Tuesday, March 5, 2013
Obama's America: In the wake of the Great Recession, millions of middle-class people are being pinched by stagnating incomes and the increased cost of living
America's median household income is dropping and the typical trappings of middle-class life are slipping out of financial reach for many families. Families with young kids are struggling to afford childcare and save for the ever-climbing costs of college. Those nearing retirement are scrambling to sock away funds so they don't have to work forever. A weak labor market means that employed Americans aren't getting the pay raises they need to keep up. Economists say that it boils down to two core problems: jobs and wages. The traditional "middle-class job" is disappearing. Mid-wage occupations such as office managers and truck drivers accounted for 60% of the job losses during the recession, but only 22% of the gains during the recovery, according to a National Employment Law Project analysis of Labor Department data. Low-wage positions, on the other hand, soared 58%. Uncertainty and insecurity are weighing down the middle class, even those who haven't had a break in employment. More than 40% of those surveyed in a recent Rutgers University study said that they were very concerned about job security. They're also not very optimistic about the near future. Fewer than one-third believe that economic conditions will improve in 2014, and an equal number think that they will get worse, according to the Rutgers survey, conducted by the university's Heldrich Center for Workforce Development. Only 19% believe that job, career and employment opportunities will be better for the next generation. Full-time employment is one casualty of the recession. The number of people working part-time for economic reasons - meaning that they would like longer hours but can't find work - has soared to nearly 8 million, up from 4.8 million five years ago. Those with full-time jobs are also feeling the pressure. The mortgage crisis hollowed out the middle class. Much of their wealth is tied into home values, but national home prices are still 29% below their mid-2006 high. That means some folks have lost all their home equity and may never get it back. Others can't take out loans to finance repairs, college for the kids and other expenses. Economists say that they don't expect much improvement for the middle class any time soon. The recession is officially over, but the recovery is fragile.