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You are here: Home / Occupy Wall Street / To Have & Have-Not: What Happened to Middle Class?

To Have & Have-Not: What Happened to Middle Class?

November 21, 2011 by Jennie

For most Americans, the pursuit of great wealth is more fantasy than reality. The real pursuit, for most, has been the promise of a “middle class lifestyle”. But what does “middle class” mean, in real terms, in 2011?

You probably consider yourself “middle class” if you have a roof over your head, live in a safe neighborhood, drive a decent car and have some kind of medical insurance. You probably have some money left over after paying your bills to funnel into college savings, lessons for your children or a family vacation.

But, according to a recent Congressional Budget Office report , you are truly middle class in America today (earning the median income), if your take-home pay is $49,445.

That is just 7% more than a middle class family earned in 1979, when the median income was $46,074. But between 1979 and now, consumer prices have risen around 300%. And even in inflation-adjusted terms, there are certain things you would be paying disproportionately more for today. For example, the median home price in 1979 was around $64,000, about 1.5 times the median income. Today, the median home price is around $215,000, over 4 times the median income. Healthcare and transportation have also risen disproportionately.

And while it’s true that some things are actually relatively cheaper today than they were in 1979 — electronics, televisions, clothing, for example — many of the “basics,” those fundamental things you shouldn’t have to live without in a prosperous country, have become so expensive that they are almost out of reach for the average family. (It won’t surprise you to know that while the bottom 90% of the nation’s population has 2.5% of the nation’s wealth, it has 73% of the nation’s debt).

So in real terms, the $46,074 a median-income family earned in 1979 would be worth $144,000 today, a figure that would put them soundly in the top 10% in 2011. So, if you grew up in a middle class family in the 1970s, your family could probably afford the kind of lifestyle only an affluent family can afford today.

Today, with your “middle class” income of $4,120 per month, once you have paid your rent, your utilities, your cell phone, your insurance premiums and your commuting expenses, how much is left over for food and clothing, let alone child care and uncovered medical expenses such as prescriptions and glasses? College savings, piano lessons or a family vacation don’t even enter the picture.

So, while once upon a time, the American promise was a middle class lifestyle for all, the cost of basic existence — a roof over your head, medical care, food and reliable transportation — have so far outpaced wage growth that to be middle class in America today is to be poor.

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Filed Under: Occupy Wall Street, Uncategorized Tagged With: cost of living, income inequality, middle class, occupy wall street, ows

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