Thursday, August 23, 2012

A Leaner, Meaner Middle Class

The Lost Decade of the Middle Class

Fewer, Poorer, Gloomier
August 22, 2012

As the 2012 presidential candidates prepare their closing arguments to America's middle class, they are courting a group that has endured a lost decade for economic well-being. Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some -- but by no means all -- of its characteristic faith in the future, according to a new Pew Research survey and analysis of data from U.S. Census Bureau and Federal Reserve Board of Governors.

Fully 85% of Americans who describe themselves as middle class say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. This downbeat take comes at the end of a decade in which mean family incomes declined for Americans overall for the first time since the end of World War II. But the middle-income tier - defined as all adults with annual household incomes that are two-thirds to double the national median -- is the only one that also shrunk in size, a trend that has continued for four decades.

In 2011, the middle-income tier included 51% of all adults, down from 61% in 1971. This has been accompanied by a dispersion of the population into the economic tiers both above and below, with slightly more moving into the upper tier. But only the upper tier has increased its share of the nation's total household income. In 2010, the upper tier took in 46% of the nation's household income, up from 29% in 1970. The middle tier took in 45%, down from 62%. The lower tier dropped to 9% from 10%.

Appeals to the beleaguered middle class have been at the heart of the 2012 presidential campaign. The new Pew Research survey, conducted from July 16 to July 26, finds that neither candidate has closed the deal with this group, but that President Obama is in somewhat better shape than his Republican challenger, Mitt Romney.

The survey also finds that the middle class blames Congress more than any of the institutions or entities tested in this survey for its hard economic times in the last decade.

These are among the principal findings from the Pew Research analysis of U.S. Census Bureau and Federal Reserve Bank trend data, as well as a new nationwide Pew Research survey of more than 2,500 adults, including 1,287 who describe themselves as middle class.

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