Pew report documents lost decade for middle class
Over the past 10 years, America's middle class has diminished in size, slid backward in income and wealth, and lost some of its faith in the future, according to a recent report from the Pew Research Center.
The report notes that this "lost decade" is unique in the modern era in that it is the only decade in which real incomes fell for families in every economic stratum examined. Furthermore, Middle class wealth saw a particularly striking drop during this period. Median net worth for middle-tier households fell 28 percent, dropping from $129,582 at the start of the decade to just 93,150 in 2010. During this interval, the median wealth of the upper-income tier changed little, experiencing 1 percent growth. By contrast, the wealth of the lower-income tier dropped by 45 percent, from $18,421 to $10,151.
The report also found that the middle class' share of U.S aggregate household income has contracted, while the upper tier's share has increased. Upper-income households possessed 46 percent of U.S. aggregate household income in 2010, compared with 29 percent in 1970. Middle-income households accounted for 45 percent of aggregate household income in 2010, down from 62 percent in 1970. Low income households held 9 percent of aggregate income in 2010 and 10 percent in 1970.
In addition to analyzing census data, the report's authors also surveyed a nationally representative sample of individuals regarding their views of their economic situations. The number of respondents who identified as lower-middle or lower class was 32 percent, up from 25 percent in 2008, while 17 percent identified as upper or upper-middle class, down from 21 percent in 2008. Adults aged 65 and over were more likely than other demographic groups call themselves middle class, and less likely to call themselves lower-class. An increasing number of young adults ages 18-29 (39 percent) identified as lower-middle or lower class, up from 25 percent from 2008.
Concerning their overall economic situation, 42 percent of respondents said that they were worse off now than when the recession began in 2007. 85 percent said that it was harder for them to maintain what they considered a middle class lifestyle than it had been ten years ago. However, 32 percent said they were better off and 23 percent reported no difference. Additionally, the report found that minorities and younger adults were more optimistic than average concerning economic mobility for themselves and their children, even though these groups were among the hardest hit during the recession. Respondents also exhibited a less than optimistic view toward the future. 43 percent of middle class adults surveyed said that they expected their children's standard of living to be better than their own at the same age, down from 51 percent in 2008. 26 percent expected their children's standard of living to be worse, up from 19 percent in 2008. The percentage of respondents who expected their children's standard of living to be unchanged was 21 percent, the same as in 2008.
Although the period from 2001 to 2010 was marked by broadly felt economic hardship, some groups fared better than others. On the report's list of winners are individuals who are, 65 and over, widowed, married, white, native born and female. These groups all experienced some rise in income status, with the 65 and over group experiencing the greatest gain. Groups that experienced the most decrease in income status included those who, are separated or divorced, had some college, have never married and who possessed only a high school diploma.
Article posted on September 10, 2012