Middle-class families in worse shape than ever, study finds: Knowledge Driven Revolution

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The typical double-income family is worse off financially than ever, a study released Thursday said, warning that few Americans have saved enough to brace for financial setbacks.

Middle-class families are struggling to pay for a home, health insurance, transportation and their children's college with wages that have not kept pace with higher prices, according to the study by a think tank headed by a former top aide to President Bill Clinton.

The middle class's financial condition has been a key issue ahead of the November elections, as Democrats warn that this group is fast losing economic ground amid skyrocketing prices and tax cuts that offer them little benefit.

"In our estimates, it's becoming harder for families to afford what we consider a typical middle-class lifestyle," said economist Christian Weller of the Center for American Progress, the political think tank headed by John Podesta, a former Clinton chief of staff.

Weller cautioned that while Americans are taking on more debt to cover higher costs, wages have not kept pace.

The majority of Americans have not socked away enough money to brace for financial setbacks such as a job loss or a medical emergency.

According to the study, less than a third of all American families have accumulated income equaling three months of their wages. The trend is particularly pronounced among the 60 percent income distribution that makes up the middle class: those with dual incomes earning from $18,500 to $88,030 a year.

From 2001 to 2004, the proportion of middle-class families that has saved three months' worth of income dropped to 18.3 percent from 28.8 percent, the study said.

Higher prices for a range of things - including health care, energy, transportation, food and education - have put Americans in this position as corporate profits have risen, the study said.

It said, that five years into the current economic recovery, average job growth is one-fifth that of previous business cycles and wages are flat when inflation is factored into the equation.

To maintain day-to-day consumption, families have taken on a record amount of debt, equal to 126.4 percent of disposable income in the first quarter of 2006, according to the study.

Commenting on the study, SEIU Labor Union President Andy Stern said, "Of the total amount of our economy and income, we have the greatest share going to profits in modern history and the least amount going to wages in modern history."

"For most working Americans, things are far worse than any time certainly in recent history and at a time of an incredibly growing economy." said Stern, whose union represents 1.1 million health care workers.

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HOME Canadians Should Pay NOT to be Poisoned: NDP V for Vendetta - R for Reality Canadian Bird Flu Pandemic Looming ? Shill of the Week: Stephan Harper Aspartame: The Sweetest Killer Chicken Little Terrorist of the Week: Creating Fake Terrorists Shill of the Week: Paul Martin The Number 1 Reason YOU became a Slave	Middle-class families in worse shape than ever, study finds Reuters October 02, 2006 Related - Britain becomes 'never, never land' as personal debt runs out of control Related - Canadians have 18 cents of debt for every dollar of net worth by end of Q2 The typical double-income family is worse off financially than ever, a study released Thursday said, warning that few Americans have saved enough to brace for financial setbacks. Middle-class families are struggling to pay for a home, health insurance, transportation and their children's college with wages that have not kept pace with higher prices, according to the study by a think tank headed by a former top aide to President Bill Clinton. The middle class's financial condition has been a key issue ahead of the November elections, as Democrats warn that this group is fast losing economic ground amid skyrocketing prices and tax cuts that offer them little benefit. "In our estimates, it's becoming harder for families to afford what we consider a typical middle-class lifestyle," said economist Christian Weller of the Center for American Progress, the political think tank headed by John Podesta, a former Clinton chief of staff. Weller cautioned that while Americans are taking on more debt to cover higher costs, wages have not kept pace. The majority of Americans have not socked away enough money to brace for financial setbacks such as a job loss or a medical emergency. According to the study, less than a third of all American families have accumulated income equaling three months of their wages. The trend is particularly pronounced among the 60 percent income distribution that makes up the middle class: those with dual incomes earning from $18,500 to $88,030 a year. From 2001 to 2004, the proportion of middle-class families that has saved three months' worth of income dropped to 18.3 percent from 28.8 percent, the study said. Higher prices for a range of things - including health care, energy, transportation, food and education - have put Americans in this position as corporate profits have risen, the study said. It said, that five years into the current economic recovery, average job growth is one-fifth that of previous business cycles and wages are flat when inflation is factored into the equation. To maintain day-to-day consumption, families have taken on a record amount of debt, equal to 126.4 percent of disposable income in the first quarter of 2006, according to the study. Commenting on the study, SEIU Labor Union President Andy Stern said, "Of the total amount of our economy and income, we have the greatest share going to profits in modern history and the least amount going to wages in modern history." "For most working Americans, things are far worse than any time certainly in recent history and at a time of an incredibly growing economy." said Stern, whose union represents 1.1 million health care workers. Read the full article here Broken Link? If the link to the original article is broken or has been altered you can view the article by clicking here. About KDR \| \| Home \| \| Weekly Features Archive	Weekly Features Archive
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