America’s middle class: New study suggests it’s shrinking

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The American middle class is shrinking. That’s the conclusion of a new study from the Russell Sage Foundation and Brown University out this week.

According to the study, based on four decades of Census figures, the portion of Americans living in neighborhoods dominated by those who are poor and those who are rich have doubled, said Sean Reardon, one of the study’s authors. That could mean major changes for how American communities develop and thrive.

“Higher income families who have more resources to invest in their communities and invest on behalf of their kids, it’s more likely their investments will only benefit the children from higher income families,” he said. “That risks increasing inequality even more and making the American Dream less and less possible,” Reardon said.

Judy Meister, a recruiter at college in Pittsburg, Kan., said before the recession, she felt like she was squarely in the middle class. But, now, she’s not so sure where she’s wound up.

“I feel the pressure of a change in our finances,” she said. “It doesn’t buy as much as it did three or four years ago.”

Meister said that the change in middle class may not be as pronounced as in the bigger cities, but the tightening of finances is certainly something she and her friends are talking about in Pittsburg, a small town located more than 100 miles south of Kansas City.

Jane Kolodinsky, chair of the community development and applied economics department at the University of Vermont, said that the decline in the middle class will have major ripple effects across the economy in general.

“Our country was built on the growing middle class and their disposable incomes and their ability to purchases goods and services in the marketplace,” she said. “You have to have disposable income to be able to spend it.”

Kolodinsky, who’s not optimistic about America’s ability to reverse this trend, said that for the United States to have a chance to recover, it needs to bring jobs back onshore. She suggested tax breaks to help accomplish that.

Meister, who’s a bit more optimistic, isn’t so sure government can help reverse this trend.

“I think we do pull ourselves up by our bootstraps and find a way out of this,” she said.

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