The term “middle class” has an almost mythic quality in American politics, even though it’s extremely ill-defined. Some low-income Americans consider themselves middle class, while many of the affluent use the descriptor as well. The popularity of the term speaks to a general sense of equity among Americans, who believe the middle class represents the country’s “soul”.
One reason “middle class” is hard to define is because it’s a relative concept. The cost of living varies widely in different parts of the country, and what constitutes a “middle class” life changes from generation to generation. Averages are next to meaningless. A person making $40,000 in rural South Dakota will likely consider themselves middle class, and enjoy a reasonably high standard of living, while someone making the same salary in New York City or San Francisco would barely be able to get by.
That said, there is no doubt nowadays that what we consider a middle class lifestyle is becoming increasingly difficult to maintain. Median wages—by definition the middle of income distribution—have largely stagnated over the last decades, while the costs of healthcare and college education have risen significantly.
Besides rising costs, financial security is more precarious than before for the middle class. The days of defined benefit pensions are largely over; Americans need to save much more of their own money, and invest it wisely, if they want to retire in their mid-to-late 60s and maintain a similar standard of living. This at a time when the average American changes jobs every 4+ years as the days of the single career are effectively over.
By many metrics, the middle class is in worse shape today than at any time since the 1950s. Not all, of course, is grim. Life expectancy is up, and advances in medical technology are more widely available. Other technological advances have improved the quality of life in myriad ways for nearly everyone, e.g., the internet and cellphones. Most Americans can afford hi-tech electronic goods like laptops and flat-screen TVs, which not long ago were too expensive for all but the wealthy.
In addition, for many Americans the quality of something as basic as food has risen dramatically. When I was growing up on the Upper West Side of Manhattan in the 1970s, supermarkets were uniformly dreary and the selection paltry. The lone “health food” store had a small display case of wilted produce and offered little more than grains and vitamins. When I walk into a Whole Foods today, I am reminded (and astounded) at how affluent our tastes have become; we have high quality foods from the around the world that were beyond the reach of virtually everyone not that long ago.
All of this begs the question as to whether, on balance, the middle class is better off today—and what the future holds. Technology will continue to bring us new products that will improve our quality of life. At the same time, financial security will be increasingly hard to achieve for millions of middle class Americans. Individuals bear great risks in the modern economy, starting with 401k plans that shift the risk from employers to employees—not to mention global economic shocks, rapidly changing employment opportunities, and nasty, unexpected surprises like earthquakes, tsunamis, and nuclear calamities.
Some of these can be mitigated through public policy and social safety nets. But with the Republican Party bent on weakening or destroying those that already exist, this is going to be an extremely difficult challenge. Obama’s healthcare bill is a start, but it is unclear what its ultimate fate will be.
In order to enjoy the fruits of our potentially more prosperous age, the American middle class is going to have to be more nimble, more frugal when it counts, and more forward thinking—and take much better care of their physical health, to reduce future medical costs. Those who can’t or don’t adapt will likely find themselves working way longer than they had anticipated, and unable to leave much to their children and grandchildren.
Jason Scorse