WASHINGTON—The U.S. middle class is facing its “worst decade in modern history,” with its share of the country’s income falling for the first time since World War II, a new report says.
The Pew Research Center study says 85 per cent of middle-class Americans feel it is more difficult now than a decade ago to maintain their standard of living. The report describes them as losing faith in the future.
Their share of the national income has been surpassed by affluent earners as median wages stagnate and wealth concentrates at the top in a relatively weak economy.
Roughly half of all U.S. adults define themselves as “middle class,” with incomes ranging from $39,000 to $118,000 (U.S.)
Three years after the recession technically ended, middle-class Americans are still feeling the economic pinch, with most saying they have been forced to reduce spending in the past year. And fewer now believe that hard work will allow them to get ahead.
“The job market is changing, our living standards are falling in the middle, and middle-income parents are now afraid their children will be worse off than they are,” says Timothy Smeeding, a University of Wisconsin-Madison economics professor who specializes in income inequality.
He said many middle-income families have taken a big hit in the past decade as health-care costs increase, mid-wage jobs disappear due to automation and outsourcing and college tuition mounts.
In the meantime, more-affluent families have fared better in net worth because they are less dependent than lower-income groups on home property values, which remain shrivelled after the housing bust. Wealthier Americans are more likely to be invested in the stock market, which has been quicker to recover from the downturn.
“These are the disaffected middle class who work hard and play by the rules of society, but increasingly see their situation declining by forces beyond their control,” Smeeding said in an interview. “No matter who is president, the climb back up for the middle class and the recovery will be slow and often painful.”
The Pew study is just the latest indicator of a long-term trend of widening U.S. income inequality. The Census Bureau reported last year that income fell for the wealthiest — down 1.2 per cent to $180,810 for the top 5 per cent of households. But the bottom fifth of households — those making $20,000 or less — saw incomes decline 4 per cent.
The new study reviewed 2010 data from the Census Bureau and Federal Reserve, defining “middle class” as the tier of adults whose household income falls between two-thirds and double the national median income, or $39,418 to $118,255 in 2010 for a family of three. By this definition, “middle class” makes up about 51 per cent of U.S. adults, down from 61 per cent in 1971.
In 1970, the share of U.S. income that went to the middle class was 62 per cent, while wealthier Americans received just 29 per cent. But by 2010, the middle class garnered 45 per cent of the nation’s income, tying a low first reached in 2006, compared to 46 per cent for upper-income Americans.
Since 2000, the median income for America’s middle class has fallen from $72,956 to $69,487.
The Pew survey involved telephone interviews with 2,508 adults, including 1,287 people who identified themselves as middle class, conducted from July 16 to 26. The margin of error was 2.8 percentage points for the total sample, 3.9 percentage points for those in the middle class.
Original Article
Source: the star
Author: Hope Yen
The Pew Research Center study says 85 per cent of middle-class Americans feel it is more difficult now than a decade ago to maintain their standard of living. The report describes them as losing faith in the future.
Their share of the national income has been surpassed by affluent earners as median wages stagnate and wealth concentrates at the top in a relatively weak economy.
Roughly half of all U.S. adults define themselves as “middle class,” with incomes ranging from $39,000 to $118,000 (U.S.)
Three years after the recession technically ended, middle-class Americans are still feeling the economic pinch, with most saying they have been forced to reduce spending in the past year. And fewer now believe that hard work will allow them to get ahead.
“The job market is changing, our living standards are falling in the middle, and middle-income parents are now afraid their children will be worse off than they are,” says Timothy Smeeding, a University of Wisconsin-Madison economics professor who specializes in income inequality.
He said many middle-income families have taken a big hit in the past decade as health-care costs increase, mid-wage jobs disappear due to automation and outsourcing and college tuition mounts.
In the meantime, more-affluent families have fared better in net worth because they are less dependent than lower-income groups on home property values, which remain shrivelled after the housing bust. Wealthier Americans are more likely to be invested in the stock market, which has been quicker to recover from the downturn.
“These are the disaffected middle class who work hard and play by the rules of society, but increasingly see their situation declining by forces beyond their control,” Smeeding said in an interview. “No matter who is president, the climb back up for the middle class and the recovery will be slow and often painful.”
The Pew study is just the latest indicator of a long-term trend of widening U.S. income inequality. The Census Bureau reported last year that income fell for the wealthiest — down 1.2 per cent to $180,810 for the top 5 per cent of households. But the bottom fifth of households — those making $20,000 or less — saw incomes decline 4 per cent.
The new study reviewed 2010 data from the Census Bureau and Federal Reserve, defining “middle class” as the tier of adults whose household income falls between two-thirds and double the national median income, or $39,418 to $118,255 in 2010 for a family of three. By this definition, “middle class” makes up about 51 per cent of U.S. adults, down from 61 per cent in 1971.
In 1970, the share of U.S. income that went to the middle class was 62 per cent, while wealthier Americans received just 29 per cent. But by 2010, the middle class garnered 45 per cent of the nation’s income, tying a low first reached in 2006, compared to 46 per cent for upper-income Americans.
Since 2000, the median income for America’s middle class has fallen from $72,956 to $69,487.
The Pew survey involved telephone interviews with 2,508 adults, including 1,287 people who identified themselves as middle class, conducted from July 16 to 26. The margin of error was 2.8 percentage points for the total sample, 3.9 percentage points for those in the middle class.
Original Article
Source: the star
Author: Hope Yen
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