Do Not Pass Go!

Middle class squeeze is tightening and Americans feel trapped.

Fewer Americans than ever feel as if they are making progress, says the latest Pew Social and Demographic Trends Report. With America’s middle class making little economic progress, many feel “stuck in their tracks” says the report, and many feel dissatisfied in terms of financial success, standard of living and personal progress.

The survey also measured participants’ political attitudes. Well over half of respondents (58 percent) stated that the Republican Party favors the rich, while roughly two-thirds say the Democratic Party backs the middle class (39 percent) or the poor (26 percent). A vast majority (79 percent) also state that it is “more difficult now than five years ago” to maintain a middle class standard of living.

“The pessimism expressed in the Pew survey is not surprising, given trends in income distribution and inequality in the US,” Jeanne Hurlbert PhD, professor of sociology at Louisiana State University (LSU). Hurlbert, along with husband Dr. John Beggs, owns and manages optinetresources.com, a company that conducts demographic and survey analysis and helps business people build social networks.

“Inequality has risen sharply, causing many commentators (including the head of the San Francisco Federal Reserve board, in 2006) to express concerns about the effects of that inequality on our political system,” Hurlbert adds.

One-quarter of the Pew Survey respondents stated that they have not “moved forward” in their lives, while nearly an additional third (31 percent) said that they have actually “fallen backward.” Hurlbert says the numbers are consistent with Americans’ recent experiences. “The fact that a majority of survey respondents indicated that they have not moved forward (or have fallen backward) in the last five years almost certainly reflects these trends, as well as more recent pressures created by rising gasoline prices and the mortgage crisis,” she says

Curiously, more than half of the respondents classified themselves as “middle class” (53 percent) including four-in-ten who earn household incomes of under $20,000 a year, and one-third who earn over $150,000 annually. “That fact is not surprising,” Hurlbert notes. “In the US, self-identification measures of this type generally do a poor job of measuring middle-class status, because of the relatively low level of class consciousness among Americans.”

“However, more objective measures show that, during recent decades, economic gains have tended to benefit higher-income more than middle-income households. Wealth is more concentrated than income in the United States; as the Pew Report’s authors note, the net worth of upper-income families has increased at a far faster rate than that of middle-income families, during the past two decades,” Hurlbert says.

Pew reports that from 1983 to 2004, the median net worth of upper income families grew  by 123 percent, while that of middle income families increased by only 29 percent. Upper income household also outperformed middle income households in terms of accumulated wealth, Pew says. The upper income tier is defined as households making about 150 percent of the median, and middle income is defined as those making between 75 percent and 150 percent of the median.

Employment opportunities have also changed. “We also have to recognize that the service economy tends to produce proportionally fewer middle-range jobs than one dominated by manufacturing. Given that the service sector is now the dominant economic sector, that produces effects for middle-income workers.”

While the survey found that many Americans remain optimistic about the future, with most stating that they expect their quality of life to be better five years from now, and expecting their children to do better than they have, Hurlbert points out that things will have to change first.

“Faced with the effects of globalization, economic restructuring, and outsourcing, Americans may well be responding pessimistically about their ability to move forward,” says the professor. “As long as these trends and increasing income inequality persist, I do not expect to see these attitudes changing.”