A new report by the Pew Research Center shows a full one third of Americans say their financial situation has resulted in their being in either the lower-middle or middle class. That’s a 25% increase over the past four years. The study included 2,508 adults.
That’s not all, though. The demographics have also shifted. Now, those under the age of thirty are coming to define their class as “lower-middle” or “lower” class – even those with college degrees. From a race perspective, more Hispanics and Caucasians than other races are dropping in class rankings by their own admissions. On the other hand, blacks are the one race that report no changes in their self-described class. Once the numbers are calculated, 33% of blacks and 31% of whites say they are in the “lower class”.
While it comes as no surprise for many, the report also paints a picture of the repercussions of a tough economy. In another report, many are saying they’re considering bankruptcy for the first time since the recession as credit card debt, mortgage payments and other personal loans are suffering due to those who are unemployed or have been forced to accept a lower paying job.
Many also report trying to keep up with their student loans, one specific area that analysts believe will prove to be burdensome in coming months and might likely play a significant role in the economy in 2013 and 17% of those who attended college believe they are now in the lower middle class. That number was 12% four years ago, a sign that more believe a college education is out of reach and even if it is, it doesn’t mean a better life in terms of career and earnings.
Those in the lower class were far more likely to have faced financial problems over the past twelve months and many report the inability to cover utilities and other payments. Most have had to cut back on spending and many say they have a medical need that they cannot afford to have treated at this time, whether it’s dental problems or other health concerns.
Tough Economic Times
The lower class, says the Pew report, has been hit hard. So much so that 84% of adults in the lower middle classes report spending cut backs in their homes. The reason was simple: tough economic times. Compared to the 62% of those in the middle class and 41% in upper classes, this is likely one report the Romney campaign doesn’t want to quote. Those in the lower classes not only are distrustful of political promises (and that number’s growing in the upper middle and higher classes), but they report they are less happy and less healthy than in previous years.
The stress they feel is unmatched by their counterparts who reported higher classes. Those in the lower class are negative not only about their current financial situations, but their future economic outlook as well. In fact, twice as many in the lower middle class feel this way as those in middle and upper classes. Not surprisingly , half of the lower class determined the economy as “poor” while 27% of those in middle class and 34% of those in the upper class share that same “poor” rating.
These numbers translate easily when it comes to retirement, as well. Those in the lower class – 58% of them – say they have “little or no confidence” that they will be able to retire with enough money to live on.
Perhaps the tragedy is found in the way those in lower classes see theirs and their childrens’ futures. More than three quarters say they had an easier time a decade ago regarding their finances and they also say they worry the future will be harder for their children than what they had as children themselves and even worse than the current environment. One half of the lower middle class said hard work is the key to success. What’s most interesting is the middle class – 67% of them, and the upper classes – 71% of those folks – also say hard work is what brings success. You can’t help but wonder what paths others have taken if they disagree that it’s hard work.
Another interesting finding comes with the differences in political affiliations. These days, conservatives and Republicans are more apt to say they are in the lower class than in 2008, even as Democrats still outnumber Republicans in placing themselves in lower classes. Twice the number of Republicans now believe they are in the lower class than four years ago – 24% in this latest research versus just 13% in the last poll four years ago.
Our question to our readers is: how do you define your financial situation? Are you one of the growing numbers who believe their financial classification has dropped over the past four years or are things improving? Let us know – visit our Facebook page or leave your comments below.
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