Pew Study: Middle Class Losing Ground

Two recessions helped the American middle class to lose significant ground in the last decade.


The hallmarks of middle-class status -- the house, the fence -- are increasingly out of reach for many Americans.

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The middle class is shrinking, losing its money, and uncertain about the future, according to a new report from the Pew Research Center. Middle class incomes and wealth have fallen considerably in just a decade, and the group is also being "hollowed out," now comprising 51 percent of all adults, compared to 61 percent in 1971. 

"Wherever we looked, it was worse off now than 10 years ago, and by some measures, this period is setting historic records for not only gloominess but economic impact." says Rich Morin, a senior editor at the Pew Research Center.

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In 2010, "middle income" meant a family income roughly between $39,000 and $118,000 for a family of three. That range has slid since 2000, when the same family made $42,200 to $127,000. Median household income for the middle tier of earners has also fallen from nearly $73,000 in 2001 to nearly $69,500 in 2011. Net worth plummeted by around 40 percent, meanwhile, falling to $93,150 in 2010 after ascending to $152,950 in 2007.

Not everyone suffered equally. Americans age 65 and older were the biggest "winners" from 2001 to 2011, according to the study. They experienced the largest positive "change in income status"—a measure of the group's change in the upper-income category minus the change in the lower income category. That shift for this group is 10.4 percent, showing a substantial shift into the upper income tier.

People who are married, whether with or without children, also all fared better in 2011 than in 2001, as well as whites and women, though to a lesser extent.

Meanwhile, people with a high school diploma only, as well as single people, saw some of the biggest shifts downward into the lower-income category. In 2011, more than one-third—36 percent—of these people were lower-income, compared to 32 percent in 2001. Some 34 percent of people who were never married were lower-income in 2011, compared to 30 percent in 2001. Neither of these groups made any gains in the upper-income category.

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Aside from demographic differences in who is better and worse off, there are also sizable gaps in optimism, Morin points out.

"As a group young people, but also minorities, particularly blacks, are less pessimistic," he says. "[Minorities] tend to be more optimistic about their financial futures than do whites."

Fully 87 percent of middle class blacks say that they expect a better standard of living than their parents during their peak financial years. For all middle-class adults, that figure is 71 percent. And 83 percent of adults age 18 to 29 believe they will be better off than their parents, compared to just 71 percent for people age 39 to 49 and 62 percent for those age 50 to 64.

Understanding how Americans view themselves and their financial futures is more than just an interesting demographic study. The coveted "middle class vote" appears to be firmly in President Obama's favor. Some 52 percent of self-identified middle-class adults believe that Obama's policies would help the middle class, compared to 42 percent who say the same for Romney's policies.

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In addition to supporting the president, it appears that the group generally skews toward the Democratic Party. Middle-class Americans are more likely to identify as Democrat (34 percent) than Republican (25 percent), with 35 percent claiming that they are Independents. Some 37 percent say that the Democratic party favors the middle class, while only 26 percent say the same of the GOP.

Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter at @titonka or via E-mail at