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Americans see middle class status slipping

By CHRISTOPHER RUGABER Associated Press

WASHINGTON  - A sense of belonging to the middle class occupies a cherished place in America. It conjures images of self-sufficient people with stable jobs and pleasant homes working toward prosperity.

Yet nearly five years after the Great Recession ended, more people are coming to the painful realization that they're no longer part of it.

They are former professionals now stocking shelves at grocery stores, retirees struggling with rising costs and people working part-time jobs but desperate for full-time pay. Such setbacks have emerged in economic statistics for several years. Now they're affecting how Americans think of themselves.

Since 2008, the number of people who call themselves middle class has fallen by nearly a fifth, according to a survey in January by the Pew Research Center, from 53 percent to 44 percent. Forty percent now identify as either lower-middle or lower class compared with just 25 percent in February 2008.

According to Gallup, the percentage of Americans who say they're middle or upper-middle class fell 8 points between 2008 and 2012, to 55 percent.

And the most recent General Social Survey, conducted by NORC at the University of Chicago, found that the vast proportion of Americans who call themselves middle or working class, though still high at 88 percent, is the lowest in the survey's 40-year history. It's fallen 4 percentage points since the recession began in 2007.

The trend reflects a widening gap between the richest Americans and everyone else, one that's emerged gradually over decades and accelerated with the Great Recession. The difference between the income earned by the wealthiest 5 percent of Americans and by a median-income household has risen 24 percent in 30 years, according to the Census Bureau.

Whether or not people see themselves as middle class, there's no agreed-upon definition of the term. In part, it's a state of mind. Incomes or lifestyles that feel middle class in Kansas can feel far different in Connecticut. People with substantial incomes often identify as middle class if they live in urban centers with costly food, housing and transportation.

In any case, individuals and families who feel they've slipped from the middle class are likely to spend and borrow less. Such a pullback, in turn, squeezes the economy, which is fueled mainly by consumer spending.

"How they think is reflected in how they act," said Richard Morin, a senior editor at the Pew Research Center.

People are generally slow to acknowledge downward mobility. Many regard themselves as middle class even if their incomes fall well above or below the average. Researchers say the rise in Americans who feel they've slipped below the middle class suggests something deeply rooted.

Americans' self-perception coincides with data documenting a shrinking middle class: The percentage of households with income within 50 percent of the median - one way to define a broad middle class - fell from 50 percent in 1970 to 42 percent in 2010.

The Pew survey didn't ask respondents to specify their income. Still, Pew has found in the past that people who call themselves middle class generally fit the broad definitions that economists use.

Home ownership is among factors economists cite as markers of middle-class status. Others include being able to vacation, help children pay for college and save for a secure retirement.

Yet stagnant middle-class pay, combined with steep price increases for college, health care and homes, have made those expenses harder to afford. Median household income, adjusted for inflation, hasn't budged since 1996, according to the Census Bureau. Average college tuition has soared 174 percent in that time.

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