WASHINGTON (AP) — The middle class is receiving less of America’s total
income, declining to its smallest share in decades as median wages stagnate
in the economic doldrums and wealth concentrates at the top.
A study released Wednesday by the Pew Research Center highlights diminished
hopes, too, for the roughly 50 percent of adults defined as middle class,
with household incomes ranging from $39,000 to $118,000. The report
describes this mid-tier group as suffering its “worst decade in modern
history,” having fallen backward in income for the first time since the end
of World War II.
Three years after the recession technically ended, middle class Americans
are still feeling the economic pinch, with most saying they have been forced
to reduce spending in the past year. And fewer now believe that hard work
will allow them to get ahead in life. Families are now more likely to say
their children’s economic future will be the same or worse than their own.
In all, 85 percent of middle class Americans say it is more difficult now
than a decade ago to maintain their standard of living. Some 62 percent say
a lot of the blame lies with Congress. A slight majority say a lot lies with
banks and other financial institutions. Just 8 percent blame the middle
“The job market is changing, our living standards are falling in the middle,
and middle-income parents are now afraid that their children will be worse
off than they are,” says Timothy Smeeding, a University of Wisconsin-Madison
economics professor who specializes in income inequality.
He said that many middle-income families have taken a big hit in the past
decade as health care costs increase, mid-wage jobs disappear due to
automation and outsourcing and college tuition mounts for those seeking to
build credentials to get better work. In the meantime, more-affluent
families have fared better in net worth because they are less dependent than
lower-income groups on home property values, which remain shriveled after
the housing bust. Wealthier Americans are more likely to be invested in the
stock market, which as a whole has been quicker to recover from the
“These are the disaffected middle class who work hard and play by the rules
of society, but increasingly see their situation declining by forces beyond
their control,” Smeeding said in an interview. “No matter who is president,
the climb back up for the middle class and the recovery will be slow and
The Pew study is just the latest indicator of a long-term trend of widening
U.S. income inequality. The Census Bureau reported last year that income
fell for the wealthiest — down 1.2 percent to $180,810 for the top 5 percent
of households. But the bottom fifth of households — those making $20,000 or
less — saw incomes decline 4 percent.
The new study reviewed 2010 data from the Census Bureau and Federal Reserve,
defining “middle class” as the tier of adults whose household income falls
between two-thirds and double the national median income, or $39,418 to
$118,255 in 2010 for a family of three. By this definition, “middle class”
makes up about 51 percent of U.S. adults, down from 61 percent in 1971.
In 1970, the share of U.S. income that went to the middle class was 62
percent, while wealthier Americans received just 29 percent. But by 2010,
the middle class garnered 45 percent of the nation’s income, tying a low
first reached in 2006, compared to 46 percent for upper-income Americans.
Since 2000, the median income for America’s middle class has fallen from
$72,956 to $69,487.
“The notion that the middle class always enjoys a rising standard of living
is a big part of America’s sense of itself. And in modern times, it’s always
been true — until now,” said Paul Taylor, executive vice president of the
Pew Research Center.
“Middle class Americans still have faith in the future — their own, their
children’s, the country’s. But their outlook is not as rosy now as it was
before the recession began,” he added.
Among the findings:
—Who’s to blame: Of the self-described middle-class Americans who say it is
more difficult now than it was a decade ago to maintain a standard of
living, 62 percent say “a lot” of the blame lies with Congress. About 54
percent say the same about banks and financial institutions, while 47
percent say large corporations, 44 percent point to the Bush administration,
39 percent cite foreign competition and 34 percent find fault with the Obama
administration. About 8 percent say the middle class itself deserves a lot
of the blame.
—Feeling pinched: About 62 percent of middle-class Americans say they were
forced to reduce household spending in the past year, compared to 53 percent
who said so in 2008. Separately, roughly 42 percent of middle-class adults
say their household’s financial situation is worse now than before the
recession began, compared to 32 percent who reported they are now better off
and 23 percent who said their finances are unchanged. Of those who said they
were worse off now, about 51 percent said it will take at least five years
to recover, including 8 percent who said they will never recover.
—Diminished hopes: About 63 percent of the general public — including 67
percent of the middle class — agree that most people who want to get ahead
can make it if they’re willing to work hard, down from 74 percent of the
public who believed so in 1999. As for their children’s future, 43 percent
in the middle class say their children’s standard of living will be better
than their own, compared to 47 percent who say it will be worse (26 percent)
or the same (21 percent). In 2008, 51 percent said their children’s future
would be better, compared to 19 percent who said worse and 21 percent who
said it would be the same.
—Picking a president: About 52 percent of self-described middle-class adults
say President Barack Obama’s policies in a second term would help the middle
class, while 39 percent say they would not help. In contrast, about 42
percent say that electing Republican challenger Mitt Romney would help the
middle class, while 40 percent said it would not help. People who identify
as middle class are more likely to lean Democratic (50 percent) than
Republican (39 percent).
—Declining wealth: Median net worth for the middle class fell 28 percent
over the last decade, from $129,000 in 2001 to $93,000, wiping out two
decades of gains. Among upper-income families, net worth edged higher from
$569,000 to $574,000. Lower-income families saw net worth fall 45 percent to
The Pew survey involved telephone interviews with 2,508 adults, including
1,287 people who identified themselves as middle class, conducted from July
16 to 26. The margin of error was 2.8 percentage points for the total
sample, 3.9 percentage points for those in the middle class.