Report: Middle-class income, wealth shrink
Middle-class Americans have seen their income and wealth drop over the past decade, their share of the population shrink, and have shed some "but by no means all" of their faith in the future, according to findings in a new report by the Pew Research Center.
According to the report, released Wednesday, the middle-income tier of Americans included 51 percent of all adults in 2011, down from 61 percent in 1971. It said middle-income Americans had moved into economic tiers both above and below the middle, "with slightly more moving into the upper tier."
The report noted that while the nation's median income had peaks and valleys over the decades, it has generally trended upward since 1970. The median household income in 2010, -- $59,127 -- was about the same as 1997 -- $59,194. Both income values were adjusted for inflation using 2011 dollars, the report said.
For middle-income Americans, the Pew report found, the median income fell 5 percent and their wealth dropped by 28 percent over the past decade.
"This is the first decade in modern history where the median household income hasn't returned to an earlier peak," said Paul Taylor, a co-author of "The Lost Decade of the Middle Class" report, in a conference call with reporters Wednesday. "We think the strength of this report is it takes a very deep look at the middle class using two different research tools."
He said the report's findings were based on a nationally representative survey conducted last month of about 2,500 people, about half of whom identified themselves as middle class, as well as a "deep dive into census data and Federal Reserve Board data" on income and wealth.
It is more difficult in 2012 than 10 years ago to maintain their standard of living, according to 85 percent of those who identified themselves as middle class. Of those, 62 percent said "a lot" of the blame falls on Congress.
Irwin Kellner, chief economist for MarketWatch, who praised the Pew report as "very on the mark," said that view of Congress had "implications for policymakers, especially here on Long Island," saying it could make it hard for incumbents to get re-elected.
Another message for policymakers, Kellner said, was "they have to hold the line on taxes."
The report found that young adults, blacks and Hispanics -- all of the whom "fared the worst during the recession" -- nevertheless were more optimistic about their future.
Seventy-eight percent of black middle class respondents were hopeful as were 67 percent of Hispanics and 48 percent of white. Younger age groups showed higher levels of optimism: 67 percent among the 18- to 24-year-olds, versus 52 percent for those 50 and older.
These groups are mostly Democrats and backers of President Barack Obama, the report said.
Those racial and age optimism views "jumped off the page to me," said Michael Zweig, an economics professor at Stony Brook University and director of its Center for Study of Working Class Life, noting minorities and young people have fared worse than whites during the recession.
"What I'm thinking about is . . . that white people are not used to the degree of suffering that they've experienced so they're very pessimistic, having less experience with it," Zweig said.