The middle class has always been the heart of our society—they’re the group that bridges the gap between the wealthy & the poor, working hard to achieve the American dream. But lately, things haven’t been going so well for them, with lots of middle-income families finding it harder to get by. Here are twelve reasons the middle class is disappearing that don’t simply involve bad luck. Hopefully, we’re able to reverse fortunes and stop the shrink!
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Stuck Between No Aid and High Costs
Middle-class families often make too much money to get help from the government but not enough to handle the rising costs of living—so they don’t qualify for assistance programs that lower-income families may use. But that’s not all because as prices go up, middle-class families also don’t receive any of the tax breaks of the ultra-rich. They’re stuck between a rock and a hard place.
Prices Rising Faster Than Pay
Likewise, the cost of essentials like food, housing & utilities keeps going up—but middle-class wages aren’t increasing much so their money doesn’t go as far as it used to. Many middle-class families simply can’t afford the lifestyle they once did because their salaries no longer scale the same way. As such, they’re being squeezed out of their comfortable lifestyle to something far less satisfying.
Property Taxes Weighing Them Down
Property taxes have increased significantly in many modest neighborhoods and this means that middle-class homeowners aren’t doing so great—they can’t easily handle these higher taxes like wealthier people can. Sometimes, the extra cost means they have to sell their homes & move to less expensive places. It’s enough to disrupt their lives entirely and this makes it even harder for them to claw their way back up to wealth.
Childcare Costs Straining Budgets
Many middle-class parents are struggling to pay for childcare since they usually don’t get help from government subsidies that assist lower-income families. They can’t manage the high fees as easily as wealthier families are able to, meaning that covering the costs of daycare or after-school programs takes up a big part of their earnings. It’s much harder for them to pay for other necessities this way.
Full-Price Healthcare Hurting Wallets
Middle-class folks often make just enough money that they don’t qualify for healthcare subsidies and so they have to pay the full price for insurance premiums—we all know how expensive these are! Unlike lower-income people who get help from the government, middle-class families have to handle all the costs themselves, including out-of-pocket expenses. As such, any unexpected sickness puts a big strain on their finances that they’re unable to recover from.
Elite Education Out of Reach
Middle-class students find it hard to get into top schools because these institutions tend to favor students who can pay full tuition or those who qualify for substantial financial aid. Middle-class families don’t have the wealth to pay the high fees & they may not qualify for enough aid, so they’re often barred from the best educational opportunities. They must either take on huge amounts of debt or avoid college entirely—neither of which seem like fair choices.
Struggling to Save for Retirement
Many middle-class workers don’t have retirement plans through their jobs nor do they make enough money to save on their own, which is quite a challenge. Unlike in the past, pensions are rarer these days and without the extra money that wealthy people may invest, they’re not building up enough for their retirement years. Lots of middle-class people are worried about their future financial security as well as their current situation.
Automation Taking Over Middle-Class Jobs
Employers are automating a lot of the jobs that middle-class workers rely on, with machines & software replacing roles in administration, manufacturing—even some professional fields. As a result, fewer job opportunities pay well enough to keep people in the middle class. It’s making it harder for people to find work that supports their families.
Rising Interest Rates Hitting Homeowners
Increases in interest rates affect middle-class homeowners with adjustable-rate mortgages as it makes their monthly payments go up—they might not have had the option for fixed-rate loans. They’re also unable to pay off their homes quickly like wealthier people and any higher payments strain their budgets. It becomes harder to afford other expenses, creating more financial pressure on middle-class families.
Missing Out on Investments
You need a good amount of money upfront to make investments, like buying property or stocks, but middle-class people usually don’t have extra cash lying around to invest. Wealthier individuals are able to put money into these opportunities and grow their wealth yet the middle class misses out. They have far fewer chances to increase their assets over time—instead, they have to find other ways to make money that may not be as lucrative.
Losing Job Benefits
Many middle-class workers have noticed that their job benefits have shrunk because employers have cut back on things like health insurance & paid time off to save money. These cuts affect middle-class employees the most because they rely on these benefits as part of their total compensation. Losing these benefits hurts their financial and personal security by quite a bit.
Fewer Unions to Support Workers
Likewise, unions used to help secure fair wages and benefits for workers but union membership has declined significantly over the years. Middle-class employees don’t have this collective bargaining power and this gives them less leverage to negotiate salaries or working conditions. Unfortunately, many of them have to accept lower pay & less job security.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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