we have to get an additional certification to create additional revenue streams to make sure that we sustain our bottom line. she failed the test but she kept going, and phil supported her through the process. this is what the real american dream is about. aside from pie in the sky, and i'll make $1 million tomorrow. all three of you should be very proud of what you've been able to do. congratulations on your marriage, of the williams sisters there, i loved it. and i was touched. congratulations on your 25 years, and congratulations on
you, jody, for doing what you did. as a business owner, those tears that you cried, i shared those tears, but you kept going, and you found creative ways to drive people into your store every day. and that's financial literacy. >> brian, thank you. thank you for your support of this program. you were with us on day one to help these families come together. and he's absolutely right. congratulations to you all, we have been watching the struggles with you, and you should be proud of it. doesn't mean that the struggles will go away, but coming up, what surprised me personally over the years, the plight of the middle class. "real money," america's middle class, rebuilding the dream.
>> one year ago, we set out to highlight the challenges america's middle class is facing. the goal was to find solutions that could help the middle class thrive, and to underscore to you the importance of a strong middle class, regardless of whether you're actually suffering. what i've learned in the past year, the struggles that the families face are real for them, and they're a major problem for the rest of us. these families work incredibly hard to provide for themselves and to secure their children's futures. they're doing everything right. these should be people who are making it, and what i found, all three families struggle to make things work. they're still just one unforeseen event. one emergency away from disaster, and the security they experience is felt by millions of americans in today's middle class.
doing the right thing is not enough anymore. making mistakes, something that they have all done can be catastrophic. there's no room for error for america's middle class. the stars have to be aligned for the american dream to come true. why does this matter to everyone else? because spending by middle class families fuels the american economy, and fuels jobs and productions desperately needed tax revenue, and that should lift all. now that america's economy is finally appearing on the rebound, there's a feeling among american that's it's lifting yachts. without a strong middle class, america's economy falters, and together we all pay the price. in order for all americans to prosper. the sabinos and the williams and the bowlinss, we need to prosper too. that's our show for today.
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