Report: Middle Class Steadily Shrinking
The “middle class” has for the better part of the last century remained an attainable ideal for most Americans.
It’s the economic sweet-spot, where jobs are stable, people are self-sufficient and families have nice homes as they can continue to work toward a place of greater prosperity.
But our Miami foreclosure lawyers know that today, five years post-Great Recession, many families are coming to the difficult realization that not only are they no longer a part of this class, they may never be again.
Instead, they have been relegated to the status of “working poor.”
These are college-educated former professionals who have been forced to work folding t-shirts in retail or stocking grocery store shelves. These are recent retirees who are wrestling with rising costs and forced to choose between medicine or mortgage. These are people who are barely scraping by with part-time positions, but are desperately seeking something full-time and more permanent.
Inevitably, these changes have had a substantial impact on not just the housing market, but the economy as a whole.
A survey released by the Pew Research Center in January reports that in the last five years, the number of people who identify as “middle class” has declined by nearly 20 percent, from 53 percent in 2008 to 44 percent in 2012. While just 20 percent of Americans identified as “lower-middle class” or “lower class” in 2008, today that figure has doubled to 40 percent.
This goes to further reflect the realization of the fact that the income gap is growing wider. While the middle class shrinks, the wealthiest just keep getting wealthier. When researchers analyzed data from the U.S. Census Bureau, they found that the difference between what the richest 5 percent earn and what the median-income household makes has grown by nearly 25 percent over the span of just three decades.
Middle class has always been somewhat of a tough concept to define. There’s no exact income level or lifestyle that defines the standard, and it can vary from place-to-place. Generally, though, it’s been recognized as a state of mind. It’s a feeling that money woes are not of high concern.
But that’s less and less the norm. A family whose breadwinner once earned $80,000 annually may have considered themselves solidly middle class. However, the Great Recession brings on a layoff, perhaps a medical emergency. Suddenly, they are in debt and their income has shrunk by more than half.
This is experience has become increasingly common. The recession had the long-term effect of shrinking the economy by nearly 9 million jobs. A huge portion of those were middle-income jobs.
One of the primary measures of “middle class status” – home ownership – has also taken a drastic hit, even as a glut of foreclosures hit the market. That should have meant that first-time home buyers would have had an advantage. However, many were outbid by cash-paying investors.
Beyond that, people are finding they can barely afford groceries, let alone vacations, saving for their children’s college costs and initiating a secure retirement plan.
The good news is that the economy is seeing some improvement – small, but certainly noteworthy.
Those who are battling debt or fighting off a foreclosure would benefit from an attorney who can help you Negotiate From Strength.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Debt Warriors with Bruce Jacobs,” discussing foreclosure topics that matter to YOU.