Downward mobility is catching on fast with America’s new economic underdogs — the emerging middle-class minority.
The ranks of the American middle class have sunk to a shocking new low.
After four decades as an economic majority, middle-class Americans are no longer in that admirable place. They’re down to 49.9 percent from 61 percent of the population in 1971, with the ranks of the poor and ultrarich growing to a majority in the US.
“The fabric of income distribution is stretching thin,” Rakesh Kochhar, lead author of the recent Pew Research Center study “The American Middle Class Is Losing Ground,” told The Post.
“There’s been a hollowing out in the middle, a bulking up on the edges. The gaps are at record highs,” Kochhar said, adding that the wealth of upper-income families is now about seven times that of the middle class, compared with three times about 30 years ago.
Meanwhile, the middle-class share of US household income has plunged from 62 percent in 1970 to 43 percent today.
And for lower-income families looking to move up to middle-class status, that accomplishment is getting harder to pull off, according to new analysis.
Analysts offer no single explanation for the decline of America’s middle class.
Years of wage stagnation, the decline of unions, a skills gap, economic malaise, taxation, debt and policymaking are often cited, as is technological efficiency in a more globalized economy that rewards outsourcing. Some analysts say the Fed’s trillions of dollars in quantitative easing ended up disproportionately in the hands and wallets of bankers and other upper-middle-class Americans.
This group sopped up extra millions in commissions, fees and bonuses, improving their status, at the expense of Main Street.
Meanwhile, partly because of the Great Recession and the housing market disaster, the middle class saw its median wealth (assets minus debts) drop by 28 percent from 2001 to 2013.
Statistically, middle-class Americans now number about 121 million.
In New York state, the percentage of residents classified as middle class is much lower, hitting 42 percent in 2013, a 2.8 percentage-point decline from 2000, according to a Pew Charitable Trusts Stateline analysis earlier this year.
For purposes of the study, middle-income Americans were defined as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three.
Tsee Lee, in his mid-30s, doesn’t feel special.
But the Manhattan public high school teacher, five years on the job, is the definition of middle class — despite perceptions to the contrary.
Earning about $54,000 annually and single, Lee frets about the high cost of living in New York City, from his rent to other overhead. He also worries about losing future benefits and payouts.
“I don’t feel middle class,” he told The Post. “I don’t have enough disposable income left over after I’ve paid all my monthly bills. I am putting some money aside for retirement, but I’m sure not spending on vacations.”
Lee, an ex-economic researcher, says the American Dream is dead.
“There’s a myth that the US economy increasingly requires high levels of education or specialized skills,” he said, “but everyone from auto workers to sanitation workers to professionals like teachers [once] did well, whatever their résumé showed.”
Added Lee: “The sharing economy, from Uber to Handy to Airbnb, typifies this race to the bottom. They claim to create jobs, but billions of dollars are made at the top by hedge funds and venture capitalists.”
By Natalie Johnson ~ Belief in the American Dream among millennials is dimming as the nation’s largest generation continues to face steep socioeconomic barriers despite overall economic recovery, according to a new report. Generation Opportunity, a nonprofit organization advocating limited government to spur opportunity for young Americans, reported Tuesday that for the first time in U.S.…
Today, the state of the American Dream—the ability of anyone to work hard and get ahead—largely depends on one’s zip code. That is more than a little troubling, given that 97 percent of Americans believe everyone should have an equal shot at success.
“Another article about Millennials?” you might be asking yourself. I can guarantee this is unlike most articles you have read. The industry is buzzing about the opportunity these future homebuyers will create for lenders. However, the fact of the matter is that most Millennials are still not buying homes. Because of this, I decided to …
Chapter 2 in a comprehensive report from the AEI-Brookings Working Group on Poverty and Opportunity provides a thorough review of how trends in family, composition, employment, wages, and education affect poverty and economic mobility. These are facts that experts across the political aisle can agree on, and that serve as the basis of the report’s final recommendations for reducing poverty and restoring the American Dream.
In 18-29-year-olds, 48 per cent thought the dream is over, although there was a slim majority of 49 per cent who believe it is still alive, according to a Harvard Institute of Politics (pictured) survey.
What happened to the Golden State? In the mid-twentieth century, California was the American Dream within the American Dream; a booming economy, vibrant middle-class, and an unshakeable optimism for the future were hallmarks of a state that had become the crown jewel of the Empire of Liberty.
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