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Ralph da Costa Nunez, PhD Headshot

Notched-down Generation

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At a time when nearly 50 percent of Americans are either low-income or poor, members of the middle class are at risk of joining their ranks. The gradual erosion of household incomes, and decreased quality of life that many Americans have been experiencing over the past few decades, have been compounded by the Great Recession. Financial strain has created a downward pressure on families, effectively shrinking the middle class and crowding the bottom of the economic ladder. Across the country, people are reevaluating their goals and redefining the American Dream as they reconcile themselves to the likelihood that they will not be as comfortable as their parents' generation, and that their children will not be as well off as they are. Today's middle class has become America's notched-down generation, which is careening toward a lower standard of living and an uncertain economic future for their children.

For some families, notched-down means cutting back on entertainment, no longer eating in restaurants, clipping coupons or buying store brand groceries, skipping vacations, buying cheaper cars, and saving less money for the future. They pull their kids out of private schools with high price tags, and send them to public elementary or high schools instead. Rather than select private colleges or universities with prohibitive tuition fees, they send their graduating seniors to community colleges or public universities for a much lower cost.

For others, the events of recent years have had far more serious consequences. Parents who lost jobs have been forced to take on part-time work, or accept positions that pay poorly and have little opportunity for advancement. Too many have joined the growing ranks of the long-term unemployed, a group that now comprises 5.5 million Americans.

Though some middle-class families have fared better than others, few emerged from the Great Recession unscathed. Since 2000, poverty has risen by half (53%) in the suburbs, once an enclave of comfortable middle-class life.

Meanwhile, the median household brought home $49,445 before taxes in 2010, nearly $4,000 less than in 1999. Home values have continued to slide since the housing bubble burst, and are down 31.3% since the market high in 2006. About 30% of all homeowners with mortgages owe more than their houses are worth. Additionally, family health care costs have nearly doubled in the past decade, from $7,061 in 2001 to $15,073 in 2011; increasingly leaving families strapped and ill equipped to handle a financial disaster.

The sometimes-dire situations faced by middle-class families are in the news every day. Families who once owned homes worth half a million dollars in the Baltimore area are losing them, and couch surfing with family and friends, or even resorting to living in the woods. At a food pantry near Chicago, families who were once donors are now becoming customers, lining up for rations to supplement their food supplies. In Los Angeles, an unnamed movie producer who found box-office success watched his work dry up and eventually had to take his family to a shelter. Unable to find construction work for two years, Troy Renault, his wife, and their five children recently lost their three-bedroom house in Tennessee and now live in a donated trailer at a local campground. These families, like millions of others, will be feeling the effects of the Great Recession for years to come.

For middle-class parents, the idea that their children will benefit from their hard work has always been at the heart of the American Dream, but it is now in question. Social mobility -- the chance that a child will be significantly better off than his or her parents -- has been falling. One-third of Americans raised in the middle class will actually drop out of the middle as adults, according to a recent analysis by the Pew Charitable Trusts Economic Mobility Project.

For some middle-class families, reassessing goals and adjusting to a lower quality of life will be all that is required, but for others the future will be far bleaker. They will descend into poverty as they watch their jobs, homes, and savings disappear and they may even become homeless, which would have been unthinkable only a few years ago. Unless we get serious and do something about this notched-down generation, we may soon find ourselves living in a notched-down nation, and that would sadly be the beginning of the end of it all. Think about it.