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Why America's middle class is losing ground
March 5th, 2013
10:29 AM ET

Why America's middle class is losing ground

By Tami Luhby @CNNMoney

(CNNMoney) - When Debbie Bruister buys a gallon of milk at her local Kroger supermarket, she pays $3.69, up 70 cents from what she paid last year.

Getting to the store costs more, too. Gas in Corinth, Miss., her hometown, costs $3.51 a gallon now, compared to less than three bucks in 2012. That really hurts, considering her husband's 112-mile daily round-trip commute to his job as a pharmacist.

Bruister, a mother of four, received a $1,160 raise this school year at her job as an eighth-grade computer teacher. The extra cash - about $97 a month, before taxes and other deductions - isn't enough for her and her husband to keep up with their rising costs, especially after the elimination of the payroll tax break. Its loss shrunk their paychecks by more than $270 a month.

"If you look at how much prices are going up, you get in the hole really quick," Bruister said. "It's a constant squeeze."

In the wake of the Great Recession, millions of middle-class people are being pinched by stagnating incomes and the increased cost of living. America's median household income has dropped by more than $4,000 since 2000, after adjusting for inflation, and the typical trappings of middle-class life are slipping out of financial reach for many families.

Families with young kids are struggling to afford childcare and save for the ever-climbing costs of college. Those nearing retirement are scrambling to sock away funds so they don't have to work forever. A weak labor market means that employed Americans aren't getting the pay raises they need to keep up - especially with big-ticket items such as health care eating away at their paychecks.

Economists say it boils down to two core problems: jobs and wages. The traditional "middle-class job" is disappearing.

 

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soundoff (One Response)
  1. Jason

    So what's the news?

    March 5, 2013 at 11:30 am | Report abuse |