mybudget360.com / June 11, 2012
Working and middle class families already feel the burden of a more limited financial middle in our economy. What was once taken for granted such as affordable quality college education, homes with moderate mortgages, and healthcare costs that didn’t put families on the verge of bankruptcy are now largely harder to come by. The Federal Reserve in their triennial Consumer Finance Survey (CFS) showed what most of us already know. The middle class has been crushed since this recession. The survey looks at data going back 18 months but the trend is unmistakable from 2007 to 2010. Middle class families were crushed as their number one asset in housing has plummeted while stocks which are largely consolidated in the top echelons of our wage earners had a stellar recovery since 2009. The median net worth of families fell a stunning 40 percent over this period.
From six digits to five digits
Wealth is a good measure of financial success. It shows the ability to earn but also to save in a variety of assets. For most Americans, housing is their number one net worth booster. Yet with the housing bubble popping thanks to financial de-regulation and incomes being crushed, most Americans have seen their number one asset plummet to the floor. In fact it drove the median net worth down by roughly 40 percent from six figures to five figures: