|By PATRICIA COHEN|
It’s not only what you have, but how you feel.
When it comes to membership in the middle class, earnings and assets are just part of the definition. Nearly nine out of 10 people consider themselves middle class, as a recent survey by the
“Middle income is not necessarily the same thing as middle class,” said
That’s because the middle-class label is as much about aspirations among Americans as it is about economics. But a perspective that was once characterized by comfort and optimism has increasingly been overlaid with stress and anxiety.
Part of the reason has to do with lost jobs and stagnating incomes. At the same time, the psychological frame — how Americans feel about their security and prospects — and the sociological — how they stack up in relation to their parents, friends, neighbors and colleagues — are just as important as purely economic criteria. And on both these counts, middle-class Americans say they are feeling increasingly vulnerable.
“There is a very big difference between the psychological self-definition of class and anything approaching a useful economic definition of class,” said
And that’s the political challenge for Democrats and Republicans looking to inspire voters with policies to address what
Middle-class anxiety has been driven by several factors: increasing instability in incomes, a sense among many Americans that they are failing to keep up with the gains of previous generations, and an increasing gap between themselves and the very rich.
A recent report from economists at the Federal Reserve Bank of
The study, conducted by
Money, of course, provides the wherewithal for acquiring what are considered the traditional bedrocks of a middle-class life: adequate health care, college for the children and retirement savings, generally with a car and a regular summer vacation thrown in.
Some version of that basket can be bought across a range of incomes, depending on location. It might include a used Pontiac instead of a late-model Lexus, or a small walk-up instead of a house with a backyard. And even though consumption was once a useful shorthand guide to a middle-class lifestyle, it is no longer as reliable in a world where cellphones and flat-screen TVs are staples in a majority of households below the poverty line and retirement savings, even among top earners, are often treated as a luxury.
There isn’t one middle class, but many middle classes. Still, what all of them ultimately require, experts say, is a sense of economic security.
“If there’s no security, there’s no middle class,” said
That feeling of security has been eroded by several factors.
Median per capita income has basically been flat since 2000, adjusted for inflation. The typical American family makes slightly less than a typical family did 15 years ago. And while many goods have become cheaper or better, the price of three of the biggest middle-class expenditures – housing, college and health care – have gone up much faster than the rate of inflation.
Similarly, nearly 80 percent will at least temporarily plunge into a red zone, where their income drops near or below the poverty line, or they are compelled to gain access to a social safety net program like food stamps or collect unemployment insurance. More than half of Americans ages 25 to 60 will experience at least one year hovering around the poverty line.
For most people, their 20s and 30s have traditionally been the least secure decades, with earning power building to a peak in their 40s and 50s,
And compared with the mid-’90s, a smaller share of Americans now say they believe it is possible to start out poor, work hard and get rich, the classic tale captured by the American dream.
Income volatility has given many people both a taste of life in an upper-income bracket and a bracing slap of instability.
“Income fluidity is a double-edged sword, creating opportunity for many, along with insecurity that this opportunity may end sooner than hoped for,”
What is particularly surprising about the increasing income volatility since the 1970s, said
“There was a big increase in the number of people who saw big drops in their income,”
That psychological lens helps explain rising middle-class anxiety. What about the social frame? Here, increasing inequality has helped undermine middle-class security and optimism.
Economists and other researchers have repeatedly found that the satisfaction a paycheck brings is related not only to its size, but how it compares to other people’s. That verity is apparently more pointed for middle-income households than for those at the lower and higher end of the spectrum.
A review of the latest studies on the middle class by the
Yet in the last 15 years, nearly all of the gains in income have streamed toward the upper end of the spectrum.
The feeling of comparative deprivation and the ultrarich separating themselves from the rest of society helps explain why only 1 percent of Americans accept the rich or upper-income label. Even most people earning over
“The gap between you and them is much bigger than it used to be,”
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