By the Numbers: The Incredibly Shrinking American Middle Class
Published September 21, 2013
by Karin Kamp, Moyers and Company, September 20, 2013.
A typical American household made about $51,017 in 2012, according to new figures out from the Census Bureau this week. That number may sound familiar to anyone who remembers George H. W. Bush’s first year as president or Michael Jackson in his prime. That’s because household income in 2012 is similar to what it was in 1989 (but back then it was actually higher: you had an extra $600 or so to spend compared to today).
That sobering statistic gives an indication of where the American middle class appears to be headed. Take a look below at a snapshot of where the middle class is now, the problems they face and what our Facebook audience has to say about squeaking out a living these days.
A note on the term “middle class”: There is no single, universal definition so we turned to economic analyst Robert Reich – who spoke to us this week – for some direction. Reich suggested defining middle class as those with income levels 50 percent above and below the median income. Median is a term that means the “middle of the middle.” Median earnings are a key indicator of how the middle class is doing.
A Snapshot
The income range to be considered middle class:$25,500 – $76,500
The median middle class household income in 2012: $51,017?and in 1989: $51,681
Year inflation-adjusted median household income peaked at $56,080: 1999
Income needed in a two parent, two child home in St. Louis for an adequate living standard: $64,673?and in New York City: $94,676
The Problem
Share of self-described middle-class adults who say it’s more difficult now than a decade ago for middle-class people to maintain their standard of living: 85
Percentage of Americans that consider themselves to be “lower class” (the highest percentage ever): 8.4
Percentage increase in salary growth for the median worker from 1979 to 2012: 5
Percentage drop in average real income per family since 2007: 8.3
The median net worth of a family in 2010: $77,300?and in 2007: $126,400
Percentage of Americans that are unemployed/underemployed rate: 14
Number of states in which poverty rates rose between 2007 and 2010: 46
Approximate poverty rate from 2009 to 2012: 15
The last time it remained at or above 15 percent for three years running: 1965
The Work
Average number of hours U.S. workers put in annually: 1,790?what the Norwegians work: 1,420?and the French: 1,479
Percent increase in productivity from 1979 to 2012: 75
What the median middle-class income ($51,017) would be if wages grew at the same rate: $77,131?(Check out this handy tool from EPI to see what your income would be if it had kept up with productivity.)
Number of guaranteed days of paid vacation given to U.S. workers: 0
Number of vacation days U.S. workers are entitled to, but don’t take, in a typical year: 175 million
Number of paid maternity days in Germany: 98 (100% pay)?Number of paid maternity days in France: 112 (100% pay)?Number of paid maternity days in U.S.: 0
Number of industrialized countries that do not mandate paid maternity leave: 1?(yes, the U.S. is the only one that does not require paid leave.)
The Costs
Average out-of-pocket health care expenses per household in 2012: $3,600?and in 2011: $3,280?and in 2005: $2,035
Average amount needed to send a child to an in-state college for the 2012-13 academic year: $22,261?and for a private college: $43,289
Percentage of Americans near retirement with less than $30,000 in their retirement accounts: 75
Percentage increase in housing prices since 1990: 56
Share of Americans that do not have enough money saved to pay their bills for six months: 3/4
The Inequality
Percentage of income gains captured by the top 1 percent in the first three years of the economic recovery: 95
Percentage income growth since 1967 for the top 5 percent of earners: 88?and for the top 20 percent of earners: 70?and for middle-income households: 20
Average income of top 1 percent: $1.2 million
Average net worth of the top 1 percent: $16.4 million
The share of wealth held by the richest 400 Americans: 1/2
The median household net worth in 2010: $57,000 ?and in 1983: $73,000
Percentage of the 1 percenters who said they were “middle class at heart”: 76
The total number of Americans living in poverty — with incomes of $23,492 for a family of four or $11,720 for an individual: 46.5 million
September 21, 2013 at 9:00 am
TP Wohlford says:
A large number of "middle class" jobs vaporized starting in the mid 1970's as automation replaced union workers. This combined with more durable goods that last longer (cars that go 250,000 miles, for instance).
Many point to "jobs going to Mexico/China" as a culprit. Certainly some did go there, but manufacturing jobs world-wide are in decline, akin to what the agriculture industry went through in the 20th century. Even the Chinese are losing manufacturing jobs: "China lost 16 million manufacturing jobs, a decline of 15 percent, between 1995 and 2002" (Forbes, 2012).
STEM jobs are usually seen as the future, and maybe they are. However, there are a startling number of PhD'd "scientists" walking the streets. Locally we've seen IBM and Cisco both announce substantial workforce reductions, which at least serve to cool off local hiring.
It is said that the 1970's cartoon "The Jetsons" showed us the future. IF that is true, then George's boss at Spacely Sprockets figured out that George -- whose job consisted of sitting at a desk, feat propped up, pushing a button -- can be replaced by a computer. Oh, except that in this new world, few people need "sprockets" anymore, and the ones that were built in the 1950's are still running.
September 21, 2013 at 9:04 am
TP Wohlford says:
Oh, another thought -- after WW2, the US had the lone intact manufacturing base. That, combined with a shortage of males in the workforce, created some pretty intense demand that drove up wages. Unions capitalized on this, and using extortion (okay, you guys give me a better word for it, but what do you call union goons and the mafia?) were able to get a bigger piece of the pie.
Now, the world's manufacturing base has been rebuilt, there is no shortage of labor, and as I point out, less labor is needed anyway.
