Helaine Olen has a really interesting piece in Forbes about a major change in how the public perceives itself.
In the past, the vast majority of Americans described themselves as middle class regardless if they made $20,000 per year or $200,000. When asked by pollsters what class they fit into, something like 90% of Americans would say that they were middle class.
In a recent poll by Pew, 1/3 of Americans said they were lower middle class or flat out lower class economic status, an increase of 25% since 2008.
Helaine and I were debating the cause of this shift in public opinion yesterday. She thought this shift was due to the reality that people are really struggling these days. It's hard to say you're middle class, when you qualify for food stamps.
I think that this shift is part of a growing populist movement in the country. Every speaker at both conventions trotted out stories about financial struggles. A grandmother who pushed a broom. The tiny childhood home. Tuna and pasta. Everybody wants to be in the 99%.
Does it matter how the public perceives itself? Isn't the most important thing that people are struggling, not what label they put on themselves? Well, perception helps shapes policies and shapes elections. Another recent poll finds that Southerns in particular are turned off by Romney's religion and his wealth. (link later) If Obama can craft a message that he's more likely to help the working class than Romney, then he'll have the election in the bag. It will be interesting to see how this develops.
Apt. 11d 
I totally agree with you, Laura. I think people used to be so embarrassed about doing poorly financially that they’d never admit it, even to themselves. People were “in the closet” about it because society viewed being poor as something that was totally self-inflicted. But recently, it has become more acceptable to admit that sometimes market forces cause a drop in socio-economic status. I think that’s why people today aren’t as afraid to admit that they’re not well off.
LikeLike
I think Olen is more right on this. You can picture yourself as middle class on a low salary only if you can afford health care and housing. The past ten years have seen a huge drop in the number of lower wage jobs that had health care coverage and a housing boom/bust that smacked the lower end of the middle class.
LikeLike
But recently, it has become more acceptable to admit that sometimes market forces cause a drop in socio-economic status.
It seems to me that it became acceptable only after it became impossible to borrow money to hide the drop.
LikeLike
Can’t it be both? I do agree with Olen that the shift in political affinity from the rich to the poor has a lot to do with the change in how people perceive their status as relative to others and not just because of a drop in income. I guess I hope the change is more due to a shift in political affinity because that is something that could last generations-and, generally, would be more likely to result in policies I support-while incomes changes are short-lived and can rise and fall in a matter of years.
LikeLike
Laura, thank you so much for posting this.
These are all fascinating comments, and I will probably have much to respond to later today when I can sit down and respond at leisure. I do want to say, however, I firmly agree with MH. There is a lot of evidence to show many of us used credit as a first defense against the greater economic trends, and only after that dried up did we even begin to grapple with our true economic status.
LikeLike
I think everyone is right (perception + reality of loss of what’s seen as basic middle class identifiers). I’d add a few others. First is risk. I think the feeling of risk is huge and that people are perceiving their lives as less stable even when they have the same amount of money, especially if that amount is just enough to live on now, and not to account for emergencies.
Also, I think people expect more out of life now than they did in the olden days of the middle class. I’m constantly amazed by the disconnect between the portrayal of the middle class, upper class, rich, and the amount of money it takes to sustain those levels of consumption.
LikeLike
I agree with BJ that risk is one of the big things. Not just because of overall trends but because that job that you got for life until you retired is not really out there any more. My parents made close to the same income (one of them) that we do on two, but my father was a tenured prof and never worried that he would be laid off. My husband and I both work in volatile industries and feel much less secure.
I think the cost of a lot of things has fallen relative to income – food, clothing – but it’s true that if you’re middle class and you can’t afford a cell phone, never mind a smart phone and an iPad, you feel out of step.
LikeLike
I agree with Helaine..
Pew Research says both real median income and net worth of the middle class have dropped over the last decade. That’s historically unusual, if not unprecedented.
The share of middle-income jobs in the United States has fallen from 52% in 1980 to 42% in 2010.
Middle-income jobs have been replaced by low-income jobs, which now make up 41% of total employment.
The Dept. of Commerce did a fine study in 2010. Obviously there is always a ‘middle class’ in terms of income distribution, but a better definition is by aspiration:
” Middle class families and those aspiring to be part of the middle class want economic stability, a home and a secure retirement. They want to protect their children’s health and send them to college. They also want to own cars and take family vacations.”
You can price what all of this is going to cost, and they did.. the price has been going up faster than inflation, and much faster than income. That means more people fall into the lower class.
LikeLike
There’s no doubt that over all incomes have dropped. I didn’t mean to imply that everything was just fine. I was just wondering why people have shifted their notions of their selves. In the past, even people who were objectively poor called themselves middle class. Even people getting food stamps called themselves middle class. Now, that’s not true. Why?
LikeLike
Now, that’s not true. Why?
Far fewer opportunities for upward mobility. College educations are priced out of what the average family can afford. College graduates are having a hard time finding jobs, and lack of a college education means having a permanently hard time finding a job that pays above poverty wages. People can’t “work their way up” anymore—a degree is the ticket for mobility, not work experience.
People are also pressed in ways they haven’t been in the past. Goods and services aren’t located in the heart of the city (or in small towns) anymore; you have to drive out to the suburbs (where you can’t afford to live) just to go to the grocery store. That takes more time and more money. Urban sprawl and isolation create a perception of hard times that is sometimes larger than the actual impact (I’m thinking how when I was my daughter’s age, the children of AFDC recipients, janitors, plumbers, teachers, business owners and physicians all attended the same middle school—and that mix was there for all three of that city’s middle schools. The schools in that city probably don’t have any business owners or physicians kids in the schools—they’ve moved elsewhere even if they still work in the city. Where I live now, the schools are highly stratified by neighborhood. My daughter gets free lunch because over 90% of the kids that go there qualify anyway—the district figures it’s not worth the paperwork.)
LikeLike
This is what I was driving at, too.
LikeLike
Wonder what role TV and culture play in these perceptions. I”m thinking of shows like Modern Family or Parenthood where everyone lives in an 800,000 dollar house in California, even the guy who’s a DJ. The families that have four kids on TV, the divorced guy who can apparently afford multiple wives and multiple families. And yet we’re supposed to assume that they are middle class. (Brings to mind the hysterically funny article in the real estate section of the NY TImes this weekend about ‘four just graduated students with BA’s looking for apartments in Manhattan.” One of the guys is going to be spending his time playing professional tennis and traveling, and he ends up paying something like a year’s rent on a 7,0000 dollar a MONTH apartment upfront (works out to almost 100,000 dollars.) Then in the comments you see that somebody googled him and he’s due to inherit the Avon cosmetics fortune. Yup, just a regular old middle class dude renting an apartment — just like you and me.
LikeLike