WASHINGTON — The middle class is shrinking and is now barely a majority in the United States, underscoring the challenge President Barack Obama and Mitt Romney face as they argue over who can best protect the wealth of struggling Americans.
The proportion of middle-income earners, or those making from $39,000 to $118,000 for a family of three, narrowed as the housing-market crash erased two decades of gains in wealth since 2001 and average incomes fell for the first time since World War II, a Pew Research Center report shows. The middle class shrank to 51 percent of adults in 2011 from 61 percent in 1971.
“We think of ourselves and pride ourselves as being a middle-class society,” said Paul Taylor, the center’s executive vice president and the editor of the report, released Wednesday. “But there’s a sense that the middle class is getting smaller. It’s hollowing out.”
The past decade was a drain on middle-income earners, the Pew study shows. Median household income, adjusted for inflation and household size, dropped 6.6 percent to $59,127 in 2010 from $63,277 in 2000, according to the Washington-based center.
The median wealth of all U.S. families, adjusted for inflation, dropped 39 percent from 2007 to 2010, when it stood at $79,431, just 7 percent higher than it was in 1983, according to the Pew report.
For middle-income families, their median wealth increased 2 percent in 2010 from 1983. By comparison, the wealth of upper-income families jumped by 87 percent, the study shows.
The Pew study is based on an analysis of Census Bureau and Federal Reserve Board data, as well as a telephone survey of 2,508 adults from July 16-26, 1,287 of whom identified themselves as middle class. The poll has an overall margin of error of plus or minus 2.8 percentage points, and 3.9 percentage points for the middle-class segment.
Most who consider themselves middle class say it’s a struggle to maintain their standard of living. Eighty-five percent say it’s harder to do than it was a decade earlier, according to Pew. Tight finances led 62 percent to reduce spending in the past year, compared with 53 percent who said so in 2008, soon after the onset of the recession.