Weekend Economists Revelations and Reviews April 26-28, 2013

[Demeter]

25. The Morose Middle Class By CHARLES M. BLOW

http://www.nytimes.com/2013/04/27/opinion/blow-the-morose-middle-class.html?_r=0

The Middle Class is in a funk, its view of the future growing dim as fear rolls in like a storm. An Allstate/National Journal Heartland Monitor poll released Thursday found that while most Americans (56 percent) hold out hope that they‘ll be in a higher class at some point, even more Americans (59 percent) are worried about falling out of their current class over the next few years. In fact, more than eight in 10 Americans believe that more people have fallen out of the middle class than moved into it in the past few years. The poll paints a picture of a group that is scared to death about its station in life.

By the way, 58 percent of respondents in the poll viewed themselves as either middle class (46 percent) or upper middle class (12 percent). According to the poll, Americans see a middle class with less opportunity to get ahead, less job security and less disposable income than the middle class of previous generations. Respondents were most likely (52 percent) to say that losing a job would put them at the greatest risk of falling out of their current class, followed by an unexpected illness or injury in the family. Most of those polled believe that higher education is the key to staying in the middle class, but many worry about its prohibitive cost and inaccessibility.

And who did most of them say is responsible for making it worse for the middle class? Congress, chief executives of major corporations and big financial institutions. Of those who blame politicians, there is some evidence that Republicans get more of the blame than Democrats. A CNN/ORC poll released last month found that 32 percent of respondents thought that Democrats favor the middle class compared with 27 percent who believed the same of Republicans. Sixty-eight percent of those polled believed that Republicans favor the wealthy, compared with 24 percent who believed that Democrats do.

This anxiety about a shrinking middle class is understandable. A Pew Research Center study, “The Lost Decade of the Middle Class,” released in August, found that “since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some — but by no means all — of its characteristic faith in the future.” According to the report, “Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living.”

The report continued:

“Their downbeat take on their economic situation comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers. But the middle-income tier — defined in this Pew Research analysis as all adults whose annual household income is two-thirds to double the national median — is the only one that also shrunk in size, a trend that has continued over the past four decades.”

...In his State of the Union speech in February, President Obama said that the “true engine of America’s economic growth” is “a rising, thriving middle class.” It certainly looks as if that engine has stalled.