The standard of living for Americans has fallen longer and more steeply over the past three years than at any time since the US government began recording it five decades ago. The average individual now has $1,315 less in disposable income than he or she did three years ago.
Three factors have led to the decline of the middle class: Stagnant incomes, falling net worth of homes, and the last is rising consumer prices. To be sure, the recession has hit unevenly, with lower-skilled and less-educated Americans feeling the pinch the most, says Mark Zandi, chief economist for Moody’s Economy.com. The pace of change has been incredibly rapid and incredibly tough on the less educated.
The index, a combination of the unemployment rate and inflation, is now at its highest point since 1983 Some 64 percent of Americans worry that they won’t be able to pay their families’ expenses at least some of the time, according to a survey completed in mid-September by the Marist Institute for Public Opinion. Among those, one-third say their financial problems are chronic.
Income loss is hitting the middle class hard, especially in communities where manufacturing facilities have closed. When those jobs are gone, many workers have ended up in service-sector jobs that pay less. Even people with college degrees are feeling the squeeze. Since 2007, Americans’ collective net worth has fallen about $5.5 trillion, or more than 8.6 percent. The bulk of that decline is in real estate, which has lost $4.7 trillion in value, or 22 percent, since 2007.
Title: A Long, Steep drop for Americans Standard of Living
Author: Ron Sherer.
Publication: The Christian Science Monitor, October 19, 2011
Student researcher: Sean Lawrence, Sonoma State University
Faculty Advisor: Peter Phillips, Sonoma State University