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The Shrinking Middle Class: Median household income declining

11-01-2012 11:14 BJT

CCTV correspondent Ellen Scott

Of all the complex reasons why the number of middle class Americans has shrunk over the past 40 years, there’s one that’s pretty easy to understand. On average, middle class Americans are earning less money. According to the Pew Research Center in DC, the median incomes of middle class Americans dropped around 4.8 percent. 

The U.S. middle class - considered by many to be the core of America’s consumer-spending economy - has less money to spend these days, according to one of this country’s most respected research groups.

Kim Parker, Associate Director at the Pew Research Center, said, “In addition to asking how much it costs to lead a middle class lifestyle, we asked, is it harder today than it was 10 years ago to maintain a middle class lifestyle and 85% of our respondents said its harder today.”

From 2000 to 2010, the median household income for the “middle tier” of the U.S. middle class dropped from $72,956 to $69,487 a year. In fact, it’s the first time the “mean” family income across all tiers dropped since World War II - the Pew Center calls it “The Lost Decade of the Middle Class.”

It’s been forcing lifestyle changes on millions of Americans.

If the so-called middle class has less to spend – they are putting less back into the economy, only hurting the economy going forward.

During this decade of decline, gas prices have risen. In 2000, the average price at a U.S. pump was $1.70 for a gallon of regular gas. Now it’s averaging around three and half dollars nationwide.

Higher gas prices translate into more expensive groceries - forcing some middle class Americans to even cut back on food.

Despite all these setbacks, the Pew Center says most Americans remain optimistic.

Kim Parker said, “When we asked them about the future, people are quite optimistic and most still see themselves as upwardly mobile and they feel like their standard of living will eventually exceed that of their parents.”

Average Annual Change in Mean Family Income, 1950-2010

Weekly U.S. Retail Gasoline Prices Since 2000

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Editor:James |Source: CCTV.com

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