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tv   Ali Velshi on Target  Al Jazeera  January 15, 2016 9:00pm-9:31pm EST

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>> congratulations, it's called chow beyond the lines. courtney marsh directed the film. it's an os oscar short subject nomination. we'll profile the other oscar nominated films in the coming weeks. ali "on target" is next. >> i'm ali velshi. "on target" tonight, a firsthand look at the harsh reality of the american dream. presidential candidates are making lots of promises designed to appeal to middle class voters. that's no surprise. one obvious reason is that more than half of americans still, still identify themselves as middle class. that's after a great recession
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that knocked many people out of the middle. and even though we are years into an economic recovery a lot of americans who consider themselves middle class continue to struggle to pay their bills and save money for retirement or send theirs kids to school. and that struggle adds power to preliminary pledges to help people whose incomes have gone almost nowhere in years. bear that in mind as you listen to hillary clinton speaking recently in iowa. >> we need a tax system that makes the wealthy pay more and does not tax the middle class. i'm the only candidate running in either party who will tell you my goal, my pledge is to raise incomes not taxes on the middle class. and that's what i think we should be doing. >> forget for a moment that presidents have very little ability to raise incomes. let's focus instead on clinton's pledge not to raise taxes on the middle class. that involves defining who exactly is in the middle class.
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clinton's definition is one that barack obama used when he campaigned for president in 2008. any family that makes more than -- or makes less than $250,000 a year. later in the show i'm going to talk to one economic commentator who says this definition is completely out of touch with reality. one reason is that any family that makes more than $206,000 a year is in the top 5% of the income spectrum in america. i'll also talk to an economist who argues that when you average income over several years many of these people aren't as wealthy as you might expect. but that's for a few minutes for now. for now i want you to forget about people who may earn too much to be considered middle class. i want to return instead to a project that this show launched two years ago, where the economic recover was more than reality, we waded into the issue
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of who was the middle class by first looking at median household income in america. that number was 53,657. that meant that half of all households earned more, half earned less. based on that and other criteria, we set out to find families who earned between 40,000 and $100,000 a year and we found many of them. over the next couple of years, we documented for you the financial balancing act performed by several families, families who made enough to be considered middle class but who often felt left behind. well two years later circumstances have changed both in america and for the families we followed. but here's what hasn't changed, their feeling of economic insecurity, a feeling that politicians are trying to turn into votes. >> middle income in this country is being decimated and we're going to change it. we're going to change it. >> americans are struggling to find or keep middle class jobs. >> i want middle class mean something again.
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>> the plight of the middle class remains front and center into the presidential election season. but jody bolin remains skeptical. >> when i see the potential presidential candidates they say they're doing this but i definitely don't feel any relief. >> from knoxville tfns. >> tennessee. >> it's the long long term struggle of not having basic needs met, like food in the refrigerator. >> to long island new york. >> the car is not turning over. i don't believe this. i'm certainly going to scream in two seconds. oh my god. >> i panicked because if something is going to happen how are we going to pay that? >> to plano, texas. >> i feel like we've gone a step down. >> nearly seven years after the recession ended many americans continue to feel the agony of the middle class squeeze.
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according to a recent survey about 25% of those make over $100,000 a year still live paycheck to paycheck. in 2000, more than 60% of americans considered themselves middle or upper class, compared to barely half, 51%, today. 48% say they are now in the working or lower classes. on this day of great celebration, cara and stephanie had no idea how the vows for better or worse would truly test them in the coming year. >> we had a tumultuous year. >> when we first met cara and stephanie williams in february of 2014 they were already struggling. the blended family of 6 was feeling squeezed both financially and physically in a three bedroom one bathroom house
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30 miles from chicago. >> the struggles of this bathroom. >> when stephanie bought the house in 2007 there was ample room for her and her son. that was before cara and her three kids moved in and by 2014 the house was underwater worth less than the balance of the mortgage. >> it is my american nightmare because it's going to take more to get out of this house than it even was worth getting in it. >> stephanie was a math specialist with a master's degree, cara an i.t. specialist. together they earned more than 100,000 a year enough to put them solidly middle class. but that's not what they felt. >> i actually feel in the lower class. >> their two hour commute including tolls gas and parking set them back about $1,000 a month. other bills included $1100 for
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food, 1029 in housing costs, home repairs needed for aleaky roof, faulty electrical outlets and a broken oven were left on the back burner. gls the gas bill we're at the point now where you're at the cutoff point. >> we should be good and we are so not good. >> delaware valley u.s.a. one of the world's largest single unit housing developments. >> owning a home has been the cornerstone of the middle class american dream but the williams overwhelmed by suburban home ownership readily gave up the dream. they were relieved to find a spacious duplex rental they could afford in chicago but a few months after they moved in there was disturbing news. the owner of the apartment was in foreclosure. >> totally disbelief and shock at that moment because here i am thinking that i found my perfect home. and the next thing i know, it was a gut punch. >> they were looking for a new
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place to live when yet another devastating blow hit. >> chicago public schools were going through budget issues, and our office basically our whole office except for you know a few people was wiped out. >> for the first time in her adult life, stephanie is jobless. >> yes i was physically ill. i cried. i cried for some days. maybe probably about a week, you know. very depressed. didn't want to get out of the bed. >> reporter: already investigating the south as a cheaper place to live cara discovered texas landlords offered so-called second-chance leases. >> they give leases to people that may have challenges on their credit. >> to their monumental relief the application for a four bedroom two bathroom apartment in plano texas was accepted. so this august the family packed up once more and headed south. their already precarious perch in the middle class seems more
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at risk than ever. >> we had to basically take handouts which we're both proud women, which is hard to do. >> jody, the single mother of one, firmly entrenched in the middle class has also swallowed her pride to receive aid. >> it's been a very hard year for me harder than i've ever expected, i've even made less money this year than previous years. >> jody's once thriving business had still not recovered from the after shocks of the recession. in february of 2014 she took a gamble by moving her gift shop to a more affluent part of knoxville. despite numerous attempts oboost sales in the new location she had many dark days. >> sales are not where they need to be and there's still half of what the store was doing at the previous location. not able to pay my mortgage at this month so there's some real stressors on me right now.
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i'm doing everything i can to stay afloat. >> a year later, her efforts began to pay off. >> 1693. >> the store is now seeing a steady increase in profits. but jody isn't confident her good fortune will continue. >> i'm fearful this level will sustain because i've had no consistency in my business for so many years. it's going to take a lot for me to feel secure. >> jody's son julian has been busing dishes at a local restaurant. >> where i go to school now i can post some music and record it. i think i want to pursue that and be a producer. >> but like many middle class parents the $37,000 a year tuition for boston based school is beyond jody's budget. >> there's just no way. however he can get the degree
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online, which is about $15,000 a year. >> experiencing his entire university education online was not the college life julian envisioned. >> every other night i would be look at like scholarships i could apply for. and i always thought that i would be able to go to college because i feel like i'm there academically, i could do it, you know. but i'd feel -- i just didn't like the idea of being in debt. >> jody says even at $15,000 a year the tuition would be a stretch. >> thank you god for this meal. >> but she remains optimistic that a combination of financial aid and steely determination will turn the american dream into an american reality for both mother and son, whether or not presidential campaign promises come true. >> coming up the mysteries of the middle class america. why some of them aren't who you think they are.
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written everyday. it's not always pretty, but it's real... and we show you like no-one else can. this is our american story. this is america tonight.
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>> tonight we're talking about america's middle class and who exactly should be considered part of a group that every politician seems to want to impress. democratic candidate hillary clinton says the middle class including any family that earns $250,000 or less in the year even though the median income was about 54,000 a year, median means half earn more, half earn
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less. new york times clinton's definition is quote out of touch with reality. hiss piece spark sparked allison shager, the definition of milt class is not about the haves or the have nots, it is more nuanced than one year's income. they both join me, thank you to both of you. you are not in opposition to each other but you are representative of a struggle that we have had on this show for a couple of years. we started out thinking allison it could be a pretty easy project to figure out who the middle class was, but it depends who you are and what your circumstances are. >> a lot of different ways to measure it, with income and wealth. in some ways wealth is a better measure because it gives you a better sense of financial health but even income, your income varies a lot over time. you can be on a middle class
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earning track but you can be on a different trajectory during your earning life. >> for the last two years, all of which bring in more than 100,000 a year they were immediately set back when things went wrong when something broke, a car broke or someone lost a job. so they had income that bryce would argue was better than middle class income but they had nothing to fall back on. that seems to be something americans are feeling. >> americans are chronically undersaving, these people who have $300 in the bank, or if anything at all, maybe a couple hundred thousand in a retirement account. if their car breaks down, if they lose a job, get a divorce, it can spell medical disaster. >> bryce you've made an interesting counterexample. in new york, a high cost of living place in america, i just read that the average apartment is well over $1 million in new york that the median income in
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new york is $58,000. is median the right way to look at this? >> well, depends on what we're talking about right? i think a lot of people in this country, i understand where it's coming from see middle class not based so much on numbers but on a state of being, a standard of living because that's a way a lot of politicians talk about it. that's the way a lot of us talk about it. but middle class means something based on numbers. it is the people in the middle and we have a lower class and upper class and if we are looking at median income, which is a good prks o approximate ofs going on, median income is 58,000 a year. while i understand how expensive it is to live here and i understand that a quarter of a million dollars can feel like it doesn't go very far, you also have to recognize how much more you're making than so many people in your own city. >> so everybody takes a stab how to figure out what middle class
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is and we've morphed into affordability thing. they say these areas are affordable because the median price of a house bears somewhat to median income, you cannot earn 58,000 a year and comfortably buy a house or have a contingency fund if anything goes wrong with your car or your house. >> there's a difference between having a certain income and making choices what you do with that income and feeling stretched and not having the income that puts you into that higher limit. if you make a quarter of a million dollars and you are spending money on vacations and private school or whatever else that may be, that's totally fine but those choices that leave you with less money don't mean that you are necessarily in new york's or this country's middle class. i agree about the point on wealth. i think wealth is actually incredibly important because it is that accusation and in theory you should have something to
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fall back on. but we do have to remember the context we are talking about here is taxes. and tax policy is going to be aimed at income and so when we're trying to figure out our tax brackets a middle income tax bracket should be looking at middle income. >> if you do what hillary clinton says and you consider 250,000 the cutoff for middle class your pro middle class tax policies won't be as aggressive for those who do earn 50, 60, 70, $80,000. >> we can talk about the feeling of middle class or whatever it is but when we're coming down to the hard numbers a pledge like hillarhillary clinton's which lt been made by a lot of democratic candidates. >> a lot of people like this number 250,000. >> they like this number but it locks you in and obama made this pledge and he saw this firsthand. he wanted to change the way we help families save for college. help the lower and middle classes by taking a little money
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through a tax change through certain savings account. technically it would have violated the pledge he made because certain families who earn more than 250,000 would have seen their taxes go up a little bit. he couldn't do it. a week after he said he wanted to, he dropped the whole idea. which goes to show you are limiting the policy choices you can make for actually helping the middle class if you get the definition wrong. >> allison 250,000 put you in america in the top 5% of earners if you are in a household that earns 250,000. i'm sympathetic with your view, we've struggled with this over the last two years. the families we saw all have household incomes over $150,000, should be comfortably over middle class but nothing about them are can comfortable. top 5% of earners are considered
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middle class? >> not necessarily. looking at earning distribution, it tells you something but not everything. first of all more informative about financial well-being, earnings trajectory over their entire lifetime and how variable their income is year to year. usually hire earners have more variable income, the woman like the small business owner, she has some good years and bad years and average out. the study i read found that actually 36% of americans will make in the top 5% at least one year in their life but very few will earn that for three ofive years. >> bryce does that not argue that the middle class is a state of mind? i know you don't like that because you like the numbers. but we found it very hard. we found it was easier to say that the middle class represented the idea that rightly or wrongly you could own a house, your kids could get education at a state school, you could get sick and not be
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bankrupted by it. >> i'm sympathetic by it but we definitely need to stick to the numbers, the middle class needs to mean something. your difficulty nailing this down shows that the way we use the word middle class has come to mean less and less and therefore it comes to mean less of a useful term. >> why we don't use medians is if you average things out one side or the other is going to weigh it incorrectly. but even the median doesn't tell the right story. in manhattan, the average earn much more than 50,000 and, five delivery guys living in an apartment in the far reaches of manhattan versus you know somebody living in a fantastic posh place in the middle of it. does the median really tell you enough of a story? >> well, certainly whatever we define the middle class is it's going to be a swath, right? not just people who make 53 with
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the decimal points. but you want to make sure that that swath makes sense and correlates to where americans really are. and if you're in the top 5%, if you are earning over that $250,000 a year mark you are in a group that is doing better and better. your incomes have been going up by 88,000 over the past 50 years. >> and if you're in that group that's earning $53,000 your incomes have been stagnant and probably even lost ground. >> that's a little of a simplistic way to look at it. because american flk incomes of individuals go up each year which suggests as a society we're not getting richer. you really need to break it up by people answer earnings trajectories. that tells you a nuanced story of where someone is. >> interesting discussion we'll continue to have it. bryce covert and allison schrager. a look at states suing
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inmates to cover their prison costs.
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>> it's a growing trend in states across america, making prisoners pay for the cost of theirs incarceration. it's a huge financial burden to
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the families of the people behind bars. andy rosegen has more. >> melvin moore is just learning how to use a smartphone and a computer after getting out of prison. while sitting in prison he was thrilled to learn that his grandmother was going to leave him a small inheritance but before moore found out how much he was getting, before he saw a dime of it, before he got out the illinois department of corrections learned out about the inheritance and told the state attorney general lisa madigan about it. >> it's crazy. >> she then sued moore for his room and board in prison. $338,000. >> it was a shock to me when i first saw it then, when i started thinking about it i was you know i was upset about it because i didn't understand and i still don't understand it. >> the attorney general's office is relying on a 1982 law that allows the state to sue to recover money for room and board. it's a law the state is using
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more and more in recent years as are other states. brian nelson of the uptown people's law center focuses on people's rights and he says an inmate is basically helpless. >> there is a rule you have to disclose assets to the department of corrections. if you are an inmate or a convict you don't disclose this they can put you in segregation for six months. because you didn't tell them where your money was, so they can take it from you. >> the state took what was left. >> i felt like they was rushing to take it because they told me you can't have an attorney. unless i probably would have paid for one which i didn't have the money to do. >> illinois attorney general lisa madigan admitted to us in a statement that the law indeed may raise roadblocks to inmates trying to lead successful lives
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and moral questions that legislators need to address. the department of corrections told us in a statement that it decides who to sue on a case-by-case basis and a wide variety of factors are considered. in most cases the amount of money recovered from inmates is a drop in the bucket for the department of corrections 1.5 billion budget. and in some cases critics say the state is retaliating against inmates who win lawsuits for inhumane treatment. there are plenty of reasons for an inmate to sue. >> illinois's prison system is worst in the country. worse than california. >> in what way? >> health treatment, medical treatment, overcrowding. >> the law simply doesn't make sense, one person says. >> if you want to make sure people commit more crimes, wind back in prison a great way to do it is to take away everything
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they have. >> melvin moore says as tough as things are for him right now, he can't help think of a grandmother who left him that inheritance. >> she wouldn't have given it to me if she knew they would have taken away from me. some way to fit in, i still -- i don't fit in. >> andy rosegen, al jazeera, chicago. >> and that's our show for today. i'm ali velshi. thank you for joining us, the news continues here on al jazeera america. approp

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