Hoisted from Comments: Kaleberg: Material Well-Being in America since 1979--Muncie, IN: Live from teh Roasterie

Hoisted from Comments: Kaleberg: Comment on Material Well-Being in America since 1979: "If you want to compare living standards in the US over time...

...consider digging up some old copies of the Lynds' classics, Middletown, published in the 1920s, and Middletown Revisited, published in the 1930s. These help set a baseline of the old working class, business class and ruling class before and during the Great Depression in Muncie, Indiana. Then pick up a copy of Middletown Families, published in the 1970s, around the peak of the American middle class. Then take a look at Muncie, Indiana, or any similar town today. In the 1970s, economic progress was obvious. The working class and business class were hard to distinguish. Today, economic progress is much less obvious, and many things have moved backwards.

It would be interesting to see a study similar in spirit to the originals done today, in Muncie or elsewhere. (Granted, academic writing style has changes, so no modern study would be as readable and full of insight as the original studies.)"

Near Tanden: "As a follow-up to the discussion in our last EAC meeting...

...I wanted to send you a link to a new CAP report, The Middle Class Squeeze. Our research reveals that for an example middle class family of four, the costs of the pillars of middle class security went up by more than $10,000 from 2000 to 2012. In that same period, wages remained largely stagnant. You can also read about the report in this story from the Associated Press. I look forward to continue discussing the challenges to shared growth and other issues at our next EAC meeting...

Jennifer Erickson: The Middle-Class Squeeze: "While real incomes have been stagnant or declining in recent years...

...the other side of the story is the increase in the costs of various items that define a middle-class standard of living. Not only have families’ costs for things from higher education to health care increased rapidly relative to overall consumer inflation, but these costs are also consuming a growing share of family budgets, leaving less and less room for discretionary spending and saving.
When looking at the changes in consumer price indices for core elements of middle-class security, it is painfully easy to see the squeeze in action; prices for many cornerstones of middle-class security have risen dramatically at the same time that real incomes have fallen.

The median family saw its income fall by 8 percent between 2000 and 2012.... At the same time... the costs of key elements of security rose dramatically, including child care costs—which grew by 37 percent—and health care costs—both employee premiums and out-of-pocket costs—which grew by 85 percent. In fact, investing in the basic pillars of middle-class security—child care, housing, and health care, as well as setting aside modest savings for retirement and college—cost an alarming $10,600 more in 2012 than it did in 2000.... income was stagnant—rising by less than 1 percent—while basic pillars of middle-class security rose by more than 30 percent. As the cost of basic elements of middle-class security rose, the money available for everything else—from groceries to clothing to emergency savings—fell by $5,500....

The data paint a clear picture: The middle class is being squeezed. So it should come as no surprise that in a 2014 Pew Research Center survey, 57 percent of Americans responded that they think their incomes are falling behind the growing cost of living, up from 47 percent in 2006. In fact, the percentage of Americans who identify themselves as middle class has fallen to 44 percent, down from 53 percent in 2008.