What does "middle class" mean in your eyes?
Eat and wear without worry, husband and wife each have a job with a good income and good social evaluation?
Two children, a big house, at least a car?
Weekends to the suburbs for a relaxing break, long holidays to travel abroad or abroad?
The only trouble in life is probably: why is he just a boring office worker who did not pursue the artistic dreams of his youth?
If the once middle class was a symbol of the American dream, our imagination of them today may have been lost for a long time.
01
Instability is becoming a new feature of the American middle class
A 2018 financial survey by the U.S. Central Bank found that a third of the middle class in the U.S. wouldn't even be able to come up with $400 if faced with unexpected spending. Only about 25 percent of middle-class households have enough savings to cover six months of living expenses. The middle class is defined here as households with an annual income of between $40,000 and $85,000 in 2018.
In the latest polls, when people are asked if they belong to the middle class, most people are reluctant to put on such a hat for themselves, and many people identify themselves as working class. Economic policy research expert Lawrence M. Michelle said that people who thought they were middle-class in previous years no longer see themselves that way.
When considering the state of the economy, we have always thought of it as a relatively stable state, either poor or not poor; either middle class or not. But in fact, the economic situation of many middle-class people in the United States is far from ideal. Bradley Hardy, an associate professor of public policy at Georgetown University, argues that instability is becoming a new feature of the American middle class.
02
Has the U.S. middle class really shrunk?
So why has america's middle class changed like this?
A Pew Research Center study found that the middle class, once the mainstay of American society, has begun to shrink since the 1970s. In 1971, about 61 percent of Americans were considered middle class, and by 2019, that number had fallen to 51 percent.
What is the current situation of the American middle class? Is America's middle class shrinking? This issue has been widely discussed in recent years.
Lawrence P. Michelle argues that this question is also less easy to answer, because as a country, the United States has never really had a formal definition of the middle class.
Janet Gornick, a professor of political science at City University of New York, said: "At a recent symposium, when someone literally stated that there is no middle class in the United States. I suddenly understood that this was a political rhetoric. I know that this statement means that the people in the middle are not doing well, but it is not accurate. ”
In 1985 and 2016, the size of the middle class did not shrink in the 16 wealthier counties of the United States, according to research data. Even if nothing has changed. In both 1985 and 2016, the U.S. middle class made up 59 percent.
03
Maintaining a decent life is becoming more and more expensive
Experts like to use the term "squeezed" to describe the dilemma facing the American middle class today.
Even on a strict data basis, the size of the U.S. middle class has not shrunk. But they do face the pressure and anxiety of maintaining middle-class status.
How can we live a middle-class, quality of life? It's really not easy for Americans today. It's not so easy for people to pay their rent, let alone own a house of their own. In their thirties, they don't want kids much because raising kids is really too expensive. Not to mention medical issues, without health insurance, they simply can't get adequate medical care. This is the problem that the middle class is facing.
So rather than shrinking the middle class, it's more accurate to say that the middle class lifestyle has become more expensive and uncertain.
The younger generation is also beginning to face these dilemmas. In 2019, 60 percent of millennials were middle-class, compared to 70 percent among baby boomers.
Chantal Jacob lives with her husband in the suburbs of Texas with one child. Their household income is $100,000 a year, which should be considered middle class.
Chantal said they were also worried about financial stability. Six-figure annual income, sounds great. But once married, the $500 tax alone goes out. In addition, there is insurance for the whole family, and a college fund for the son. Before the cost of living was made, $800 was gone. In addition, the rent is $1700, the electricity is $150, the phone bill is $280, and the internet fee is $60. There's also a car, which costs about $800 and vehicle insurance for $400. Spend $400-500 a month on food, and it's increasing.
Chantal thinks he works hard every week, he's budget-conscious, and sometimes he hears people say, you're so lucky to have such a great job, you don't know what to say.
04
Why is the middle class so anxious?
So why does the American middle class live so hard?
The first reason is stagnation in income.
From 1970 to 2018, the U.S. middle class's share of total income fell by 19 percent. By contrast, incomes for the wealthy rose 19 percent.
A Brookings institution study found that the income of the middle class is about half the rate of growth at the top and bottom of income by about half, or about 10%, compared to the growth rate of 20% at the top and bottom of income.
Chantal said that after staying at one company, revenue stagnated, increasing revenue by about a few thousand dollars over several years. If you want to achieve a jump in income, you can only jump ship, but this option itself is not stable and safe. Over the past 40 years, while the U.S. economy has been growing and the pie has grown, the middle class has not fully benefited from the overall upward economy. According to the data, the average worker's income lags behind 43 percent compared to productivity growth. This means that over the past 40 years, the middle class should have earned 1% more per year. But they didn't get that amount. Because inequality is rising, the top 10 percent of income, especially the top 1 percent, or 0.1 percent, own most of the profits in economic growth.
The second reason is the sharp increase in the cost of living.
Despite stagnant incomes, the cost of living has risen sharply over the years.
Over the past 50 years, the incomes of the average American household have grown by only 16 percent, housing costs have increased by 190 percent, and college tuition has soared 264 percent.
Shantar said he had just moved into the apartment five years ago and the rent was $1,100, and now it's $1,700. But his salary didn't increase by $600.
Rising spending on health care, housing and education has put enormous income pressure on middle-class families. For cities where the cost of living is already relatively high, it is even worse.
A 2018 analysis found that raising a family in coastal cities like San Francisco and New York and living a middle-class lifestyle requires at least $300,000 a year. In 2020, only 10% of households earn more than $200,000 a year.
Chantal mentioned that he recently saw an apartment in Plano, where he worked, and thought it would be great if he could walk to work. The price was about $2400, which she thought was crazy. Not to mention the townhouse with a monthly rent of $5500.
The third reason is policy issues.
Policy support may be both a consequence of the survival of the middle class and a solution to the problem.
Chantal believes that no policy can help him. Once they get a job, they say, all you need is a job, and now that you've got it, keep working on it.
The stagnation of people's wages began in the 1970s, when productivity growth was slow. But after 1970, productivity began to accelerate. In the 1980s, the top 1 percent of incomes grew richer and inequality rose dramatically. The stock market rose sharply, but everyone's salary did not increase. The problem is closely related to problems such as policy easing, increased unemployment and weakened trade union power, and failure to raise the minimum wage.
The globalization of low-wage jobs has indeed given prominence to blue-collar jobs in many places. The key problem is that the economy has not gotten any worse, and it is precisely because of some U.S. policies that the benefits of economic growth are not widely shared with the vast majority of people.
In 2021, the U.S. government intends to revitalize the middle class. Beginning in November 2021, the government introduced a $1 trillion infrastructure bill and a bill to rebuild a better future, both of which are designed to support middle-income households. However, whether these bills can really change the situation of the middle class remains to be verified.
At least he hasn't seen a noticeable change yet, Shantar said. She believes that the entire middle class is in a precarious position, and that an accident or a disaster can bring them back to their original form.