Study Shows Poor Economy Hitting Middle Class

Washington, DC, April 10, 2008-- Middle-class Americans are being weighed down by economic pressures amid growing personal debt, a study released Wednesday by the Pew Research Center found.

The survey of households with incomes ranging from below $40,000 to more than $100,000, shows that many Americans believe they are worse off than they were five years ago.

Twenty-five percent said their economic situation had not improved, while 31 percent said they had fallen backward. Those numbers together are the highest since the survey question was first asked in 1964.

Asked about their financial experiences in the past year, 53 percent of middle-class people said they had to cut spending because money was tight and 10 percent said they had been laid off or otherwise lost their jobs.

Half of the middle class surveyed said they expected to have to cut more spending in the next year.

Middle-class prosperity overall also fell behind compared with wealthier Americans. From 1983 to 2004, the median net worth of upper-income families -- defined as households with annual incomes above 150 percent of the median -- grew by 123 percent, while the median net worth of middle-income families rose by just 29 percent.

"It's been a lousy run for the American economy and people feel it," said Paul Taylor, director of Pew's Social & Demographic Trends project and lead author of the study. He noted that people's pessimism largely tracks annual median household income, which has seen little gain in recent years.