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American middle class, expenses grow faster than paychecks

As the price of necessities go up it become a constant squeeze America’s middle class

In the aftermath of the Great Recession, millions of middle-class people are being pinched by stagnating incomes and the increased cost of living.

America’s median household income has dropped by more than $4,000 since Y 2000, after adjusting for inflation, and the typical “stuff” of middle-class life are moving out of the financial reach for many families.

Families with young children are struggling to afford childcare and save for the rising costs of college. Those nearing retirement are scrambling to sock away funds so they do not have to work till death. A weak labor market means that employed Americans are not getting the pay raises they need to keep up especially with big-ticket items such as health care that erodes their paychecks.
Economists say it boils down to two core problems: jobs and wages. The traditional American “middle-class job” is disappearing.

Mid-wage occupations such as office managers and truck drivers accounted for 60% of the job losses during the recession, but only 22% of the gains during the recovery, according to a National Employment Law Project analysis of Labor Department data. Low-wage positions, on the other hand climbed 58%.

Uncertainty and insecurity are weighing down the American middle class, even those who have not had a break in employment. More than 40% of those surveyed in a recent Rutgers University study said they were “very concerned” about job security.

They are also not very optimistic about the near future. Fewer than 33% believe that economic conditions will improve in Y 2014, and an equal number think they will get worse, according to the Rutgers survey, conducted by the university’s Heldrich Center for Workforce Development. Just 19% believe that job, career and employment opportunities will be better for the next generation.

The Rutgers survey’s title has it right: “Diminished Lives and Futures: A Portrait of America in the Great-Recession Era.”

Economists say they do not expect much improvement for the middle class any time soon. The recession is officially over, but the recovery is fragile, and its gains are not evenly spread.

Between Ys 1993 and 2011, the top 1% of America’s earners saw their income rise by 58%, while everyone else only got a 6% blip. That makes it harder for most households to get ahead.

The middle class in the USA was always synonymous with economic security and stability, now it is synonymous with economic anxiety.