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
Does 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.
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?
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