The vanishing middle class
MORE PEOPLE are acknowledging their downward slide away from dreams of prosperity
Asense of belonging to the middle class occupies a cherished place in America. It conjures images of self-sufficient people with stable jobs and pleasant homes working toward prosperity.
Yet nearly five years after the Great Recession ended, more people are coming to the painful realization that they’re no longer part of it.
They are former professionals now stocking shelves at grocery stores, retirees struggling with rising costs and people working parttime jobs but desperate for full-time pay. Such setbacks have emerged in economic statistics for several years. Now they’re affecting how Americans think of themselves.
Since 2008, the number of people who call themselves middle class has fallen by nearly a fifth, according to a survey in January by the Pew Research Center, from 53 per cent to 44 per cent. Forty per cent now identify as either lower-middle or lower class compared with just 25 per cent in February 2008.
According to Gallup, the percentage of Americans who say they’re middle or upper-middle class fell eight points between 2008 and 2012, to 55 per cent.
And the most recent National Opinion Research Center’s General Social Survey found that the vast proportion of Americans who call themselves middle or working class, though still high at 88 per cent, is the lowest in the survey’s 40-year history. It’s fallen four percentage points since the recession began in 2007.
Whether or not people see them- selves as middle class, there’s no agreed-upon definition of the term. In part, it’s a state of mind. Incomes or lifestyles that feel middle class in Kansas can feel far different in Connecticut.
In any case, individuals and families who feel they’ve slipped from the middle class are likely to spend and borrow less. Such a pullback, in turn, squeezes the economy, which is fuelled mainly by consumer spending.
“How they think is reflected in how they act,” said Richard Morin, a senior editor at the Pew Research Center.
The Pew survey didn’t ask respondents to specify their income. Still, Pew has found in the past that people who call themselves middle class generally fit the broad definitions that economists use.
Roughly 8.4 per cent of respondents to the National Opinion Research Center’s survey, last conducted in 2012, said they consider themselves lower class. That’s the survey’s highest percentage ever, up from 5.4 per cent in 2006. NORC is a social science research organization at the University of Chicago.
Tom Smith, director of the NORC, said even slight shifts are significant. Class self-identification “is traditionally one of the most stable measures” in the survey, he said.
By contrast to the most recent recession, the severe 1981-82 downturn had little effect on class selfidentification in Smith’s survey.
Why do so many no longer regard themselves as middle class? A key reason is that the recession eliminated 8.7 million jobs.
Home ownership is among factors economists cite as markers of middle-class status. Others include being able to vacation, help children pay for college and save for a secure retirement.
Yet stagnant middle-class pay, combined with steep price increases for college, health care and homes, have made those expenses harder to afford.