Are you shrinking along with the middle class?

Are you shrinking along with the middle class?The middle class may be shrinking, but the upper class is growing.(Photo: Ryan McVay, Getty Images)The declining middle class has become a major theme in this year’s presidential election. It’s a catch-all topic that touches on all sorts of problems that candidates like to hit, from jobs being lost to China to student loans, costly medical care and the nation’s falling rate of homeownership.So as the rhetoric intensifies, it’s important for voters to home in on what’s really being described. Pretty much everyone agrees that a large American middle class is a good thing. But there’s little consensus, even among experts, on how to define the middle class, let alone who falls into it.Household-income ranges are commonly used, but income alone doesn’t tell the full story. Some analysts have focused on net worth or attainment of college degrees. Others factor in access to health care or other benefits, including pensions.”Today, instead of poverty, public and scholarly concern revolves around the middle class,” wrote Steven Pressman in a 2015 report for the American Institute for  Economic Research. Unfortunately, he points out,   ”there is currently no single definition that social scientists accept, and no number that gets calculated and reported regularly.”USA TODAYSocial Security isn't broke: Sorting myths from truthsThe federal government is a vast cruncher of data on employment, inflation and many other economic statistics, but it doesn’t report a single monthly measure on the middle class.Research cited by Pressman suggests that the middle class has been shrinking in some nations but expanding in others. ”Since national results differ by so much … it would seem that institutional forces, unique to individual countries, play a big role,” he wrote.For example,  in Britain the middle class seems to have suffered when government benefits were cut in the 1970s and 1980s but revived in the 2000s after some benefits were restored.”National policies can make a difference,” Pressman wrote.One reason the plight of the middle class is receiving so much attention these days is that so many Americans still aren’t feeling especially prosperous. But is all that caused by financial pressures? Financial planner Jeremy Kisner of  Surevest Wealth Management in Phoenix doesn’t think so. He recently observed that many of his upscale clients don’t feel wealthy, while middle-class people often feel poor. Kisner thinks an explanation lies not so much in our finances but in how we assess other people’s displays of wealth.Studies have shown that the more time people spend on Facebook and other social media, the more depressed they become, Kisner said. “This is because people always post pictures of themselves having fun and looking their best. It is only natural to compare yourself to others and frequently, when people do that, they feel their lives are not quite as fabulous.”Plenty of Americans are obsessed with celebrities and displays of wealth, even if such portrayals aren’t always accurate. “Your neighbor is probably not doing much better than you,” Kisner said, ”and he’s definitely not having as much fun as his Facebook photos suggest.”Still, the U.S. middle class does seem to have shrunk. Pressman pegs the drop from a middle class that included nearly 60% of American households in the late 1970s to 51% by 2013.USA TODAYTurns out strategic mortgage defaults weren't really strategicBut it’s important to note that not all of those once-middle-class households went south. In its own report on the shrinking middle class, Pew Research found that the percentage of upper-income households has expanded faster than those at the bottom. Some 14% of Americans were included in the above-average income tiers back in 1971, compared with 25% in the lower groupings, according to Pew. Last year, the above-average tiers had grown to 20% and 29% at the bottom.The Pew research suggests that America’s income distributions might be broadening, rather than shifting to the pyramid shape that typifies Third World nations, with a small number of superwealthy individuals sitting atop a broad impoverished base at the bottom.”In at least (that) one sense, the shift represents progress,” the report said.Are you middle class?If you’re wondering about your own class status, check out a new calculator from Pew Research. You will need to input four variables — metro area and state where you live, your pretax household income and the number of people in the household. The online tool then determines whether you fall in the lower, middle or upper class for your area.Reach Wiles at [email protected] or 602-444-8616.

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