Does it feel like you've been financially standing still for a decade, or worse, have you lost ground? If it's any comfort, you've got lots of company. The Pew Research Center has identified the past 10 years as a lost decade for the middle class.
In a survey, 85 percent of the middle class 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.
The middle class is defined as adults with annual household incomes 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. But net worth plunged during that time, with the median declining by 28 percent, erasing two decades of gains.
The middle class has also been shrinking in number for the past four decades. In 2011, 51 percent of adults made up the middle class, down from 61 percent in 1971. The good news is that as the middle class gets smaller, slightly more are moving into the upper class than into the lower. Those who moved up found themselves in a tier that increased its share of the nation's total income, from 29 percent in 1970 to 46 percent in 2010. The lower tier dropped from 10 percent to 9 percent of the nation's income, and the middle class from 62 percent to 45 percent.
President Barack Obama and presidential Republican candidate Mitt Romney are 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 and do you feel as though, financially, you've lost a decade?
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