Middle Class Glum on Economic Status

Study: negativity is highest since 1964 - Majority say they've made no progress, or have fallen backward
HOPE YEN - Associated Press (Charlotte Observer – 4/10/08)

Growing numbers of middle-class Americans say they aren't better off than they were five years ago, reflecting economic pressures amid growing debt, a study released Wednesday shows.

Their short-term assessment of personal progress, according to the study, is the worst it's been in nearly half a century.

The survey by the Pew Research Center, a Washington-based organization, paints a mixed picture for the 53 percent of adults in the country who define themselves as "middle class," with household incomes ranging from below $40,000 to more than $100,000.

It found that a majority of Americans said they haven't progressed in the last five years. One in four, or 25 percent, said their economic situation had not improved; 31 percent said they had fallen backward. Those numbers together are the highest since the survey question was first asked in 1964.

Among the middle class, 54 percent in the current survey said they had made no progress (26 percent) or had fallen back (28 percent).

Asked about their financial experiences in the past year, 53 percent of middle-class people said they had to cut spending because money was tight. About one in five said they had trouble getting or paying for medical care, while 10 percent said they had been laid off or lost their jobs.
Looking ahead to the coming year, half of the middle class surveyed said they expected to have to cut more spending.

Among those employed, one in four, or 25 percent, expressed worries that they would be laid off, that their job would be outsourced, or that their employer would relocate in the coming year, while 26 percent were concerned that they would see cuts in salary or health benefits.

At the same time, most middle-class people remained upbeat when asked to measure their progress over a longer time frame. Two-thirds say their standard of living is better than the one their parents enjoyed at the age they are now.

"It's been a lousy run for the American economy, and people feel it," said Paul Taylor, director of Pew's Social & Demographic Trends project and lead author of the study.

He noted that people's pessimism largely tracks annual median household income, which has gained little in recent years. Middle-class people also may be disproportionately feeling the pinch because they tend to borrow more heavily against their homes to support their lifestyles, Taylor said.

Among other findings:
- Nearly eight in 10 of all people, or 78 percent, said they believe it has become more difficult compared with five years ago for the middle class to maintain their standard of living, up from 65 percent in 1986.
- Among the income winners 1970-2006 were seniors 65 and older, blacks, native-born Hispanics, and married adults.
- Losers included young adults (ages 18 to 29), the unmarried, foreign-born Hispanics, and people with a high-school education or less.

The Pew poll involved telephone interviews with 2,413 adults, conducted Jan. 24-Feb. 19. The margin of sampling error was 2.5 percentage points.

Blogger's note: If this is the perception the public has regarding their "buying power" , makes you wonder how they see their credit status. "The 700's of today are the 550's of tomorrow!" -GC