The Disappearing Middle Class

Is the middle class disappearing? Today many people are dropping out of the middle class and falling down the rungs. It’s also getting harder and harder to move up the economic ladder. What does this mean to those who are just trying to weather the recession?

What is the middle class?

Today, most Americans identify themselves with the middle class. But being middle class is more than a economic indicator, it also is a lifestyle. Owning a home, one or more cars, saving for your children’s education and your retirement, and job security are all part of what makes up middle class life, or what is known as the American Dream.
The current concept of the middle class came into usage in America after WWII, when middle class became associated with middle income and blue-collar manufacturing jobs. Before that, many people in America worked agricultural jobs. Later, with the explosion of technology, the working class shrank as the white-collar workforce expanded.

Signs of a disappearing middle class

Recently, the middle class has been under attack. Many people who think of themselves as middle class have homes in foreclosure, have been laid off from their jobs and have depleted their life’s savings.
What has caused this assault on the middle class? One cause could be the decline of manufacturing jobs and the outsourcing and globalization that has been occurring on the white-collar front for some time now.
Another cause, experts say, may be the deregulation of the financial industry in the late 1970s and early 1980s, in which the roots of the current economic crisis appear. Deregulation meant that banks could give out unregulated loans, and Americans who had little savings could buy cars and homes with no money down for the first time. While Americans got deeper into debt, their wages stagnated and their jobs were sent to foreign countries.

The survival of the middle class

The American economy is dependent on the spending power of the middle class to a great extent. When that power disappears, so does the middle class and the American Dream of economic prosperity and giving your children a better life.
What does the future hold for the middle class? Nothing is certain, but until the gap between rich and poor begins to close up again, the middle class is becoming an endangered species.
If you are just trying to weather the recession, the best solution might be a proactive approach to your problems. That could include investigating ways to avoid foreclosure, cleaning up your credit, or finding a way to become a homeowner. Maybe the new American Dream will consist of a new quality of life: finding what is attainable and being satisfied with it.