11.29.07

Study Finds Middle Class Hanging “By A Thread”

Posted in Around The Nation, Commentary, Had Enough Yet?, The Economy at 6:01 pm by wcnews

DÄ“mos – A Network for Ideas and Action, released a study titled By A Thread: The New Experience of the Middle Class. Full text here [.PDF].

Here are few excerpts form the introduction:

The middle class is a celebrated example of the nation’s belief in success won from hard work. It defines the American way of life and its existence inspires millions to achieve what those who came before them could not. It is also an integral part of the American economy, providing the skilled workers and purchasing power that position the country as a strong force in the global economy. Yet, the middle class did not just emerge. Rather, it was created through deliberate policy measures and investments as well as a strong demand for U.S. products in the years following World War II.

[...]

Over the last three decades, the structures that provide opportunity have weakened. For many hard-working Americans, they have disappeared altogether. The activist policies of the postwarera that built the middle class have given way to a laissez-faire approach to the economy. Consequently, dramatic, growing gaps between the rich and poor have emerged. Global competition has grown fiercer and the clout of an organized workforce has been diminished.

Thirty years, why does that sure is a coincience. That’s about the time the “conservative” reign of terror war on the middle class has bgan. Here’s how Crooks and Liars summarized it:

For me personally, THESE are the real issues that the presidential candidates need to address, not diamonds or pearls or whether the top 1% should have their tax cuts made permanent. This kind of disparity and insecurity for the vast majority of Americans should be considered an abomination in the last remaining superpower.

The numbers to focus on are below the fold.

Overall Economic Security

* Only 31 percent of middle-income families match our profile for being securely middle class. That is, despite falling into the broad range that defines middle-class “income,” fewer than one in three families has the necessary combination of other factors to ensure middle-class security.
* Our Index results vary by race. Thirty-four percent of white middle-income families are securely in the middle class, as compared to 26 percent of African-American middle-income families and only 18 percent of Latino middle-income families.
* One in four middle-class families matches our profile for being at high risk of slipping out of the middle class altogether.
* One in five (21 percent) white families is at high risk for slipping out of the middle class, as compared to one in three (33 percent) African-American headed households and an alarming two in five (41 percent) Latino families.

Lack of Assets

* More than half of middle-class families have no net financial assets whatsoever-that is, no financial assets or debt levels that exceed their assets.
* Only 13 percent of middle-class families have sufficient assets to meet three-quarters of their essential living expenses for nine months, should their source of income disappear.
* About four out of five middle-class families do not have sufficient assets to cover three quarters of essential living expenses for even three months should their source of income disappear. We defined essential living expenses as food, housing, clothing, transportation, health care, personal care, education, personal insurance and pensions.
* Middle-class families have a median debt of $3,500 and median net assets of $0.

Insufficient Income to Meet Living Expenses, Cover Housing Costs, and Buy Healthcare

* Twenty-one percent of middle-class families have less than $100 per week ($5,000 per year) remaining after meeting essential living expenses. These families are living from paycheck to paycheck with very little margin of security.
* In nearly one out of four middle-class families (23 percent), at least one family member lacks health insurance of any kind.
* Twenty-eight percent of middle-class families spend 30 percent or more of their income on housing expenses, putting them above federal guidelines for housing affordability.

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