CHICAGO (Reuters) – While there’s some comfort in a slowly improving U.S. economic climate, the majority of Americans are still trying to close a prosperity gap that has widened in the last ten years.
There is the painful realization that a combination of stagnating wages, job loss, recessions and depletion of wealth is morphing the middle class into a “muddled class” unable to keep up with the cost of living. This decline has been most pronounced over the past decade.
The most recent Census Bureau study showed that real median household income fell eight percent from 2007 through last year, and is almost nine percent lower than the 1999 level. Can families climb back? It’s possible, but not without some financial rigor.
As many analysts have noted, the early part of this century has been a lost decade for most of the middle class. Some income experts cite a “Gini Index,” which measures the disparity between higher and lower income groups. A zero means perfect equality between groups, and one is perfect inequality; meaning a huge gap between the lower and middle class and upper-tier earners.
Between 2010 and 2011, the Gini index increased 1.6 percent, to 0.477, the first time the measure showed an annual increase since 1993, the Census Bureau noted. Higher inequality translates into more losers than winners based on the sheer size of the middle class, echoing dozens of other reports showing that the top one percent of the population is reaping most of the benefits of economic growth and tax advantages.