Five years after the financial crisis and Great Recession, America's middle class is shrinking. Former professionals are working manual labor, retirees are struggling to meet rising costs, and people seeking full-time jobs are settling for part time. New research suggests that these financial setbacks are affecting how Americans perceive themselves.
Since 2008, the number of people who cast themselves as middle class has fallen by nearly one-fifth, from 53 percent to 44 percent, according to a survey by the Pew Research Center. About 40 percent now identify as lower-middle class or lower class, compared to 25 percent in February 2008. A Gallup poll estimates that the share of Americans who consider themselves middle or upper-middle class fell eight points between 2008 and 2012, to 55 percent. The most recent General Social Survey by NORC at the University of Chicago found that 88 percent of Americans call themselves middle or working class, the lowest in the poll’s 40-year history.
The statistics suggest a widening gap between rich Americans and everyone else since the recession. The difference between the income of the wealthiest 5 percent of Americans and a median-income household has increased 24 percent in 30 years, Census data shows. The percentage of households with income within 50 percent of the median fell from 50 percent in 1970 to 42 percent in 2010.
The term "middle class" has no specific definition but is partly a state of mind that can vary by region. Individuals and families who believe they have slipped down from the middle class are more likely to spend and borrow less. People usually are slow to acknowledge downward mobility and may regard themselves as middle class even if their incomes are far above or below the average. Stagnant middle-class pay -- combined with higher prices for college, healthcare, and homes -- have made traditionally middle-class expenses more difficult to afford. This may have made some people feel that they have fallen out of the middle class even with stable incomes.