Written by Gavin Kakol
A July 2012 poll conducted by the Pew Research Center uncovers the present attitude of the middle class – a socioeconomic group which over the past decade has experienced a contraction of household income, accompanied by a decline of wealth and increased pessimism for their economic condition. As the presidential election draws near, both candidates hope to appeal to the demographic, which overwhelmingly finds the nation’s leadership and big-business culpable for their economic distress.
According to the Pew Research Center, the national median household income based on four person occupancy is $68,274. To be considered middle class an individual’s household income needs to fall between 66.7 and 200 percent of this national median.
Since 1971 the overall share of the middle-class as a population has dropped from 61 to 51 percent. To further segment the class into upper, middle, and lower incomes identifies an increasing divergence from the center. Since 1971 the upper tier’s share has risen from 14 to 20 percent; at the same time the lower tier rose from 25 to 29 percent.
Over the past forty years the upper tier actually increased its household income share from 29 to 46 percent, while the middle tier decreased from 62 to 42 percent. When considering wealth (assets – liabilities) the middle tier lost 28 percent of its median holdings, bringing its product from $129,500 to $93,500.
In addition, the report depicted changes over subgroups (gender, marriage status, ethnicity, nationality, gender, and education level) of the middle class during the past decade by comparing present incomes of their upper tiers to their 2001 lower tier counterpart. The data revealed that certain subgroups, such as senior citizens and married people, actually increased their income levels over the past decade. Only obtaining a high school diploma and never being married were two notable characteristics that correlated with negative income.
The authors of the article suggest that part of the middle and lower tier’s decline may be associated with their dependency on home equity, which has fallen for many Americans since the housing bubble. Between 1983 and 2010, 24 percent of upper income families’ assets resided in home ownership compared to 40 percent for middle income Americans at the same time.
The slow recovery that has followed the “Great Recession” has produced subdued optimism among the middle class. Only 23 percent of middle class Americans polled are confident they will have enough income and assets to last retirement, compared to 32 percent who are not confident. The middle class has lost some assurance in their children’s future economic situation: currently 46 percent believe their children will be better off, compared to 51 percent five years ago.
According to the Pew Research findings, Obama has a slight advantage over Romney with the middle class. When asked which candidate will better help the middle class, 52 percent of the respondents answered Obama, 42 percent answered Romney.
Source:
- The Lost Decade of the Middle Class (Rich Morin, D’Vera Cohn, Pew Research Center, August 22, 2012)
- Graphs are all products of the source article.
