WASHINGTON: A new report says the US middle class is facing its “worst decade in modern history,” with its share of the nation’s income falling for the first time since the Second World War.
The Pew Research Center study says 85 percent of middle-class Americans feel it is more difficult now than a decade ago to maintain their standard of living.
The report describes them as losing faith in the future.
Their share of the national income has been surpassed by affluent earners as median wages stagnate and wealth concentrates at the top in a relatively weak economy.
Roughly half of US adults define themselves as “middle class,” with incomes ranging from $ 39,000 to $ 118,000.
According to fresh, dire projections by the nonpartisan US Congressional Budget Office, a new recession is likely if a stalemate over tax and spending cuts continues between Democrats and Republicans,
In its annual summertime report, the budget office said that letting decade-old tax cuts expire and sweeping spending cuts occur in January — which will happen without congressional action — “would lead to economic conditions in 2013 that will probably be considered a recession.”
If that happened, the economy would contract by 0.5 percent — a gloomier projection than the budget office made earlier this year when it envisioned slight growth under that scenario.
Unemployment would rise to around 9 percent by late next year if the standoff persists, the analysts said, with budget office Director Douglas Elmendorf telling reporters that failing to resolve it would cost 2 million jobs.