A new report by the Pew Research Center corroborates what many folks in the U.S. have been feeling for years: the middle class is getting squeezed. Here are a few key insights:
- Americans feel stuck in their tracks. A majority of survey respondents say that in the past five years, they either haven't moved forward in life (25%) or have fallen backwards (31%). This is the most downbeat short-term assessment of personal progress in nearly half a century of polling by the Pew Research Center and the Gallup organization.
- From 1983 to 2004, the median net worth of upper-income families more than doubled, while the median net worth of middle-income families grew by just 29%. In effect, those in the middle have been making progress in absolute terms while falling behind in relative terms.
- As expenses have risen, middle-income Americans have taken on more debt, often borrowing against homes that, at least until recently, had been rising rapidly in value. The median debt-to-income ratio for middle-income adults increased from 0.45 in 1983 to 1.19 in 2004. Ratios have also increased for upper- and lower-income adults, but not by as much.
These findings -- combined with a recent New York Times poll in which 81 percent of respondents thought “things have pretty seriously gotten off on the wrong track” -- suggest historic levels of public pessimism about the nation's direction. After eight years of President George W. Bush, whom historians are already identifying as the nation's worst president, it's really no surprise.
Democrats should jump all over these trends, making the case that increased financial regulation, progressive taxation, and smart government spending can decrease the sickening inequality and slow growth of the bottom 99 percent of Americans. As we've noted before, Barack Obama's indictment of the political culture that led to the mortgage crisis is a good example of how to tie together the squeeze's disparate causes.
But messaging on this issue can be a little challenging, too.
(More after the jump ...)
As Matt Yglesias notes: "Politically, it's a bit tricky since the salient trend is the dramatic narrowing of the better/worse gap, but the betters still outnumber the worses." The recap of the report in the Sun-Times points to this issue as well:
On the upside, nearly two-thirds say they have exceeded their parents' standard of living. Most are confident that life will be better five years from now and most expect their children to do better in life than they have done.
I'd guess part of the discrepancy stems from the absolute gains families are making despite their slowing relative growth. The other factor is the massive amount of people who consider themselves middle class; the report shows that 53 percent of adults in the country define themselves as "middle class," with household incomes ranging from below $40,000 to more than $150,000. The views of those on the upper end likely skew the data as well.
Given these realities, the messaging may have to be more subtle in certain parts of the country. But it's clear that there's a populist mandate. Democrats should speak to this middle class insecurity and put economic justice on the table.
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