Center for American Progress: America's Middle Class Still Losing Ground

[marmar]

America's Middle Class Still Losing Ground

Middle class economic security is taking an ever harder hit as economic conditions worsen.

By Christian E. Weller, Amanda Logan | July 30, 2008

Watch Christian E. Weller talk about the report: http://www.americanprogress.org/issues/2008/07/middle_class_squeeze.html


America’s middle-class families are still struggling. With the current economic downturn, economists, policymakers, and pundits alike now recognize what many middle-class families have long been feeling: that their financial security is in decline. Although economists so far have not officially announced the beginning of a recession this year, the sharp downturn in economic growth certainly has made things worse for families who have been struggling for years with massive amounts of debt, declining incomes, and rising prices.

For the past two years, the Center for American Progress has calculated a number of middle-class financial security indicators to measure how many families have the financial resources for a spell of unemployment, for a medical emergency, for both, or for an unspecified economic emergency equal to three months of their income. Our figures demonstrate the financial and economic roller coaster ride that America’s middle class has been on.

The trends since 1989, the first year for which we have data, showed an increase in middle-class security through the 1990s. After 2000, however, the situation deteriorated very quickly—all of the gains in middle-class economic security were erased within a few years. We have now updated the figures to reflect the trends for 2006 and 2007 and to include more accurate data for 2005 than we had before. All the measures we tracked either decreased further or stayed at their already low levels from 2005 (See chart on page two). Data to 2008 is not available, but there can be no doubt that with worsening economic conditions middle class economic security is taking an ever harder hit. The new data underscore that:

* The sharpest deterioration in middle-class financial security is associated ƒ with the cost of a medical emergency. We estimate that only 33.9 percent of families had enough wealth in 2007 to cover the cost of a medical emergency, down from 35.0 percent in 2005 and 43.7 percent in 2000 (See table on page 3). This deterioration comes as a result of less wealth and higher costs of medical emergencies.

* Drops in personal wealth have contributed to the decline in middle-class ƒ financial security. Because house prices started to fall and debt continued to rise in 2007, we also observed the share of families who could weather an unspecified emergency equal to three months of income decrease to 29.4 percent in 2007, from 30.5 percent in 2005 and 39.4 percent in 2000.

* The share of families who had ƒ enough resources to cover a spell of unemployment has declined since 2000. In 2007, 44.1 percent of families had enough wealth to cover a spell of unemployment, little changed from 44.0 percent in 2005 but still down from 51.0 percent in 2000. Unfortunately, the 2007 data likely reflect only a temporary respite from decline since the labor market has substantially deteriorated in 2008, beyond the time series data presented here. ......(more)

The complete piece is at: http://www.americanprogress.org/issues/2008/07/middle_class_squeeze.html

[Merlot]

1. "2000, however, the situation deteriorated very quickly"

hmmmm, what was it that happened in 2000 that caused this deterioration? hmmm, anyone have a clue?


"...all of the gains in middle-class economic security were erased within a few years."

[blindpig]

2. So what? Welcome to the club.

The working class and the poor have been taking a beating for 35 years. Ya'll just noticed?

Just who is this mythical middle class anyway?