Shifting Social Classes
Whether you're rich, poor or somewhere in between, every American holds a unique spot on the social class ladder. In April 2006, The Oprah Show tackled this topic for the first time . Back then, the economy was booming and class structure was stable. "People had a solid understanding of where they stood," Oprah says.
Today, things are much different. As the country deals with one of the worst recessions in history and 13 million people face unemployment, social classes are shifting. Many Americans who once considered themselves middle class now feel closer to the bottom.
See how people really perceive social classes.
More than 30 million people are now relying on food stamps, and experts say the gap between the rich and the poor is widening.
Today, things are much different. As the country deals with one of the worst recessions in history and 13 million people face unemployment, social classes are shifting. Many Americans who once considered themselves middle class now feel closer to the bottom.
See how people really perceive social classes.
More than 30 million people are now relying on food stamps, and experts say the gap between the rich and the poor is widening.
Compared to many countries, Robert Reich , former U.S. secretary of labor for the Clinton administration and a professor of public policy at the University of California, Berkeley, says America doesn't have a strict class structure. If you're born into a low-class family in the United States, he says you can improve your social status by focusing on two factors—income and education.
Generally, Robert says the typical middle-class family earns about $50,000 a year. "Most economists assume that if you are earning, as a family, between $30,000 and $70,000 or $80,000, you're solidly middle class," he says. "Although, it does vary in different parts of the country."
Robert says getting a college education or having a respected profession can also improve a person's class.
Generally, Robert says the typical middle-class family earns about $50,000 a year. "Most economists assume that if you are earning, as a family, between $30,000 and $70,000 or $80,000, you're solidly middle class," he says. "Although, it does vary in different parts of the country."
Robert says getting a college education or having a respected profession can also improve a person's class.
Haley says she was solidly middle class growing up. Her parents worked to send her to a prestigious college, where she became involved in extracurricular activities and completed three internships.
After graduation, Haley got a job with an interior design firm in Chicago, but a few months into her career, she received an unexpected blow. Like millions of Americans before her, Haley was laid off.
Watch other college grads discuss education and debt.
"I was shocked," she says. "I thought I had done everything right."
Since then, Haley says she's dropped in social class and is now living at poverty level. "I never had to deal with being poor," she says. "It's humiliating."
After graduation, Haley got a job with an interior design firm in Chicago, but a few months into her career, she received an unexpected blow. Like millions of Americans before her, Haley was laid off.
Watch other college grads discuss education and debt.
"I was shocked," she says. "I thought I had done everything right."
Since then, Haley says she's dropped in social class and is now living at poverty level. "I never had to deal with being poor," she says. "It's humiliating."
After losing her job, Haley says she had to go to the unemployment office for the first time in her life, which proved to be an eye-opening experience.
"I saw people, men in business suits. I saw people who wanted to retire. I saw people with families," she says. "I would have to say, I was ignorant before I went to the unemployment office. I thought people [who] were unemployed were unmotivated, uneducated, and that's not what it is like right now in this world."
Now, Haley says she has a completely different opinion about what it means to be unemployed in America.
"I saw people, men in business suits. I saw people who wanted to retire. I saw people with families," she says. "I would have to say, I was ignorant before I went to the unemployment office. I thought people [who] were unemployed were unmotivated, uneducated, and that's not what it is like right now in this world."
Now, Haley says she has a completely different opinion about what it means to be unemployed in America.
There was a time when Wendy and Martin, a couple from Illinois, were perceived as upper-middle-class Americans…but not anymore. "We've really been hit hard by this recession," Wendy says.
Wendy once owned two successful salons, but in February 2009, she closed the doors for good. These days, she does hair out of her home to pay the bills. The recession also forced her husband, Martin, to close his housing business.
With bills piling up, Wendy and Martin say they can no longer afford to treat their friends to dinner or host lavish parties. Since they dropped to a lower social class, Wendy says the phone doesn't ring as often. "It made me feel so sad just to think that people I would talk to or associate with on a daily basis weren't my friend anymore," she says. "They know the well is dry."
Wendy once owned two successful salons, but in February 2009, she closed the doors for good. These days, she does hair out of her home to pay the bills. The recession also forced her husband, Martin, to close his housing business.
With bills piling up, Wendy and Martin say they can no longer afford to treat their friends to dinner or host lavish parties. Since they dropped to a lower social class, Wendy says the phone doesn't ring as often. "It made me feel so sad just to think that people I would talk to or associate with on a daily basis weren't my friend anymore," she says. "They know the well is dry."
Even before the recession hit, economists say middle-class men and women had too little savings and too much debt. Now, Robert says America's confidence is shaken by downward mobility.
"A lot of Americans who were in the middle class never thought they would suddenly lose their middle-class status and be poor," he says. "It's an eye-opener, and it is a shock."
Robert reminds Wendy and Martin that there are millions of other couples in their situation and this is a temporary setback for many.
"I hope that whatever you felt about your own failure or your own inadequacy, you understand it's not you. You did not do anything wrong," he says. "The economy is doing it to an awful lot of people."
"A lot of Americans who were in the middle class never thought they would suddenly lose their middle-class status and be poor," he says. "It's an eye-opener, and it is a shock."
Robert reminds Wendy and Martin that there are millions of other couples in their situation and this is a temporary setback for many.
"I hope that whatever you felt about your own failure or your own inadequacy, you understand it's not you. You did not do anything wrong," he says. "The economy is doing it to an awful lot of people."
For 26 years, Ernie Bjorkman was a popular anchorman in the Denver area. During this time, he met presidents, flew on Air Force One and lived a life of celebrity and wealth.
Then, in December 2008, his celebrated career came to a sudden end. Ernie was fired, and his six-digit salary was gone in an instant. When the severance package he was promised fell through, Ernie and his wife, Susan, found themselves facing a financial crisis.
Fortunately, Ernie had been studying veterinary care and got a job at an animal hospital. The bad news? He earns 80 percent less than he used to. "[We're] living like we used to live when we were first married 36 years ago," he says. "[We] get a cheap six-pack of beer and invite friends over to play cards."
Then, in December 2008, his celebrated career came to a sudden end. Ernie was fired, and his six-digit salary was gone in an instant. When the severance package he was promised fell through, Ernie and his wife, Susan, found themselves facing a financial crisis.
Fortunately, Ernie had been studying veterinary care and got a job at an animal hospital. The bad news? He earns 80 percent less than he used to. "[We're] living like we used to live when we were first married 36 years ago," he says. "[We] get a cheap six-pack of beer and invite friends over to play cards."
Before Ernie lost his job, Susan never had to worry about having enough money for groceries and basic necessities. Then, she learned a tough lesson the hard way.
One afternoon, Susan says she went to the grocery store with reusable bags and filled them with food.
"I packed all my groceries up and wrote my check and [the clerk] said, 'Sorry, your check's been declined,'" she says. "And I said, 'Oh, no way. There's no way.'"
Susan assumed there had been a mistake and went to a nearby store to do her shopping. After filling another cart, she says she was humiliated for the second time when her check was declined once again. "Our final paycheck had run out, and we didn't realize it," Ernie says. "So as I said, we are now walking the walk of a lot of people in this country."
One afternoon, Susan says she went to the grocery store with reusable bags and filled them with food.
"I packed all my groceries up and wrote my check and [the clerk] said, 'Sorry, your check's been declined,'" she says. "And I said, 'Oh, no way. There's no way.'"
Susan assumed there had been a mistake and went to a nearby store to do her shopping. After filling another cart, she says she was humiliated for the second time when her check was declined once again. "Our final paycheck had run out, and we didn't realize it," Ernie says. "So as I said, we are now walking the walk of a lot of people in this country."
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Despite the financial hardships they're now facing, Ernie and Susan say they wouldn't change anything about how they've lived their lives. "We've learned some good lessons," Ernie says. "Hindsight is 20/20."
The biggest lesson? You can be just as happy with less money.
"My favorite saying is, 'You make plans in life, and God laughs.' And he's having a good laugh right now—hopefully with us, not at us," Ernie says. "I think that laughter will be our strength in the future and our wisdom to maybe not be as extended as we were … and to live a simpler and much more frugal life."
The biggest lesson? You can be just as happy with less money.
"My favorite saying is, 'You make plans in life, and God laughs.' And he's having a good laugh right now—hopefully with us, not at us," Ernie says. "I think that laughter will be our strength in the future and our wisdom to maybe not be as extended as we were … and to live a simpler and much more frugal life."
Before becoming an anchorman, Ernie says he dreamed of becoming a veterinarian. Then, he says he married Susan, and life got in the way.
"I had a wonderful career as a broadcaster," he says. "But I always knew the broadcasting thing would come to an end. Hopefully it was going to be on my terms in a couple of years, but it [wasn't]."
After one week as a veterinary technician, Ernie says he's finally found his true calling. "It's a passion; it's not a job," he says. "I love it."
"I had a wonderful career as a broadcaster," he says. "But I always knew the broadcasting thing would come to an end. Hopefully it was going to be on my terms in a couple of years, but it [wasn't]."
After one week as a veterinary technician, Ernie says he's finally found his true calling. "It's a passion; it's not a job," he says. "I love it."
For years, Jamie Johnson , the 29-year-old heir to the Johnson & Johnson fortune, has gone against his family's wishes to expose how superrich families in America really live. In his documentary films and weekly VanityFair.com column, Jamie shows how this exclusive 1 percent thinks, acts and spends.
Don't let their fancy cars and designer clothes fool you. Jamie says the recession continues to send shock waves through the upper class.
"I think there's been an assumption among the rich for the last 25, 30 years that fortunes were only going to grow because that's what's been happening," he says. "This recent crisis really terrified a number of rich people, and they started to think, 'Oh my God, maybe it's not inevitable that I'm going to become richer and richer.'"
Don't let their fancy cars and designer clothes fool you. Jamie says the recession continues to send shock waves through the upper class.
"I think there's been an assumption among the rich for the last 25, 30 years that fortunes were only going to grow because that's what's been happening," he says. "This recent crisis really terrified a number of rich people, and they started to think, 'Oh my God, maybe it's not inevitable that I'm going to become richer and richer.'"
To see firsthand how the recession is affecting megarich families, Jamie heads to New York City. There, he talks to Nick Mele, the grandson of a legendary Washington, D.C., socialite, who works as a freelance photographer.
Over the years, Nick has photographed charity galas and fancy parties in communities like Newport and Palm Beach. Since the stock market began to plummet, Nick says he's noticed that some people are scaling back. "[Events] aren't nearly as full as they used to be," he says. "When so many people are having a tough time right now, to flaunt how much money you have is just bad taste."
Serena Merriman, one of Manhattan's "it" girls, says the recession is also affecting fashion. "I think there's been a trend to mix high and low fashion," she says. "I think people are embarrassed to be wearing really expensive clothes or to be carrying handbags with big logos on them."
Over the years, Nick has photographed charity galas and fancy parties in communities like Newport and Palm Beach. Since the stock market began to plummet, Nick says he's noticed that some people are scaling back. "[Events] aren't nearly as full as they used to be," he says. "When so many people are having a tough time right now, to flaunt how much money you have is just bad taste."
Serena Merriman, one of Manhattan's "it" girls, says the recession is also affecting fashion. "I think there's been a trend to mix high and low fashion," she says. "I think people are embarrassed to be wearing really expensive clothes or to be carrying handbags with big logos on them."
While some wealthy families are terrified about the state of the economy, Jamie says others are secretly pleased. They see this as an opportunity to get even richer.
"They're looking around, and they're saying: 'Wow, we still have a lot of money. Most people don't have any money to invest. Prices of everything are going down. Real estate is cheaper. Stocks are cheaper. Let's make some long-term investments that are going to keep our families rich for several generations into the future,'" Jamie says.
"They're looking around, and they're saying: 'Wow, we still have a lot of money. Most people don't have any money to invest. Prices of everything are going down. Real estate is cheaper. Stocks are cheaper. Let's make some long-term investments that are going to keep our families rich for several generations into the future,'" Jamie says.
Social class in this country is shifting for many people, including Cheryl, a recently laid-off mom and wife. Cheryl says she spent years climbing the corporate ladder. "I was going to do whatever it took to get us to the point to where we didn't have to worry about bills," she says.
At one point, Cheryl and her husband were bringing home a combined income of $95,000, but then she lost her job. Without her paycheck coming in, Cheryl's family slid into a downward spiral. Now, she says they're struggling to put food on the table and pay the mortgage on their home.
"Never in a million years did I think that we would be standing in the space that we're in, not having any money in the bank and having no savings," she says. "I feel like we are about to end up on the street."
At one point, Cheryl and her husband were bringing home a combined income of $95,000, but then she lost her job. Without her paycheck coming in, Cheryl's family slid into a downward spiral. Now, she says they're struggling to put food on the table and pay the mortgage on their home.
"Never in a million years did I think that we would be standing in the space that we're in, not having any money in the bank and having no savings," she says. "I feel like we are about to end up on the street."
A few miles away from Cheryl, another mom finds herself in the opposite situation. Terry, a 44-year-old single mother, is steadily moving up in social status.
Terry spent most of her life living in a low-income neighborhood, but then a voucher from a federal housing program lifted her out of poverty and into a middle-class community. "The neighborhood that I walk through is like a whole different planet," she says. "I like the serenity I have out here…the peace of mind."
With steady work as a deli clerk at a nearby grocery store, Terry is able to pay her bills and enjoy simple luxuries like a walk-in closet. "I don't hear car sirens and bickering and talking under my window all night long," she says. "I sit on my balcony and listen to the birds."
Terry spent most of her life living in a low-income neighborhood, but then a voucher from a federal housing program lifted her out of poverty and into a middle-class community. "The neighborhood that I walk through is like a whole different planet," she says. "I like the serenity I have out here…the peace of mind."
With steady work as a deli clerk at a nearby grocery store, Terry is able to pay her bills and enjoy simple luxuries like a walk-in closet. "I don't hear car sirens and bickering and talking under my window all night long," she says. "I sit on my balcony and listen to the birds."
Oprah says this recession may serve as a wake-up call for many Americans. "This was a shake 'em up, wake 'em up to get us back to some semblance of the center," she says.
For years, Robert says people have filled their homes with stuff to emulate the upper class, and in doing so, they dug themselves deep into debt. While the situation may look bleak now, Robert says there's a silver lining.
"The economy will get better. I can't tell you exactly when it's going to happen—probably next year," he says. "But I hope we don't lose sight of what we've learned in terms of what really matters and what really counts."
More reflections on social class
Discover ways to live with less.
For years, Robert says people have filled their homes with stuff to emulate the upper class, and in doing so, they dug themselves deep into debt. While the situation may look bleak now, Robert says there's a silver lining.
"The economy will get better. I can't tell you exactly when it's going to happen—probably next year," he says. "But I hope we don't lose sight of what we've learned in terms of what really matters and what really counts."
More reflections on social class
Discover ways to live with less.
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