A shrinking middle class, in conjunction with a rising lower class, is making bankruptcy a more viable option for Americans who are struggling with financial debt. In fact, the U.S. middle class is now shockingly outnumbered by both the lower class and the upper class, according to a recent Pew Research Center report.
While many might assume that middle-class individuals who aspire to reach the upper class are finding ways to increase their incomes as the economy begins to rebound from a recession that lasted more than a decade, the reality is that more and more people are occupying the lower class these days. The Pew Report found that 70 million adults are part of the poorest group in the U.S., while just 51 million adults occupy the richest group. The total number of individuals on the extreme ends of the economic spectrum is 121 million, which is a figure slightly higher than the total number of middle-income adults.
More and more Americans now find themselves struggling to cover basic living expenses in a down economy. And things are getting worse. In 1971, more than 60 percent of U.S. households were considered middle income; that number is down below 50 percent today.
Moreover, the Pew Report took a fairly optimistic view of what classifies “middle class” in this country. For example, the researchers defined a family of three as “middle class” if the combined income of the household was just $41,000 annually. The unfortunate reality is that with wage increases barely keeping up with inflation and rent increases rising at an alarming rate, a family that earns just $41K per year may not be able to stay in the middle class much longer.
The Pew Report suggests something that many people already realize: income inequality is a major problem in the U.S. Since the start of the 1970s, the poorest U.S. households have gotten wage increases that pale in comparison to the pay raises for upper-income households.
Beyond that, income inequality is a particular problem for minorities in this country. The Pew Report found that blacks are the racial or ethnic group least likely to qualify as middle income, with just 45 percent of black adults occupying middle-class households. Meanwhile, white Americans are the only racial group in the U.S. with a majority in the middle class.
Regardless of race, however, just about everyone is finding it more difficult to get by financially these days. As the middle class loses numbers to a rising lower class, the U.S. economy is still struggling. This will likely continue because a large middle class is necessary to provide an “economic boost,” according to researchers who conducted the Pew study.
Anyone who has ever been faced with unmanageable debt knows how tough it can be to cover their bills and avoid doing permanent damage to their credit score. That’s why it is important to explore all available options, including bankruptcy, before making any final decisions about how to get back on the right financial track.
To learn more about the findings of the recent Pew study and the changing nature of the U.S. middle class, access the Yahoo.com article entitled, “Here’s How Much the U.S. Middle Class Has Changed in 45 Years.” https://finance.yahoo.com/news/heres-much-u-middle-class-120003442.html