The Middle Class Is Falling Apart Before Our Eyes And It Is Worse Than You Think

The American middle class is dying right before our eyes. In the past decade alone, middle-income earners lost more purchasing power than they did between 1970 and 1990. That’s all thanks to the rising cost of living in the United States, which pushed median home prices from $17,000 in the 70s to almost $450,000 today. Cars, healthcare, education, gas, utilities, and everything we consume have faced an exponential price increase, but incomes have only risen by 66% over the last five decades, and inflation continues to eat away a higher share of people’s pay every month. The foundation that supports this group is crumbling, and that’s because more middle-class Americans than ever before are being left out of homeownership. Since 2020, about 11 million families that used to be in this income bracket are no longer a part of it as inflation has surged, reaching a peak of 9.1% in June 2022.  Another crucial part of the American Dream this generation can not afford anymore is retirement. A September Bankrate survey found that more than half of Americans in the workforce feel ’behind’ on their retirement savings. The nation’s retirement system is falling apart. And millions of middle-class people are downwardly mobile into poverty as they age. According to Aon Consulting Group, middle-class Americans ages 55 to 64 have an average of $82,000 in their retirement accounts, compared to the national average of $53,000. The problem is that they will need between eight and eleven times more in order to maintain their living standards in retirement. This means the median American household needs more than half a million more in their retirement account. We are working harder than ever, but even with two incomes, it is hard to make ends meet. In 1985, the typical male worker could provide a family of four with healthcare, housing, transportation, food, and college savings on just 40 weeks of income. Today it requires 62 weeks. About 90% of people in this group say middle-class life has gotten more expensive while wages aren’t keeping pace, American Compass reports. Moreover, even those in the “upper middle class” are now living paycheck to paycheck. A survey by Barron’s found that 51 percent of people with an annual salary over $100,000 run out of money on a month-to-month basis. At the same time, the average middle-income household carries $10,170 in credit card debt, data from the New York Federal Reserve shows - and record numbers say they are worried about being cut off from access to loans. Delinquency rates on credit cards, mortgages, and auto payments have all been ticking up as the level of household savings continues to drop. Last month, Sixty-day car payment delinquencies for people earning between $55,000 to $99,000 hit an all-time record of 6.1%, up from 5.8 percent in the prior month, according to data from Fitch Ratings. That’s the highest level of lateness since the company first started tallying rates in 1994, and just as all of the stats we reported today, it shows that middle-class Americans are being financially wiped out.  Some say that the American middle class is shrinking, or disappearing. But that doesn’t quite describe the depth of this crisis. The U.S. middle class has been destroyed by decades of failed policies that allowed the cost of living to become too unbearable for the average person. Now, we’re watching its slow and painful death happening all around us, and the entire country is going down with it.