Middle class is becoming endangered

Think it’s hard to break into the middle class once you’ve graduated from college, or maintain a middle-class lifestyle if you’ve already acquired one? You’re not imagining it.

A study recently published by the Pew Charitable Trust’s Stateline blog found that the percentage of those considered part of the middle class has shrunk in all 50 states since 2000.

The reasons for this ongoing disappearance of the middle class are manifold.

One reason is the extremely slow growth in wages for most Americans. In the past roughly 35 years, the middle class has seen its wages go up very little, and certainly not enough to keep up with higher housing, child care, medical care and insurance costs.

Certainly, housing is one of biggest culprits. Since the U.S. housing bubble burst in the mid to late 2000s, the price of housing has come roaring back, making affording a home difficult, if not impossible, for first time homebuyers. Additionally, these rising costs, along with the aforementioned stagnant incomes, have made many homeowners blanch at “buying up,” reducing the supply of affordable first-time homes and causing a sort of negative Catch-22 in the housing market.

One other major culprit is the skyrocketing cost of a college education. According to the College Board, the annual cost of private universities is $31,000–$46,000, while the average annual cost of state universities is $9,000–$24,000. The result? More students come out of college with high student loan balances they can’t afford. So, even if they get a good-paying job, they have to put off buying high-price items, thus delaying their “move” into a middle-class lifestyle.

To make matters worse, many parents, who aren’t saving enough for retirement in the first place, are forced to pay for their child’s college education with their income, or mortgage their future by taking money from their retirement plans or taking second mortgages on their homes. Some are also putting themselves in danger by co-signing on their child’s loans.

And, many people now must put off retirement, which means there are fewer good jobs for those of their children’s generation, causing another negative Catch-22 that forces younger adults to further delay moving up the financial ladder into the middle class.

So, as Wall Street continues to recover well from the Great Recession, Main Street and the middle class — which is the backbone of the U.S. economy — continues to struggle. And, neither Democrats nor Republicans have been able to do a thing about it. The problem of more Americans finding it harder to stay in the middle class, and the growing number of young adults finding it harder, if not impossible, to join it, is not going away.