Well, along comes The Center for American Progress' "Middle Class Squeeze"
Families Work Longer to Pay for Middle-Class Items than a Quarter-Century Ago
by Christian E. Weller Ph.D., Senior Economist
October 20, 2005
Is the typical middle-class family doing better today than they were 25 years ago? The answer is no, according to new measures of economic well-being developed in this report. The combination of stagnant incomes and staggering cost increases for important middle-class items—housing, health care, education and transportation—have left families with less money to save and spend than just a few years ago, and working longer to achieve the same results as in 1980. According to the analysis here:
- In 2005, the average two-earner family needs to work 31.5 weeks to pay for taxes and a range of middle-class items (health care, housing, college, and transportation). That is an increase from 30.2 weeks in March 2001, and from 28.7 weeks in March 1979.
- In 2005, after paying for the items outlined above, the average two-earner family had about $19,542 left to pay for basics—such as clothing, food, and utilities—to save for retirement, to improve their economic well-being, and to spend on any leisure and recreation. That is $951 less than families had in 2000 and $1,702 less than in 1980.
- While families spend less today on taxes than in 2000—the tax cuts were real—those tax cuts do not offset the cost increases of expenditure items, particularly housing, health care, and education.
- Middle-class families have addressed the economic squeeze by working longer hours. This has meant less time to spend with children and higher out-of-pocket expenditures for child care and for food outside the home.
- Over time, middle-class families have also maintained their consumption levels by borrowing more money. Household debt soared to a record 116 percent of disposable income in March 2005. Average debt service burden levels have remained high throughout the current business cycle.
- The economic squeeze tends to be worse for minorities than for whites. Specifically, income declines have been larger for Hispanics than for African-Americans and greater for African-Americans than for whites.