The Pew Research Center has just confirmed what most of us stuck in the middle class have known for a decade – – the Great Recession hit the middle class the hardest and the middle class has still not recovered from it. Based on a new nationally representative survey conducted by Pew Research Center, “the middle class has shrunk in size, fallen backward in income and wealth, and shed some-but by no means all-of its characteristic faith in the future” since the beginning of 2000.
Middle class Americans are finding it much harder to maintain their lifestyle and point to several reasons why this is the case. As a bankruptcy paralegal, I can tell you that the middle class is still suffering, still searching for jobs and still trying to overcome the effects of the Great Recession.
The blame game – who does middle class America blame for their current financial ruin:
·62% blame Congress for the mess
·54% blame the banks
·47% say it is large corporations that are at fault
·44% lay the blame with the Bush administration
·34% say it is Obama’s administration that is at fault
·39% say that foreign competition is to blame
·8% just blame it on the middle class themselves
Some very revealing results from the Pew survey of middle class America:
·85% of middle class America says it is more difficult to maintain their standard of living than it was 10 years ago.
·Median net worth of the middle class fell from a record high of $152,950 to $93,150 in 2010.
·This low is only $2,000 more than the net worth of the middle class in 1983 (the middle class lost over 25 years of progress).
·Going forward, middle class America feels better about Obama’s policies over Romney’s (52% to 42%).
·Wealthy Americans far and beyond believe that Romney’s polices are better than Obama’s (71% to 38%).
·Poor people tend to agree with the middle class and prefer Obama’s policies to Romney’s policies (62% to 33%).
·42% of middle class America believe they are in worse shape now than before the recession began.
Sadly, only 43% of middle class America believe their children will be better off today compared to 51% in 2008 (26% believe their kids will have it worse – up from 19% holding that belief in 2008).
The depressing part, if there is only one depressing part, is that the above data is only a small portion (Chapter 1) of the data contained in the report. Reading the entire report casts a dark shadow across middle class America. It shows that the rich have gotten richer (or at least have not lost as much as the rest of us), the middle class is shrinking and the lower class is growing.
Without much hope on the horizon, what can those of us middle class do to survive?
1. Decrease tax withholdings – If you get a HUGE tax refund each year, consider lowering your tax withholding. It will put more money in your pocket now, help alleviate financial strain and keep the government from using your money interest free.
2. Part-time jobs – No one wants to work more and have less but you do what you have to do to survive. Look for part-time jobs that fit into your schedule and interfere as little as possible with your free time.
3. Give up name brands – Middle class America loves its brand name products because they make us feel “richer.” Give them up and opt for the less expensive store brands.
4. Circle the wagons – A century or two ago, churches and family members took care of those who were doing without. Gather family and friends to find ways to work together to save money – – i.e. carpools, potluck dinners, free babysitting, swap meets, bartering services, etc.
If all else fails, I guess we can all move to Canada.
Pew Research Center