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For many families, gap's getting wider PERCENT CHANGE IN FAMILY INCOME SHARE: 2005 RELATIVE TO 1953
Middle class is falling behind

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Date published: 10/26/2008

By HOWARD OWEN

Should the American middle class be placed on the endangered species list?

The numbers suggest that while the rich are getting richer, not only the poor but also everyone in the middle are getting poorer.

That was the main message of a tele-seminar presented last week by the Foundation for American Communications, titled "The Middle Class Squeeze."

"The vulnerability of the middle class is really increasing," said Kristen Lewis, who led the seminar. "Middle-class families are looking more like working-class or poor families."

A few facts:

One percent of Americans control about one-third of the wealth.

Real median household income is $48,200, down $1,175 from 2000 figures.

Because mortgage payments, utilities, food, day care, health insurance and just about everything else is up over that same period, the median household's expenses are up about $4,600.

To make ends meet, the average household has about $8,500 in credit card debt, and the average college graduate finishes school with about $20,000 in educational debt.

Forty-five million Americans have no health insurance. Over a two-year period, 80 million will go without health insurance at some point.

You get the picture.

Lewis, co-author of "The Measure of America," whose subject is the growing gap, says the middle class isn't in its current malaise because of too many lattes.

"Fixed expenses are putting families under water, not sneakers or takeout [food]," she said. "Taken on the whole and on average, that's not what's driving the middle-class squeeze."

To make matters worse, the middle class seems to be working harder for less.

Americans, Lewis said, work more hours on average than they did 30 years ago, and we work about 350 hours more a year than our counterparts in peer countries in Europe.

And while household incomes are up, much of that is because Mom and Dad both are working, where a similar family might have gotten by on one income in the past.

"Relying of two incomes doubles vulnerability," Lewis said. "In the past, if the mill closed, there was this extra worker, sort of an insurance policy in a second potential income. Now, that income is already being counted on, not something you keep in your back pocket just in case. If one person loses his job, you're in bad shape."


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TOP 5 PERCENT

Share of income has gone up significantly for the top 5 percent of U.S. households.

BIG DROP FOR MOST

Share of income has gone down for 80 percent of U.S. households.

35%

30%

25%

20%

15%

10%

5%

0%

-5%

-10%

-15%

-20%

-25%

-30%

-14.9

-23.2

-15

-4.2

--Author's calculations, based on data from the U.S. Census Bureau

POOREST 20%

20%--40%

40%--60%

60%--80%

family income share