Tags: Middle | class | decline | govt

U.S. News: Middle-Class Decline Saps the Future

By John Morgan   |   Thursday, 18 Oct 2012 08:10 AM

The decline of the middle class is fundamentally reshaping the U.S. economy, with unwanted repercussions for higher education, government and the future, according to an analysis by U.S. News & World Report.

Even the middle class’s health has suffered, U.S. News said.

“Their economic future isn’t very bright,” said Timothy Smeeding, director of a poverty research center at the University of Wisconsin-Madison. “Wages and income are flat. Transportation, childcare costs and healthcare costs are going up, and your income isn’t.”

Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video

The definition of “middle class” varies. The New York Times reported that the Tax Policy Center placed the median household income at $42,000 in 2011, while the Census Bureau tagged it at $50,000.

“These people live on earnings,” Smeeding said. “They’re working on not great wages and their jobs are threatened. They don’t see any hope in the future of things getting better.”

A recent survey of self-described middle-class adults by the Pew Research Center found 85 percent of them believed it was more difficult now than a decade ago to maintain their standard of living. Most of them (62 percent) said “a lot” of the blame lies with Congress, while 54 percent said banks and financial institutions were to blame, 47 percent blamed large corporations and 34 percent blamed the Obama administration.

The middle class shrank from 61 percent of the population in 1971 to 51 percent by 2011, the Pew report said. U.S. News said the income declines have led to higher levels of household debt from expenditures such as college.

U.S. News said more middle-income families are turning to government programs to make ends meet. It cited a recent Senate Budget Committee report that said Medicaid has grown from 34 million people in 2000 to 54 million in 2011, and the number of food stamp recipients increased from 17 million to 45 million people during the same period.

David Madland, director of the American Worker Project at the Center for American Progress, suggested increasing the minimum wage and improving entitlement programs such as Social Security as keys to rebuilding the middle class.

But Smeeding said there is a necessary prerequisite before such policy changes could occur.

“We have to get the economy growing again,” he said.

Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video

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The decline of the middle class is fundamentally reshaping the U.S. economy, with unwanted repercussions for higher education, government and the future, according to an analysis by U.S. News & World Report.
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