A significant share of the middle class say it will be a long time before they recover from the severe shocks of the past 10 years, dubbed "The Lost Decade" in a Pew Research Center report released Wednesday.
"There's not a lot of good news for the middle class," Rich Morin, senior editor at the Pew Research Center and a co-author of the report, told The Huffington Post. "The middle class has shrunk in size, it's declined in income and in wealth, and has lost a little bit of that characteristic faith in the future that defines Americans broadly, but particularly the middle class."
The report suggests that five years after the financial collapse, middle-class Americans have yet to fully recover, and many think it will be years before they do. Of those middle-class households who said they're worse off since the recession, 51 percent said they won't recover for at least five years and 8 percent said they never will. And 85 percent of people who described themselves as middle class said it's harder to maintain a middle-class standard of living now than it was a decade ago.
The consequences of a disappearing middle class could be dire. Morin noted that political scientists speculate a functioning middle class could be key to a functioning democracy.
"If you lose the middle class, you're in danger of losing a lot," he said.
As middle-class households -- which the report defines as those making between two-thirds and twice the national median income -- feel they're struggling to make ends meet, their wealthier neighbors are making gains.
Over the past four decades, upper-income Americans have increased their share of overall U.S. household income, from 29 percent in 1971 to 46 percent in 2010, according to the report. During the same period, the middle-class share of income dropped from 62 percent to 45 percent.
Unless steps are taken to reverse this trend, Morin predicted, America will see "the rich getting richer and more numerous as the poor grow poorer and more numerous and the size of the middle class dwindling."
In addition to losing a major share of America's income, the middle class saw its wealth wiped out over the last decade. A volatile stock market and a major housing bust pummeled middle-class assets, decreasing their net worth by almost 30 percent and "erasing two decades of growth," according to the report.
"The fact that for the first time since the end of World War II incomes have declined, that's amazing,” Morin said. "We've obviously had recessions in the past -- we've had two in the past 10 years -- but there's always been a bounce back."
Within the middle class, some lost more than others. Yet one of the more surprising findings of the report, said Morin, is that minorities and young people -- two of the groups that were hit hardest -- are actually the most optimistic.
Seventy-eight percent of blacks and 67 percent of Hispanics said they're optimistic about the country's future, compared to 48 percent of whites. Sixty-seven percent of 18- to 24-year-olds said the same thing, while only 52 percent of those 50 and over -- a group who emerged as one of the biggest winners of the past decade -- said they're upbeat about the country's future.
Minorities and young people, "according to the economic data, were disproportionately negatively affected by change in the past decade," Morin said. "But they remain as a group less likely to say that it's harder to maintain a middle-class lifestyle, they're less likely to say it's harder to get ahead, and they tend to be a little bit more financially secure now than 10 years ago."
Original Article
Source: huffington post
Author: Jillian Berman
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