The Wall Street Journal Agrees on the Middle-Class Squeeze
The Wall Street Journal Finds Trouble for the Middle Class
We know working Americans are in trouble. Today, a new report from the Wall Street Journal shows more evidence of the problem. The central pillars of a middle-class life are slipping away as their costs rise rapidly and incomes stagnate.
Here are a few of the key findings.
- Spending by the middle class “rose by about 2.3% over the six-year period from 2007, even as inflation totaled about 12%. At the same time, income for the group stagnated, rising less than half a percent.”
- While incomes have stagnated, employees paid 40% more for health insurance in 2013 than 2007. This is part of the reason why the Affordable Care Act is so essential, as a CAP study last year found that price competition on the health insurance exchanges would reduce premiums and save $190 billion over the next 10 years.
- And the cost of staying connected with the world has skyrocketed. Paying for cell phones cost almost 50% more while internet access costs 81.3% more. As one family put it, “Because the [cell phone] bill is so expensive, and because it changes month to month, you have to cut back.”
The Wall Street Journal’s findings mirror our own at CAP from our recent report, “The Middle-Class Squeeze.” WSJ and CAP measured the middle class differently, but both found that middle-class income has stagnated while rising middle-class costs have made life more difficult. From 2000 to 2012, CAP found that middle-class household income grew by less than 1 percent, but the cost of middle class essentials like child care, higher education, health care, housing and retirement increased by an estimated $10,600. Meanwhile, the wealthiest Americans have seen wealth accumulate further to the top.
BOTTOM LINE: The Wall Street Journal has keyed in to what we’ve been seeing for a while now: the middle class is in a bind. The essentials to a middle class life and basic 21st century needs like internet access have grown more costly and the middle class has had to stretch meager incomes to keep pace. We need to promote better policies to promote more equitable growth, create good jobs and cut costs for the essentials to build and strengthen our middle class.