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General News    H2'ed 1/1/12

It's Official: Gov Stats Shows the Middle Class is Dead

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There was once a middle class in America, and if you were an average worker you were part of it, but not anymore.  

Peruse last year's government figures for the average American family's spending and debt.  The conclusion is dumbfounding: it's official, 2011 was the year the middle class died.  

Born 1950 - Died 2011: RIP
Born 1950 - Died 2011: RIP
(Image by Jimmy Zuma)
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Long live the "Lower Class"

To Americans, being middle class means two things:  more or less average wages that paid for life's necessities with cash leftover for discretionary spending. 

In a country where those from the marginally poor to the marginally rich claim to be in the middle, the US Bureau of Labor Statistics (BLS) set a factual standard: the Average American Consumer Unit.

The BLS's statistically computed family, with 2.5 humans and 1.3 workers, is a fictional construct.  But, it is also the one true benchmark that pinpoints the dead center of the American worker's economic situation.  

Beginning last year the average American family:  could not afford the average single family house... depended on their employer for health care insurance or went without... were in debt with no way out... didn't pursuing further education... saved nothing... slashed their food budget to the bone... and paid at least 30% of their gross wages in taxes.

Gender, age, religion, sexual preference and marital status are of no consequence to this financial analysis.  If you're human you can relate to these budget numbers.  

Any family earning today's average wage of $62,857 is very carefully spending every cent of their $49,067 take home pay and the details are disturbing. 

Much of the spending verified here is so deficient it will leave you baffled as to how today's average American family is getting by.  Remember, the option of taking on more debt, not calculated here, or declaring bankruptcy, may be the last resort.

Housing:   Goodbye house.  Hello walk-up flat or double wide trailer.

The new middle class housing is a two bedroom walk-up without the washer, dryer or dishwasher, or a double-wide trailer. The average single family home is now beyond the $1,400 monthly budget of today's average American family.

The fourteen hundred dollar number must include everything that goes with a place to live: rent or mortgage payment, taxes, insurance, utilities, telephone, public services, cable/dish, equipment, supplies and furnishings.

Fourteen hundred dollars will get you a two bedroom, average (not luxury) apartment, and leave enough for all your other average shelter costs, but only in smaller cities and towns where the Cost of Living Index (CLI) is at the national average: 100.

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Chaz Valenza is writer and small business owner in New Jersey. He earned his MBA from New York University's Stern School of Business. His current feature film project is "Single Point Failure" an insider's account of how the Reagan Administration (more...)
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