Tags: Barack Obama | SOTU 2015 | middle class | income | households | money

Middle Class Shrinks as Households Earn Less

By    |   Monday, 26 January 2015 03:15 PM

The once-thriving middle class has been disappearing since the late 1960s, but since 2000, it's because its incomes are steadily dropping off, not going up.

During the late 1960s, The New York Times reports, more than half of the country's households were considered as being in the middle class and earning what would equal $35,000 to $100,000 a year into today's dollars.

The group's size began to fall when Americans started earning more money, putting them in upper income brackets, but since 2000, more left the middle class after falling to bottom income levels.

Further, as Americans aged, there were fewer middle-class families that met the traditional image, that of a married couple with children at home, and instead, it became the elderly who were considered in the middle class income bracket.

President Barack Obama, in his State of the Union address last week, focused on ideas for reviving the middle class, with ideas such as paying for community college, providing affordable childcare, incentives for buying a home, and more.

His plans are drawing opposition from Republicans, who are creating their own plans to help the middle class and counter Obama's proposals to tax the wealthy to aid struggling Americans.

The economy is back on solid footing due to a soaring stock market, a falling jobless rate and declining gas prices, so GOP leaders are turning to the populist theme of income inequality while pushing bills to counter Obama’s plan to raise $320 billion from the rich.

Meanwhile, middle class earnings are defined as starting at $35,000, or about 50 percent higher than the official party level for a family of four, and ends at the $100,000 mark.

"I would consider middle class to be people who can live comfortably on what they earn, can pay their bills, can set aside something to save for retirement and for kids in college and can have vacations and entertainment," Christine L. Owens, executive director of the National Employment Law Project, a left-leaning research and advocacy group, told the Times.

But as the middle class gets older, it does have better retirement benefits than generations in the past, and many work past traditional retirement age, bringing an income that has jumped 14 percent since the turn of the century, compared to the average median household income that has fallen by 9 percent.

Further, Social Security and Medicare have helped provide a cushion for many seniors, boosting incomes even more.

In addition, the numbers of married couples with children has been dropping, reports the Times. More than 60 percent of middle class households had the traditional family arrangement, but now, married couples with children make up just a quarter of households.

But as more women joined the workforce, families with children went up the economic ladder, with 42 percent of families earning more than $100,000 in today's money. During the recession, though, many such middle-income jobs were lost, but low-paying jobs were gained, said Michael Strain, resident scholar at the right-leaning American Enterprise Institute.

There are some new jobs being created as the economy improves, however, including in professional services, healthcare and manufacturing, giving the middle class signs of hope.

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The once-thriving middle class has been disappearing since the late 1960s, but since 2000, it's because its incomes are steadily dropping off, not going up.
middle class, income, households, money
Monday, 26 January 2015 03:15 PM
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