The middle class has been steadily shrinking, but most Americans still believe that they are a part of it. Perhaps this is due at least in part to the egalitarian values which have been pounded into our heads for most of our lives. Very few Americans would have the gall to define themselves as “upper class”, and I have never met anyone that would describe themselves as “lower class”. In place of “lower class”, many politicians now like to use the much more politically correct term “working class”, but a more apt description might be “the working poor”. Today, half of all American workers make less than $30,533 a year, and you certainly cannot support a middle class lifestyle for a family with children on that kind of income.
We just got more evidence that the middle class in America is rapidly disappearing. According to a shocking new study that was just released, 62 percent of all jobs in the United States do not pay enough to support a middle class life. That means that “the American Dream” is truly out of reach for most of the country at this point. Today, Americans are working harder than ever but the cost of living continues to rise much faster than our paychecks are increasing. Earlier this month, I went and looked at the latest numbers from the Social Security Administration, and I discovered that 50 percent of all American workers make less than $30,533 a year. But that is just above poverty level. In fact, the federal poverty level for a family of five is currently $29,420. Most families are just barely scraping by from month to month, and most U.S. workers are just one major setback away from falling out of the middle class.
The middle class in America has been declining for decades, and we continue to get even more evidence of the catastrophic damage that has already been done. According to the Social Security Administration, the median yearly wage in the United States is just $30,533 at this point. That means 50 percent of all American workers make at least that much per year, but that also means that 50 percent of all American workers make that much or less per year. When you divide $30,533 by 12, you get a median monthly wage of just over $2,500. But of course nobody can provide a middle class standard of living for a family of four for just $2,500 a month, and we will discuss this further below. So in most households at least two people are working, and in many cases multiple jobs are being taken on by a single individual in a desperate attempt to make ends meet. The American people are working harder than ever, and yet the middle class just continues to erode.
Have you lost your spot in the middle class yet? For years I have been documenting all of the numbers that show that the middle class in America has been steadily shrinking, and we just got another one. According to a report that was produced by researchers at Harvard University, the number of Americans that spend more than 30 percent of their incomes on housing has more than doubled. In 2001, nearly 16 million Americans couldn’t afford the homes that they were currently living in, but by 2015 that figure had jumped to 38 million.
The middle class in America has been shrinking for decades, and our leaders seem powerless to do anything about it. Two years ago, the middle class became a minority in this country for the first time ever. In other words, the middle class now accounts for less than 50 percent of the population. But back in the early 1970s, the middle class made up more than 60 percent of the population. I have often compared being in the middle class to playing a really bizarre game of musical chairs. When the music stops playing each month, more chairs are being pulled out of the middle class, and most of us are just hoping that we will still have a chair for the next go around.
In this day and age it seems like almost everything is disposable, and many employers have found that they can make a lot more money if they have a workforce that can be turned on and off like a faucet. In America today, there are more than 17 million “independent workers”, and they represent a bigger share of the workforce than ever before. Federal laws give a lot of protection to “full-time workers”, but for temporary and contract employees it is a much different story. Temp workers don’t get health insurance, vacation time or retirement benefits. They are simply paid for the limited amount of time that they are needed and then they are disposed of immediately. There has always been a role for such workers in our economy, but these days some of the biggest corporations in the entire country are getting rid of “full-time workers” and replacing them with temp workers just so that they can make a few extra bucks. As a result, the ranks of the “working poor” continue to expand, and the decline of the middle class is accelerating.
In its discussion of historical middle class societies, The Economist reports, “Their members are neither rich nor poor but somewhere in-between…’Middle-class’ describes an income category but also a set of attitudes…An essential characteristic is the possession of a reasonable amount of discretionary income. Middle-class people do not live from hand to mouth, job to job, season to season, as the poor do.” Some argue that the most sensible income amount to attach to the middle class would be the median household income, of around $54,000.