WASHINGTON -- A recent Pew Research Center report on the attitudes and lives of the middle class offers a bleak prospect for prosperity held by many Americans.
The report, combining a public opinion survey by Pew with an analysis of relevant economic and demographic trend data from the Census Bureau, found fewer Americans now than at any time in the past half-century believe they're moving forward in life. "Americans feel stuck in their tracks. A majority of survey respondents say that in the past five years, they either haven't moved forward in life (25%) or have fallen backwards (31%). This is the most downbeat short-term assessment of personal progress in nearly half a century of polling by the Pew Research Center and the Gallup organization," Pew found.
As of 2006, the last year for which trend data are available, real median annual household income had not yet returned to its 1999 peak, making this decade one of the longest downturns ever for this widely accepted measure of the middle-class standard of living. Over a longer time period, however, the picture is much brighter; since 1970, median household income has risen by 41%.
For the past two decades middle-income Americans have been spending more and borrowing more, with housing the key driver of both trends. At a time when these borrow and spend habits have spread, Americans said it has become harder to sustain a middle-class lifestyle. About half of all Americans think of themselves as middle class.
Nearly eight out of ten (79%) respondents in the Pew Research Center survey said it is more difficult now than five years ago for people in the middle class to maintain their standard of living. Back in 1986, just 65% of the public felt this way. The current economic slowdown and uptick in prices are taking a bite out of the family budget. Slightly more than half of middle-class respondents say they've had to tighten their belts in the past year.
The Pew survey reveals the glass half-full, glass half-empty feeling middle-class workers have arrived at following the buffeting in financial markets, the mortgage meltdown, the credit crunch and depressed confidence levels. Half of those surveyed said they would be forced to cut spending in order to get by. One in four (25%) who are currently employed are afraid of losing their jobs or fearful it would be outsourced by company cutbacks. More than a quarter (26%) think they may face a salary cut or cuts in employer health benefits.
While most Americans do not respond well to any form of economic class warfare, they have become increasingly aware of a growing income gap as mainstream newspapers address the issue more in economically troubled times. Census figures bear out the higher prosperity levels of wealthier Americans compared to middle class earners--from 1983 to 2004 median net worth of households with annual incomes above 150% of the median grew by 123%, while the median net worth of middle-income families rose by just 29%.
Assigning blame is also mixed, with 26% saying the government deserves fault, 15% blame the high cost of oil, and 11% were even willing to place the blame on themselves.
Economic, demographic, technological and sociological changes since 1970 have moved some groups up the income ladder and pushed others down. Relative winners include seniors (ages 65 and older), blacks, native-born Hispanics and married adults. The income status of all of these groups improved from 1970 to 2006. Losers include young adults (ages 18 to 29), the unmarried, foreign-born Hispanics and people with a high school education or less. All of these groups have seen their relative income positions decline.
Most middle-class adults agree with the old saw that the Republican Party favors the rich while the Democratic Party favors the middle class and the poor. Nearly six-in-ten (58%) middle-class survey respondents said the Republican Party favors the rich, while nearly two-thirds said the Democratic Party favors the middle class (39%) or the poor (26%).