The middle-class, in its simplest dictionary definition, is the socioeconomic group between the upper class and lower class. And simply put: the middle-class is losing traction.
The last decade has been lost on the middle-class, according to a new study released by the Pew Research Center. For the past ten years, the middle-class has lost wealth and lost income…and shrunk in size.
Middle-class net worth climbed 43% from 1992 to 2001…and then took a dive with the financial crisis, with median wealth dropping -28%…literally erasing two decades of gains.
And since 2000, middle-class median income has fallen -5% (but the middle class isn’t alone – in the past ten years incomes have fallen across all tiers, for the first time since WWII).
In the past ten years, the middle-class shrank in size. But a hollowing out of the middle is not all that new. The recession didn’t help, but the middle has been slimming ranks since the 1970’s, while the upper and lower classes have expanded.
Whatever measure you look at, life is harder today than it was ten years ago from the lens of the middle-class. After a financial crisis, a housing market collapse and a recession that left the jobless rate lingering over 8%…85% of the self-described middle-class say it is harder to maintain their standard of living today. The recession has technically been over for three years, but 62% of middle-class families have cut their spending in the past year because money was tight – and 29% have trouble paying bills.
And today, fewer believe that hard work pays off: 67% of the middle-class agree that “most people who want to get ahead can make it if they are willing to work hard”, but 29% think that “hard work and determination are no guarantee of success”.
So who is to blame for the plight of the dwindling middle? Some would say lawmakers…or banks…or corporations. Some would say the Bush or Obama administrations. In other words, someone is to blame for middle-class problems, but most believe it isn’t the middle-class.
Regardless of blame, the bottom line is that when middle-class Americans “size up their personal economies, they see themselves as both moving ahead and falling behind”.