The phrase, “typical middle class family” may no longer apply to the same amount of people. It seems that the declaration of a “chicken in every pot and a car in every garage” along with a house with a yard, 2.5 kids, and a solid retirement are the faded memories of past generations.
The decline of the middle class has been the topic of social and political discussion, particularly since the onset of the Great Recession in 2007. While the economic forecast seems to be improving, according to the latest census, the middle class is vanishing.
There is no set parameter to be defined as middle class. Generally, the middle class is defined as households making between $35,000 and $100,000 a year. The wide cast of income and the quality of life it provides can be influenced according to geography. A yearly income of $50,000 a year may provide a secure life in Wisconsin, but the same income would be gobbled up by residential fees in San Francisco.
Like the definition, the middle class has always been subject to flux. There was a period of prosperity that caused the middle class to shrink in the late part of the 20th century, but since 2000, the opposite has occurred, with drastic unemployment and subsequent loss of income.
As reported by the New York Times, the Census Bureau has kept data on household income since 1967. The 10-year income trends highlight the great 21st-century wage slowdown and clearly indicates that there has been a decline in the share of households that qualify as high income.
So who are these families that are being affected? Younger households, those headed by people aged 30-44, are more likely to be lower income than the same group in 2000. While older households have maintained their status, more people are working into their late 60’s. However, households headed by people 65 and older are finding themselves in the lower-income group, versus the middle-to-upper income group as they were in 2000.
People in the middle class are more likely to have a college degree, but that is not a guarantee. It is true that the possession of a college degree is more important now versus the 1970s. Back then, high school graduates without a four-year college degree were well represented among the middle and upper class due to jobs in manufacturing. Now, the stable, blue-collar jobs have been outsourced. College graduates haven’t fared much better. Since 2000, incomes have dropped and they are less likely to be high income than they were in 2000. While having a college degree does help, it is not an absolute.
Middle class people are predominantly white. However, the gap has widened a bit in the past 15 years. According to the New York Times, half of black households were lower income in 2013, while 43 percent of Hispanic households were; both numbers have risen 5 percentage points since 2000. Asian households, by contrast, are slightly less likely than white households to be low income.
Of course, having children can affect income. Traditionally, when one thinks of the middle class, it conjures up the idea of the married couple with school-age children. The reality is much more complicated. Not every couple chooses to marry and families are blended. Many children are raised by one parent. The difference in income is not surprising. Families with two adult wage earners make up a disproportionately large share of the upper-income group. Households with one adult, by comparison, are overrepresented among the lower-income group.
The most troubling trend is how American society is bifurcating and squeezing the middle class out of existence. As reported on the Guardian, the U.S. Census Bureau has released a survey showing that one in six Americans now live in poverty: the highest number ever reported by the organization. The Guardian went on to note that real median household incomes dropped 2.3 percent in 2010 from the year before, reflecting the decline of the middle class.
The Guardian added that at the same time, the richest 20 percent of the U.S. population now controls 84 percent of the wealth. In fact, so staggeringly unbalanced has America become that the richest 400 American families have the same net worth as the bottom 50 percent of the nation.
Now, to cheer up, watch this video about what makes America great. To read more about the middle class, click here.