The Squeezing Of America's Middle Class

New Book Examines How The Middle Class Is Finding It Harder To Stay Afloat

(CBS)  The idea of a thriving middle class has always been at the heart of the American dream. The concept really took off in the wake of World War II, when the GI Bill started helping everyday Americans pay for college or vocational education and take out loans to buy homes.

By the 1950s, TV shows like "Leave It to Beaver" were presenting an idealized picture of middle-class life. Dad worked, Mom took care of the kids, and there wasn't much talk about how they'd pay the bills.

But today the American middle class is struggling.

"It seems as if health care, retirement security, being able to pay for kids' college, being able to hold on to and afford a home are real sources of anxiety for middle-class Americans today," Jacob Hacker, a professor of political science at Yale University, told Sunday Morning correspondent Rita Braver.

Hacker, an author of a new book that focuses on problems facing America's middle class, says the middle class is more of a symbol than a concrete definition.

"I think the symbol is people who are not rich, who have to work hard, usually both parents are working," he said. "They probably have children, that's sort of the image that we have. It's a hard-working middle-class family with kids, making $60,000 to $80,000 a year and feeling really strained economically."

Case in point: Jan and Karen Seidler of Youngstown, Ohio:

Together, the Seidlers make about $80,000 a year before taxes. It's a second marriage for both and they have four kids. Two sons are still in college, which costs the family $45,000 a year. The Seidlers pay for the boys' living expenses but both sons are taking out loans for tuition. Karen Seidler said her parents could afford to send her to college but she is having trouble paying for her children's education.

"I can't, and especially having two at the same time, it's impossible to pay for both of their tuitions and then keep up with all the other bills," she said.

Her job as a respiratory therapist at a local hospital does provide some occasional raises.

"But the 3 percent that we received in September was, between the groceries going up and our health care out-of-pocket costs [going up], we’re not really getting ahead," she said.

And like many other Americans, the Seidlers recently faced a downturn in earnings. Jan Seidler now runs the Youngstown Community Improvement Corporation. But he landed his current job only last year, after losing his previous position as a sales director at a hospital. He was unemployed for seven months. They dipped into their savings and now worry what will happen if there's another emergency.

All across the country, middle class Americans are beginning to wonder whether they'll ever have the kind of economic security they thought hard work would bring them. A major reason is that the middle class share of the American Pie has shrunk in recent years.

As executive compensation skyrocketed from 2003 to 2004, the average after-tax income for the richest 1 percent of U.S. households went up almost 20 percent, while after-tax incomes for the middle fifth of the nation — the middle of the middle class — went up only 3.6 percent.

Looking back 25 years — starting in 1979 — the contrast is even greater. The top one percent saw a whopping 176 percent jump, while the middle fifth of Americans saw only a 21 percent rise. That's a big difference, but although 21 percent still seems high, Hacker says it's not high enough.

"We know that the cost of healthcare over that period has quadrupled or gotten even bigger than that," he said. "We know that the cost of housing has gone way up. We know that the cost of college tuition has gone through the roof. The fact is that being middle class means spending a lot more money than it used to. But people don't have a whole lot more money to spend then they used to."

Democrats in Congress have focused on the middle class squeeze. In the Democrats' State of the Union response, Senator Jim Webb of Virginia said the middle class is "losing its place at the table."

The middle class squeeze is a becoming a rallying cry for Democrats on the presidential campaign trail:

"And as our economy changes, let's be the generation that ensures our nation's workers are sharing in our prosperity," Sen. Barack Obama (D-Ill.) said when addressing a crowd.

"The leadership here in Washington seems to ignore the middle class and hardworking families across our country," Sen. Hilary Clinton (D-NY) said in a speech.

In fact a new study shows that in 2005, the top 10 percent of Americans collected almost half of all reported income in this country. This is their biggest share since 1928.

Nonetheless, some scholars say that middle class Americans still have plenty to cheer about.

[billpaying1]

eilonwyhan---You said it EXACTLY right! The generation before us didn't have credit card debt. They could afford the house (only ONE mortgage), 2 cars, 2 kids with NO credit card debt, on a SINGLE income.

'Mom' actually cooked dinners (sometimes even breakfast), took care of her own little kids (& the house), because she didn't have a job outside of the home.

[billpaying1]

eilonwyhan---You said it EXACTLY right! The generation before us didn't have credit card debt. They could afford the house (only ONE mortgage), 2 cars, 2 kids with NO credit card debt, on a SINGLE income.

'Mom' actually cooked dinners (sometimes even breakfast), took care of her own little kids (& the house), because she didn't have a job outside of the home.

[eilonwyhan]

A HUGE ommission from this story: the fact that most American middle class families have astronomical credit card debt. I am outraged at the so-called expert who said that we must be doing all right since we're going out and buying i-Pods. That's because we've been brainwashed, by CBS advertisers no less, into thinking we need such things, and we have maxed out our credit cards to get them. Personally, I have student loans, two mortgages and credit card debt out the wazoo that I mostly used for food and clothes for work (ok a few fun things, too!). The cost of gasoline almost makes driving to work and school six days a week prohibitive. My out of pocket healthcare costs are through the roof, and I'm not even sick! That expert sounds like a puppet to me.

[sagamorebear]

"It%u2019s time to look and sit there and say, you know, 'Is the middle class really, really that bad off?'" said Rea Hederman, a senior policy analyst with the Heritage Foundation. "And I think, you know, some of the data with home ownership, the access to amenities such as DVD players and iPods, the consumption level, the things that the American middle class is able to afford and buy, I think indicates that maybe they're not as bad off as we think."

Please be honest enough to let viewers who may not know that the Heritage Foundation is a right wing think tank that is responsible for most of the republican legislation that has created the "squeeze" on the middle class. Their "senior policy analysts" should be labeled as the partisan hacks they are.

[sagamorebear]

"It%u2019s time to look and sit there and say, you know, 'Is the middle class really, really that bad off?'" said Rea Hederman, a senior policy analyst with the Heritage Foundation. "And I think, you know, some of the data with home ownership, the access to amenities such as DVD players and iPods, the consumption level, the things that the American middle class is able to afford and buy, I think indicates that maybe they're not as bad off as we think."

Please be honest enough to let viewers who may not know that the Heritage Foundation is a right wing think tank that is responsible for most of the republican legislation that has created the "squeeze" on the middle class. Their "senior policy analysts" should be labeled as the partisan hacks they are.

[eilonwyhan]

A HUGE ommission from this story: the fact that most American middle class families have astronomical credit card debt. I am outraged at the so-called expert who said that we must be doing all right since we're going out and buying i-Pods. That's because we've been brainwashed, by CBS advertisers no less, into thinking we need such things, and we have maxed out our credit cards to get them. Personally, I have student loans, two mortgages and credit card debt out the wazoo that I mostly used for food and clothes for work (ok a few fun things, too!). The cost of gasoline almost makes driving to work and school six days a week prohibitive. My out of pocket healthcare costs are through the roof, and I'm not even sick! That expert sounds like a puppet to me.

[taxmom2]

We the middle class have to depend on ourselves for everything. We have to plan for our own retirement - we can't depend on our employers or the government. Our children are denied financial aid because we make too much money. We have to pay for our own health insurance because our employers won't and we don't qualify for Medicaid. We have to pay for homeowner's insurance because we don't expect the government to pay to fix our house when a hurricane comes through. I have no qualms at all with the rich. The majority worked hard and became successful and I commend them for it. Middle class people don't expect handouts from the government and don't depend on the government to survive, but yet the middle class are the ones who are paying for those who do live off the government and do nothing for themselves.

[honeyb34]

i cant say that i feel sorry for these people. they sound like they have it really bad. why dont they come to southern ohio and try to survive on $20,000.00 or less a year and try to pay the same things they say they are paying now. as far as gas,food,housing,medical ect. most people here would'nt know how to act to make $60-$80,000.00 a year!

[irvin10000]

Poor people have more access to the American Dream of an Ivy League education, and the trappings normally afforded to the 'manor-born' than middle class families, just because they are poor.

Flaunt a good 'I'm so poor' story and you get all kinds of social benefits.

There are few, if any, such programs for the middle class.

The middle class has pay for the tax breaks given to the rich, as well as pay for the government benefits given to the poor. Additionally, because most poor people cannot afford the products and services offered by many socially responsible corporations, the middle also pays for thees programs with their patronage.

The middle class is definitely in a squeeze.

[itgranny]

Hederman and the republicans have their head in the sand.

It used to be that health care was reasonable and all but substantial hospital stays could be paid for immediately from your wallet. Most jobs were within a few miles, none of this driving 50 miles one way to get to work. Vocational education was free and the limiting factor for a child getting a college education was grades, not money, even for lower middle incomers like myself. For us, our kids are in Iraq,dodging morter rounds, IED's and suicide bombers to pay for their education (and to make the Bushies and their like wealthier yet).

While we may have dvd players and cell phones and ipods, how much different are these items from yester-year's newspapers, books, radios and record players. They're just making excuses for the mess they're greed has gotten us into.

[itgranny]

Hederman and the republicans have their head in the sand.

It used to be that health care was reasonable and all but substantial hospital stays could be paid for immediately from your wallet. Most jobs were within a few miles, none of this driving 50 miles one way to get to work. Vocational education was free and the limiting factor for a child getting a college education was grades, not money, even for lower middle incomers like myself. For us, our kids are in Iraq,dodging morter rounds, IED's and suicide bombers to pay for their education (and to make the Bushies and their like wealthier yet).

While we may have dvd players and cell phones and ipods, how much different are these items from yester-year's newspapers, books, radios and record players. They're just making excuses for the mess they're greed has gotten us into.

[itgranny]

Hederman and the republicans have their head in the sand.

It used to be that health care was reasonable and all but substantial hospital stays could be paid for immediately from your wallet. Most jobs were within a few miles, none of this driving 50 miles one way to get to work. Vocational education was free and the limiting factor for a child getting a college education was grades, not money, even for lower middle incomers like myself. For us, our kids are in Iraq,dodging morter rounds, IED's and suicide bombers to pay for their education (and to make the Bushies and their like wealthier yet).

While we may have dvd players and cell phones and ipods, how much different are these items from yester-year's newspapers, books, radios and record players. They're just making excuses for the mess they're greed has gotten us into.

[itgranny]

Hederman and the republicans have their head in the sand.

It used to be that health care was reasonable and all but substantial hospital stays could be paid for immediately from your wallet. Most jobs were within a few miles, none of this driving 50 miles one way to get to work. Vocational education was free and the limiting factor for a child getting a college education was grades, not money, even for lower middle incomers like myself. For us, our kids are in Iraq,dodging morter rounds, IED's and suicide bombers to pay for their education (and to make the Bushies and their like wealthier yet).

While we may have dvd players and cell phones and ipods, how much different are these items from yester-year's newspapers, books, radios and record players. They're just making excuses for the mess they're greed has gotten us into.

[itgranny]

Hederman and the republicans have their head in the sand.

It used to be that health care was reasonable and all but substantial hospital stays could be paid for immediately. Most jobs were within a few miles, none of this driving 50 miles one way to get to work. Vocational education was free and the limiting factor for a child getting a college education was grades, not money, even for lower middle incomers like myself. For us, our kids are in Iraq,dodging morter rounds, IED's and suicide bombers to pay for their education (and to make the Bushies and their like wealthier yet).

While we may have dvd players and cell phones and ipods, how much different are these items from yester-year's newspapers, books, radios and record players. They're just making excuses for the mess they're greed has gotten us into.

[mdk2dude]

Getting squeezed? You dont know what squeezed is. We had three sons and our pay was $108 a week working 6 days a week I took a Sunday and evening job to get a car. I went to the junk yard for a $15 junker to go to work. It had to have current plates as we could not afford any. We were middle class. We were able to buy a 3 bedroom. $16000 home. We used the GI Bill. I had served in the Navy during the Korean and Viet Nam wars. That is what made it possible for our standard of living. We could not afford lawn seed but if I did have money for a lawn we couldnt afford water. We werent living in Arkansas or Mississippi but in Los Angeles.I made $5508 annually and we were middle class. That was in 1956. We made steady progress and were able to improve our lot but we never thought we had it tough just a challenge we needed to overcome. The same challenge our sons took on. They are middle class. Their children got married and they are struggling but didnt we all? The middle class today is better off than it ever was. The only thing that we have today is more whiners and how bad they are having it. Believe that lie and someone will agree with you. Believe that you are like most Americans and will have to struggle for everything. You will be proud of what you accomplished. We are a strong middle class in America and getting stronger.

[mdk2dude]

Getting squeezed? You dont know what squeezed is. We had three sons and our pay was $108 a week working 6 days a week I took a Sunday and evening job to get a car. I went to the junk yard for a $15 junker to go to work. It had to have current plates as we could not afford any. We were middle class. We were able to buy a 3 bedroom. $16000 home. We used the GI Bill. I had served in the Navy during the Korean and VietNam wars. That is what made it possible for our standard of living. We could not afford lawn seed. if I did have money for a lawn we couldnt afford water. We werent living in Arkansas or Mississippi but in Los Angeles.I made $5508 annually and we were middle class. That was in 1956. We made steady progress and were able to improve our lot but we never thought we had it tough just a challenge we needed to overcome. The same challenge our sons took on. They are middle class. Their children got married and they are struggling but didnt we all? The middle class today is better off than it ever was. The only thing that we have today is more whiners and how bad they are having it. Believe that lie and someone will agree with you. Believe that you are like most Americans and will have to struggle for everything. you will be proud of what you can accomplish. We are a strong middle class in America.

[mdk2dude]

Getting squeezed? You dont know what squeezed is. We had three sons and my pay was $108 a week working 6 days a week I took a Sunday and evening job to get a car. I went to the junk yard for a $15 junker to go to work. It had to have current plates as we could not afford any. We were middle class. We were able to buy a 3 bedroom. $16000 home. We used the GI Bill. I had served in the Navy during the Korean and VietNam wars. That is what made it possible for our standard of living. We could not afford lawn seed. if I did have money for a lawn we couldnt afford water. We werent living in Arkansas or Mississippi but in Los Angeles.I made $5508 annually We were middle class. That was in 1956. We made steady progress and were able to improve our lot but we never thought we had it tough just a challenge we needed to overcome. The same challenge our sons took on. They are middle class. Their children got married and they are struggling but didnt we all? The middle class today is better off than it ever was. The only thing that we have today is more whiners on how bad they are having it. Beleive that lie and someone will agree with you. Beleive that you are like most Americans and will have to struggle for everything you will be proud of what you can accomplish. We are a strong middle class in America.

[mamelville]

Your story on the "Squeezing of the Middle Class" was well told. It appears we have been getting squeezed for the past 25 years and little was done to stop it. Here we are in 2007. I now want to hear what is going to be done about this. While the richest 1% rest on their laurels of financial security, priviledge, entitlement, elite higher education - I want to know where the majority of us fit in to the scheme of things and why we are systematically left behind by our government and the decisions made at our expense to benefit the few.

[eilonwyhan]

There was a huge omission from this piece: the fact that most middle class American families are in debt. I am outraged at the expert who said that we must be doing ok, everyone's going out and buying ipods. That's because we've been brainwashed into thinking that we need them, by CBS advertisers no less, and using credit cards to buy past our means. Personally, I have student loans, two mortgages and credit card debt out the wazoo. My healthcare costs, out of pocket, are skyrocketing, and I'm not even sick! The cost of gasoline to go to my full-time job and classes are almost prohibitive. That so-called expert sounds like a puppet to me.

[eilonwyhan]

There was a huge omission from this piece: the fact that most middle class American families are in debt. I am outraged at the expert who said that we must be doing ok, everyone's going out and buying ipods. That's because we've been brainwashed into thinking that we need them, by CBS advertisers no less, and using credit cards to buy past our means. Personally, I have student loans, two mortgages and credit card debt out the wazoo. My healthcare costs, out of pocket, are skyrocketing, and I'm not even sick! The cost of gasoline to go to my full-time job and classes are almost prohibitive. That so-called expert sounds like a puppet to me.