Moving Down

Last week, during the Democratic National Convention, in a rare display of party message discipline, viewers heard Bill Clinton, Elizabeth Warren, and a raft of other speakers talk about the best way to “grow” the economy—“from the middle-class out and from the bottom up.” They were careful, though, to avoid certain phrases to describe that bottom—including “lower class” and “lower middle class”—and for good reason. Most people don’t like to identify themselves as low-income, even when they are.

That’s changing, though, according to a report out yesterday from the Pew Research Center. The percentage of American adults who say they are lower-middle- or lower-class has risen to 32 percent, up from just 25 percent of adults in 2008. People younger than 30 are more likely to put themselves on the economic bottom rung, and the number of whites who identify as lower-middle or lower-class has grown faster than the number of blacks or Latinos who identify that way.

These people are also more likely to have struggled economically in the past year—from skipping rent to losing a job—and are less satisfied with their financial situations, family life, and housing than their counterparts in the middle and upper classes. More important, they have a sour outlook on the future. About three-quarters said it is harder to get ahead today than it was ten years ago. Roughly half said hard work brings success—compared with the 67 percent of the middle class and 71 percent of the upper classes who hold that view.

 

In past years, more adults identified as middle-class. In an August 22 Pew report, 85 percent of respondents said a middle-class lifestyle was harder to maintain in the past decade than in earlier times, in part because incomes and net worth for households in the middle have both fallen since 2000. Though yesterday’s survey doesn’t get into why the self-identification has changed, it’s likely that because of the recession, respondents have seen a decline in both their real economic situation and their perceived economic station, which is just as important. The definition of middle-class is squishy; it means neither rich nor poor. Most economists define the middle class as falling somewhere in the broad household income range of $40,000 to $120,000 a year. Even within that range, though, things get complicated. It’s hard to raise a family on $40,000 a year in any of the expensive coastal cities. On the other hand, a person who makes $120,000 in a place like Owsley County, Kentucky, where I spent more than two months reporting earlier this year, is well into the rich zone because the area’s median income—about $19,000 a year—is so low.

When you ask everyday people—as Adam Davidson from NPR’s Planet Money reporting team did this year in a series on the mill town of Greenville, South Carolina—they tend to define middle-class less as an income level and more as a way of life. At an event in New York City in July, Davidson talked about his conversations. “In Greenville,” he said, “‘middle-class’ meant you could have health benefits, a steady job, you could own your own house, and you could own your own boat.” He spoke to two retired truck drivers who felt their earning years had enabled them to live a fantasy life. “We lived our life to the fullest,” one said.

Living life to the fullest means something different to everyone, but it’s safe to say it includes freedom from the kind of worries plaguing those who now identify as lower-income. It means taking an annual family vacation and having a car that runs properly. In other words, it’s not necessarily what your salary is but what it can buy you.

That’s some of the reason the decline in real wages over the past three decades—the Planet Money reporters pointed to 1978 as the year the American dream started to die—was hard to notice at first. Americans started covering up the decrease in their earnings by increasing their borrowing. Credit came to replace income not just because families no longer had the wages to buy what they needed but also because, in an economy driven by consumers, businesses still needed customers. The collapse of credit is part of why these families are feeling the pinch.

It’s hard to say what all this means politically. In the last four years, the number of conservatives who describe themselves as lower-income has also grown, from 19 percent to 32 percent. That means that lower earners identify as conservative, moderate, and liberal in roughly equal numbers. Only about 3 percent of Americans surveyed said that the Republican Party is concerned with the needs of the poor, while a bigger but not huge portion, 30 percent, said the Democratic Party does. Whether the increasing number of Americans struggling financially want to place their hopes with either one, though, won’t be answered until November.

Comments

I'm really doubtful if we continue as we are that things will get any better. Our so called "job creators" do "create jobs", but these jobs are likely to be in places like Mexico and China, or other countries you'll need "Google Earth" to find. The good paying industrial union job your parents might have had are mostly gone today. Replaced with "service industry" jobs that usually only pay minimum wage.

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