The Death of the American Middle Class

The Death of the American Middle Class

Unless the country changes direction, the death of the American middle class may actually arrive. What was once a nation that believed hard work resulted in a comfortable lifestyle is turning into a country that coddles its wealthy while pushing those with lesser incomes closer and closer to bankruptcy.

The Death of the American Middle Class

The death of the American middle class has been in the works for a while. Stagnant wages are one reason that people are struggling to stay afloat financially. According to the Huffington Post1, since 1979, middle class wages are up by just 6 percent while the salaries of low wage workers are down by 5 percent. Those with high wages have enjoyed an increase of 41 percent from 1979 to 2013. Pew Research’s associate director, Rakesh Kochhar, said, “There are fewer opportunities that place people in the middle of the income distribution.”

The only real income boost for those on the low side of the salary scale was during the 1990s when the tech boom arrived. Otherwise, middle- and low-income families have failed to see noticeable financial growth. Along with faltering wages, middle class wealth has also disappeared. From the time of the Great Depression to the early ‘80s, the middle class’s share of the country’s wealth almost doubled. Since that time, the middle class share of the financial pie has dropped down to its lowest level since 1947.

Homeownership is Financially Out of Reach for Many Americans

In addition to wage stagnation and a loss of overall wealth, housing is also becoming unaffordable. After the Great Depression, achieving the American Dream involved homeownership. Now, with the country nearly 10 years past its most recent economic crisis, America is transitioning into a renter nation. This is also pushing people out of their middle class standing.

The cost of buying necessities like food and clothing has stayed about the same or decreased during the last 30 years, but housing prices have escalated. As prices grow, homeownership rates drop. When the housing boom of 2004 arrived, homeownership rates peaked at around 70 percent. Since that time, they have reached a low of below 64 percent.

Financial Security is Disappearing for Those Nearing Retirement

A number of middle class Americans close to retirement no longer have financial security. According to Raw Story2, 19 percent of adults who range in age from 55 to 64 do not have savings put aside or access to a private pension for retirement. In addition, baby boomers who have retired are finding that the money they put aside for retirement is inadequate despite having worked for companies that offered traditional pensions instead of today’s 401Ks. Because of this, many baby boomers are delaying their retirement. Americans who are of retirement age today are also facing more housing, car and student loan debts than those who retired 10 years ago.

Income Inequality is a Factor in the Death of the Middle Class

When income inequality rises, it usually diminishes a country’s middle class and weakens economic growth. Today, the upper class has control of 49 percent of America’s aggregate income. This is an increase of 29 percent from 1970. In the past, the middle class earned the biggest portion of America’s total income. For instance, in 1970, the middle class had 62 percent of it. Since then, the middle class’s share of America’s total income has dropped to 43 percent. CNN3 confirms that the lower class has lost some ground here as well. In 1970, it controlled 10 percent while it has just 9 percent today.

The wealthiest Americans are not only outperforming the middle class in terms of income, but they have also seen their wealth surge over the last 30 years. From 1983 to 2013, the median net worth of upper class families doubled to around $650,000. During these same years, middle class wealth increased by a mere 2 percent to about $98,000.

A Slow Death for the Middle Class

Many of the country’s citizens have worked hard throughout their lives and played by the rules to obtain the American Dream. Constant financial struggles are causing them to lose hope that they will ever be financially secure. Downward mobility is on the rise, and due to increased drug use combined with higher suicide rates that often come about because of financial stress, today’s young males have a shortened lifespan than past generations. Kochhar said, “Some research shows that increased income inequality and a hollowing out of a nation’s middle class stunts economic growth.” To read more, visit

  1. Huffington Post
  2. Raw Story
  3. CNN