November 29, 2007 – The ability of families to enter and remain in the middle class is quickly disappearing, according to a new report examining the economic strength of the middle class. By a Thread: The New Experience of America’s Middle Class, prepared by the nonpartisan Demos and Brandeis University, found just 31 percent of families who are considered middle class by their income level are financially secure and one in four middle class families are at high risk of falling out of the middle class.
“The cost of a standard middle-class life—a home, healthcare, a college education—has soared in recent years, outpacing growth in incomes. As a result of these changes, it is becoming increasingly difficult for Americans to enter and remain in the middle class,” the report states.
By a Thread also found almost 80 percent of families earning a middle class income don’t have enough assets to survive for just three months if their income was to drop off or disappear, more than half of middle class families have no net financial assets and roughly one in four middle class families have a member without health insurance.
In order to strengthen the middle class, the report recommends simultaneously building assets and reducing debt, making post-secondary education more accessible and affordable and addressing skyrocketing health care costs. By a Thread used five core economic factor to measure the financial strength of middle class families: assets, education, housing costs, budget and health care.