The well-respected Pew Research Center confirmed what the average American already knew, that the middle class is getting financially thinner. Calling it the "lost decade," the PRC pulled data from the U.S. Census Bureau looking for adults who self-labeled themselves as "middle class." It studied 1,287 Americans for 10 years beginning in 2000. The results: 85 percent of "middle class" Americans find it more difficult to "maintain their standard of living."
The PRC's researchers used official government date, like the census, to identify the statistical middle of America. The median income of this group dropped 5 percent but the median wealth fell by 28 percent. Who is to blame for this reversal of fortune? Pollsters report that there is plenty of blame to go around. Congress received the largest share of blame with 62 percent but 8 percent blame themselves. Presidential administrations Bush and Obama were also blamed in the poll.
Unlike previous generations, the current middle class is less hopeful concerning their children's financial future. The study says, "As for their children's economic future, some 43% of those in the middle class expect that their children's standard of living will be better than their own, while 26% think it will be worse and 21% think it will be about the same. Four years ago, in response to the same question, the middle class had higher hopes for their offspring, with 51% predicting they would have a better standard of living and 19% thinking it would be worse." The most hopeful group are people aged 18 to 24 and those in minority groups. The income range for this research was $39,418 to $118,255.
The middle class money shift has many individuals and families looking for ways to cut costs. Money-saving websites like FrugalDad suggest a return to frugality. Adopting a coupon lifestyle, bargain shopping for big ticket items, and saying "no" to the kids are good ways to get started. These families must avoid using credit to make ends meet. Doing so will create a debt snowball that will be hard to reverse.
USA Today recommends that families get out of credit card debt altogether and shedding the load in other ways too, if necessary. Selling a second car, moving into a smaller home and cutting back on monthly bills can also decrease overall debt.