By a Thread: The New Experience of America's Middle Class

Developed in collaboration with the Institute on Assets and Social Policy at Brandeis University, By a Thread: The New Experience of America's Middle Class looks at the financial security of the middle class using the innovative Middle Class Security Index, rating household stability across five core economic factors: assets, educational achievement, housing costs, budget and healthcare. The Index provides a comprehensive portrait of how well middle-class families are faring in each of these areas, with spotlight on the strengths and vulnerabilities of today's middle class

Child Care Expenses Make Middle-Class Incomes Hard to Reach

In this brief, authors Robert Paul Hartley, Marybeth Mattingly, and Christopher Wimer present estimates of the number of families that cannot maintain a middle-class income as a result of child care expenses. Estimates are based on 2013–2017 data from the Current Population Survey’s Annual Social and Economic Supplement, which corresponds to income and expenses during 2012–2016. They report that approximately 9 percent of working families with children under age 6 are pushed out of the middle class as a result of child care expenses. For working families with very young children (under age 3), 8 percent are pushed below the middle-class threshold. If all middle-class working families with young children were to pay what typical upper-middle and middle-class families pay for child care, roughly $6,900 per year on average, an additional 21 percent would be pushed below the middle-class threshold. They report that the current funding infrastructure for helping parents find and pay for affordable, quality child care is woefully inadequate. One way to support working families would be to increase funding for the Child Care and Development Fund, which is currently targeted toward families below the middle class

From Middle to Shaky Ground: The Economic Decline of America's Middle Class

A middle-class standard of living requires that families have adequate financial security to meet current obligations, invest in the future, and access opportunities. The most recent findings from the Middle Class Security Index show that between 2000 and 2006--even before the most recent economic downturn--the economic well-being of middle-class families slipped noticeably.Between 2000 and 2006 an estimated 4 million middle-class families lost their financial security, bringing the total number of middle-income families on shaky ground to 23 million.These worrisome changes in the overall financial health of the middle class were driven by a decline in assets, rising housing costs, and a growing lack of health insurance

Who Are the “Middle Class”?

There is no consensus definition of middle class, neither is there an official government definition. What constitutes the middle class is relative, subjective, and not easily defined. The mid-point in the distribution is the median, and in 2007 the median household income was $50,233. How far above and below that amount the middle stretches remains an open question. The U.S. Census Bureau has published figures for 2007 breaking the income distribution into quintiles, or fifths. The narrowest view of who might be considered middle class based on that presentation would include those in the middle quintile, which includes households with income between$39,100 and $62,000. A more generous definition might be based on the three middle quintiles, those households with income between$20,291 and $100,000. Surveys suggest that from 1$250,000. Similarly, survey responses suggest that the lower end of the middle class might be close to $40,000

Philadelphia's Changing Middle Class: After Decades of Decline, Prospects for Growth

The size of Philadelphia's middle class has essentially stabilized in the past decade after a period of prolonged decline, according to an analysis by the Pew Charitable Trusts of current and past data from the U.S. Census Bureau.In 2010, 42 percent of the city's adults qualified as members of the middle class, as defined by household income, virtually unchanged from 43 percent in 2000. Both of those figures are down substantially from 1970, when the middle class made up 59 percent of Philadelphia and the city had 400,000 more inhabitants than it does now.A vibrant and substantial middle class is widely considered essential for economic health and social stability in any community. The challenge for Philadelphia, operating in a climate of budget cutbacks and tax fatigue, is to maintain and grow its middle-class population without shortchanging the needs of lower-income residents. And in Philadelphia, those needs are vast

Is a Growing Middle Class Good for the Poor? Social Policy in a Time of Globalization

We examine the effect of the rise and evolution of the middle class on extreme poverty, using the World Bank's international poverty line of $1.90 per person per day in 2011 purchasing power parity (PPP)- adjusted terms. Like the definition of poverty, the definition of the middle class used here is also set in absolute terms, comprising households where per capita income or consumption lies between$11 and $110 per person per day in 2011 PPP terms—referred to as a "global," as opposed to national, definition of the middle class (Kharas, 2017). We argue that middle-class expansion initially is pro-poor given the incentives of the emerging middle class and the working poor to cooperate on matters of social policy. As citizens join the ranks of the middle class, they lobby for programs that provide them income stability and protections against shocks (social insurance). By allying with the working poor who seek social assistance (income transfers), middle-class constituents increase their bargaining power relative to elites who seek labor flexibility and lower taxes in a competitive global economy. Over time, however, as the middle class prospers and acquires greater political influence, the balance of programs shifts increasingly toward social insurance and away from social assistance. In this way, the middle class begins to capture an increasing proportion of the benefits of social spending, leaving less for welfare services targeted exclusively at the poorest. One implication of this is that the emerging middle class has never been truly progressive, because progressivity ultimately comes at its own expense

Consumption patterns and the black middle class: The role of assets

Black consumption patterns differ from those of whites, even when considering income levels and household size. This applies particularly to the black middle class, the subject of intense public interest. This paper postulates that this difference results not from cultural differences in taste for middle class goods, but from an asset deficit experienced by blacks. We test this hypothesis using regression analysis based on the 2000 Income and Expenditure Survey. Once assets are considered, consumption of middle class goods by blacks even exceeds those of whites. One would then expect blacks to exhibit, compared to whites, (i) an asset deficit, (ii) an asset preference in purchases (to reduce the deficit), and (iii) a lag in consuming other middle class goods (if the asset deficit is not considered). Descriptive evidence, mainly graphical, from the All Media and Products Survey (AMPS) of 2004 provides support for the main hypothesis. This implies that, for black accruals to the middle class, a stage of asset accumulation would precede a stage of middle class consumption. But once assets have been acquired, the shift in consumption may be quite rapid. There may therefore remain two distinct groups of black middle class consumers: The established middle class (currently still quite small), who have accumulated assets and whose consumption patterns therefore would resemble those of whites; and the new middle class, who may prefer spending to acquire assets.Market definition, Delineation, Quantitative, Stationarity tests, Prices, Geographic, SSNIP, Hypothetical monopolist, Competition, Unit root, Price ratio, Antitrust

Why Middle Class Americans Need Health Reform

[Excerpt] Middle class Americans across the country are demanding health reform. Businesses and families are struggling under the increasing financial burden of rising health care costs, and even middle class Americans with health insurance are struggling as their out of pocket health care costs continue to rise. Some employers are facing a decision between scaling back on coverage and laying off workers, and many—especially small businesses—are dropping coverage altogether. Middle class families often find themselves without adequate protection against a major illness and have difficulty obtaining the care they need, and an increasing number are now uninsured. Even among those able to get insurance through their job, middle class Americans are less likely to have a choice in their plan or provider compared to higher-income workers. This report highlights the struggles that middle class Americans face in the current health care system. By examining cost, coverage, access, and choice, this report shows how the current system has failed the middle class and why we must enact health reform this year

A reconsideration of what and who is middle class in South Africa

In this paper, we revisit 'what and who' is middle class in South Africa using data collected in the 2008 National Income Dynamics Study. First we consider how to identify the middle class based on two broad definitions adopted in the international literature: a middle class defined by the middle share of the national income distribution; and a middle class defined by an absolute level of affluence and lifestyle. We explore alternative ways of capturing the ‘middle strata’ of the national income distribution; and we suggest an approach for identifying threshold levels of income associated with middle-class affluence. Second, we show that both the size and the composition of the middle class in South Africa are very sensitive to how the middle class is defined. In particular, we demonstrate that there is very little overlap between the two broad definitions, a finding which reflects very high levels of poverty and inequality in the country. Lastly, both definitions of the middle class are shown to be robust to two common issues of measurement, namely the inclusion of implied rental income, and the use of expenditure as opposed to income as the basis for measuring class status.middle class; income strata; middle-class affluence; income distribution