Yes, they’re getting hammered. But how? Rising prices for things you use every day and stagnant or reduced wages, that’s how. And don’t forget, take home pay was reduced by 2% when social security taxes returned to their normal levels in January 2013. They were reduced in 2009 as part of an economic stimulus plan.
What prices have increased? Milk, up seventy cents per gallon over 2012; gasoline has risen again; this time up 20% in most areas, and even higher in others. According to an article on money.cnn.com, the median household income in America has fallen more than $4,000 since 2000.
Healthcare is rising for those that are lucky enough to have it. An article on time.com, showed that health insurance premiums for families increased 131% in decade between 1999 and 2009. In fact, a Kaiser Family Foundation survey found that premiums are rising three time faster than wages.
How can one keep up? The pressure on the middle class continues to build.
Hourly workers are finding the hours being cut, accompanied by increases in their share of healthcare costs.
The number of persons working part time because they cannot find full time work has increased to 8 million from 4.8 million five years ago.
And then there are home values. We don’t need to rehash the entire sordid story, but suffice to say that home values are almost 30% lower than they were in 2006. This has a major impact on the middle class on many fronts. First, with little or no equity, they are unable to borrow against the home for improvements or emergencies. Second, for most of the middle class, their home represents a great portion of what they plan for retirement. With values suppressed, retirement has to be put off. It also means that the net worth of the average middle class person just dropped by 1/3 to half or more.
Want more fuel for the fire? Between 1993 and 2011, the top 1% saw their income rise 58% while everyone else has risen just 6%.
The outlook doesn’t look particularly strong either. Without an American consensus that there is even a problem that it needs to be fixed, expect the problems of the middle class to remain.