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Last Updated: Wednesday, 22 September, 2004, 22:48 GMT 23:48 UK
US middle classes feel the pinch
By Donna Bertaccini
In New York

Russell Blumenthal
Mr Blumenthal is worried about the direction America is taking

Two years ago, Russell Blumenthal was so depressed about the state of the US economy that he moved to Thailand.

After being laid off from a major fund-management company, he cashed in his pension and hit the road.

Mr Blumenthal is fortunate enough to have savings, but like millions of other of the weak US job market, he is worried about the future.

"I was laid off because of my age and income," he says.

"I'd like to know what the future holds for 54-year-olds like myself. Nobody is talking about our stories in this election. So many people don't have any options, and that's a shame."

As the election approaches, could this economic disaffection play a serious role?

Changing direction

In his stump speeches that address the economic outlook, President George W Bush insists that the economy has turned the corner, after a difficult couple of years.

The millions of voters who are still unemployed are hoping this indicates a reviving economy and job expansion.

Lincoln Lewis completed a degree in Communications and Media from New York University a year ago, and has been unable to find a job.

"Frankly, I'm sorry I stayed in school to complete my Masters," he says.

"I thought it would make me more marketable. But everywhere I go, employers tell me I'm over-qualified.

"This is not the way capitalism is supposed to work."

Outsourcing woes

Richard Evans, a computer programmer whose job at IBM was outsourced domestically several years ago, identifies a feeling of alienation among the working population, as well as the unemployed.

"Companies have changed," he says.

"They will continue to move jobs overseas as they see fit, and there is nothing that the government can do to stop it. Many of my friends, after decades of service, are being let go without health insurance or job prospects.

"At least I have a job. But I'm worried, and I am worried for my friends."

Mixed signals...

At the other end of the spectrum, the twin engines driving the US economy - consumer spending and the housing boom - continue to chug along nicely.

Privately owned housing starts in July were up 8.3% from the previous month; wholesale turnover and inventories - key indicators of underlying activity - are also healthy. And retail sales are (just about) continuing to rise, despite warnings that high fuel costs will start to choke off demand.

The signs are mixed, however. While the keenest consumers continue to spend, personal bankruptcies are on the rise, and the number of people below the poverty line has increased by 11%.

In electoral terms, this has created a curious impasse: President Bush claims the economy is healthy; his opponents insist it's struggling. And economists are more divided than ever.

... and mixed feelings

Understandably, voters are divided, too.

And the importance of Independent voters this upcoming election is becoming increasingly apparent.

Roger Miller, an independent voter who works for Citigroup, says the Democrats have failed to cash in on the disaffection.

"John Kerry may seen nicer, but he's not forceful enough," he says.

"I'm voting for Bush. The tax code needs simplification and the economy is picking up. People who got laid off will find other jobs.

"I don't agree with the steel tariffs President Bush enacted... but his general handling of the economy has been good."


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