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Lost decade for the middle class

Net worth has plunged since 2000, with the U.S. median declining by 28%, erasing two decades of gains

By MSN Money Partner Aug 31, 2012 5:59PM

This post comes from Judy Martel at partner site Bankrate.com.

 

Bankrate.com on MSN MoneyDoes it feel like you've been standing still financially for a decade? Or, worse, have you lost ground? If it's any comfort, you've got plenty of company. The Pew Research Center has identified the past 10 years as a lost decade for the middle class.

 

In a survey, 85% of middle-class respondents say it is more difficult now to maintain a standard of living than it was a decade ago. Since 2000, adults in this group have lost earning power and wealth, as well as faith in the future, perhaps the saddest aspect of the Pew study. (Post continues below video.)

The survey defined the middle class as adults with annual household incomes from two-thirds to double the national median -- a range of $39,418 to $118,255 for a family of three.

 

Mean family incomes have declined overall for the first time since the end of World War II. Since 2000, the median income for America's middle class has fallen from $72,956 to $69,487. Net worth plunged during that time, with the median declining by 28%, erasing two decades of gains.

 

Image: Woman holding empty purse (© image100/Corbis)The middle class has also been shrinking in number for the past four decades. In 2011, 51% of adults made up the middle class, down from 61% in 1971. The good news is that as the middle class gets smaller, slightly more of its former members are moving up than down. Those who moved into the upper class found themselves in a tier that increased its share of the nation's total income, from 29% in 1970 to 46% in 2010. The lower tier dropped from 10% to 9% of the nation's income, and the middle class from 62% to 45%.

President Barack Obama and Republican presidential candidate Mitt Romney are both making the erosion of the middle class a central campaign theme. Look for health care costs, taxes, job growth, Social Security and recovering housing values to be hotly debated over the next two months.

 

Would you define yourself as middle class? Do you feel as though, financially, you've lost a decade?

 

More from Bankrate.com and MSN Money:

7Comments
Sep 2, 2012 8:31PM
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Even though the USPS "told" me I was making $51K a year, I only saw about $35 before taxes. I thought I was in tall cotton, but chose to quit & move out of state.

I've worked other jobs since, and had been able to amass $300+K due to frugal living. So now it seems I've never been 'middle class', despite my thinking.

Now, through good investments and frugal living I've got an income that I can't ever spend. 

I've never spent over my income, never sought to 'keep up' and don't give a crap what others think.

OK, I'm old, but even today I can't imagine the $$$ that "professional" say it takes to raise a kid. Is that why everyone is so skittish? Don't those pros know that most Moms use yard sales to cloth the kids? Toy the kids? Nobody in the know buys "new" anymore. The commercials they let the kids watch are the impetus.

What really pisses me off is the folks that let the kids do electronic games at will.

These kids don't have a clue how to interact with "real" people. They keep on playing their games, that is sooooo sad.









Sep 2, 2012 11:14AM
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This past decade we have kept nose to the grindstone, lived below our financial means. We have made a lot of progress on less money. We prioritized. We all want more but we have plenty.
Sep 3, 2012 8:09AM
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It's no wonder. Everytime the Federal Reserve lowered interest rates, they punished thrift, and rewarded profligacy. This wth no complaints from the middleclass. Being middleclass requires you to adopt a set of values. Paramount of these values is giving up immediate pleasure in favor of long term gain. Lose the values, lose the standard of living
Sep 4, 2012 11:13AM
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Debt, been there, done that and never want to go back.  It wasn't easy, we make less than we did 10 years ago but we now have more money.  Go figure.  John F. Kennedy once said, "We are not going to the moon because it is easy, we are going because it is hard".  Once you are debt free , the feeling  is like landing on the moon.  I never want to be a debt slave ever again.  By the way, how much debt does China have? 
Sep 4, 2012 5:51PM
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I don't care about any of this.  I want the new iPhone. ;-)
Sep 1, 2012 3:09PM
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Yep, the past decade has practically wiped out the savings of many middle class people. Most of it  happened with the collapse of the financial industry in 2008 during the Bush admininstation.






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