Middle class incomes have been declining for 40 years. The number of people earning middle class incomes has declined, and the total share of aggregate household income earned by the middle class has declined as well. According to the Pew Research Center in 1970, 62% of household aggregate income was earned by the middle class. In 2010, this had fallen to 45%. In the same period time, the share of the aggregate income earned by the upper class increased from 29% to 46%. The aggregate share of income for the lower class fell from 10% to 9%. In 1971, 61% percent American adults earned middle class incomes and by 2011, that had fallen to 51%.
The great recession has added injury to, well, injury by causing a decline not only in the earning of the middle class, but by draining their accumulated earnings. In 2007, the median net worth of middle class families was $152,950; by 2010, it had fallen to $93,150. These numbers are again from the Pew Research Center. This means that, largely due to the housing crisis, a typical middle class family in America lost 39% of their median net worth in the course of four years.
To make matters worse for the middle class, the hope for a secure retirement has vanished. Traditional pensions have disappeared, and recent studies show the 401k’s that replaced them have left more than half of Americans without enough money to retire. Combine this with America’s highest in the world health care costs and you get a picture of a very insecure middle class. People who work hard and spend wisely cannot even rely on a place to live anymore with the average cost of homes increasing from $93,400 in 1980 to $119, 600. (In 2000 Dollars, Census) Even when people could afford to buy homes at the increased prices, they found themselves underwater when prices fell.
According to the Pew Research Center, those with only a high school diploma have fallen out of middle class earnings faster than any other group in the period between 2001-2011 with 4.6% of those with only high school diplomas falling into the lower class. This means that to remain economically in the middle class increasingly means going to college. The problem with this is that at the most affordable of universities, public universities, have seen their tuition rates rise from an average (in 2010 dollars) of $2119 in 1980-81 to $7,605 in 2010-2011. This means for the average American the cost of remaining middle class has more than tripled. Combined with the declining middle class incomes this means that the increased tuition cost has come in the form of more debt that the graduate are less capable of paying off with their decreasing earnings.
http://www.pewsocialtrends.org/2012/08/22/the-lost-decade-of-the-middle-class/
http://www.pewsocialtrends.org/2011/05/15/is-college-worth-it/
