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Is the Middle Class Disappearing?

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Is the “middle class” passing into oblivion? Research from Northwestern Mutual indicates that many Americans think so, and others are skeptical about its future.

According to the newest findings from Northwestern Mutual’s 2018 Planning & Progress Study, 45% of Americans said the middle class was shrinking, while only 21% thought it was expanding. Moreover, 32% saw a time when the middle class disappeared completely. Twenty-four percent were uncertain of its future.

Sixty-eight percent of Americans in this year’s study classified themselves as middle class, down from 70% who said the same thing in 2017.

“The middle class is a cornerstone of our nation’s culture and identity,” Emily Holbrook, director of planning at Northwestern Mutual, said in a statement. “Clearly people are losing optimism in its longevity.”

These findings come from the 2018 study, an annual research project commissioned by Northwestern Mutual that explores Americans’ attitudes and behaviors toward money, financial decision making and broader issues affecting people’s long-term financial security.

The Harris Poll conducted an online survey in March among 2,003 Americans aged 18 or older in the general population. An oversample of 601 interviews with U.S. millennials was combined with the general population of those 18 to 34 when this age group was featured separately from the general population.

Why are Americans skeptical about the future of the middle class?

The new data show that 60% of survey respondents believe that movement into or out of the middle class is possible, but more expect that mobility to trend downward rather than up.

Thirty-nine percent of respondents said middle class to wealthy was the least likely type of mobility, and 33% said least likely was wealthy to middle class.

More likely, said 32%, was movement from middle class to poor, and 37% said movement from poor to middle class was most likely.

Thirty-five percent of younger millennials, those 18 to 24, anticipated transition from middle class to poor.

Makings of the Middle Class

Americans in the survey cited both personal attributes and asset levels as defining characteristics of the middle class. However, this year’s findings showed a significant shift in those who would define the middle class by a certain level of assets versus personal attributes — 88% vs. 65%, compared with 84% vs. 70% in 2017.

More than three-quarters of respondents said assets of less than $100,000 would qualify one as middle class. Just over half said the range was between $50,000 to $99,999, and a quarter said it was less than $50,000.

In terms of values, the data suggest that being a part of the middle class is less associated with personality traits such as humility and thriftiness, and much more with tangibles such as work ethic and homeownership.

The findings also uncovered gender differences among survey participants. Seventy-two percent of men considered themselves middle class, compared with 64% of women. In addition, 81% of men and 73% of women who were married or living with a partner called themselves middle class, versus 56% of single men and 54% of single women.

The study also examined financial habits and perspectives, finding the following differences between people who identified with being part of the middle class versus those outside it:

  • More likely to feel financially secure: 56% vs. 24%
  • Likelier to consider themselves highly disciplined or disciplined planners: 55% vs. 34%
  • More likely to feel confident that they can strike the right balance between spending now and saving for the future: 71% vs. 42%

“As assets increasingly become the barometer of middle-class status, it’s not surprising that some Americans have doubts about its future outlook,” Holbrook said. She noted that people were navigating high debt and savings shortfalls that could affect financial confidence, according to the research.

“However, as we see with today’s middle class, proactive planning is an anchor that can keep your financial situation stable and secure through economic fluctuations.”


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