2 out of 3 middle-class American families on shaky financial ground, according to new report

November 28, 2007

Waltham, MA--Fewer than one in three middle-class families in America is financially secure, and the remaining majority are either borderline or at high risk of falling out of the middle class altogether, according to a new study published this week by Demos and the Institute for Assets and Social Policy (IASP) at Brandeis University.

By a Thread: The New Experience of America's Middle Class is the first comprehensive report to measure economic stability across the American middle class. Based on national government data, By a Thread is the first in a series of reports and briefing papers that will utilize the new "Middle Class Security Index" developed by the non-partisan policy center Demos and IASP/Brandeis.

This Index measures the financial security of the middle class by rating household stability across five core economic factors: assets, educational achievement, housing costs, budget and healthcare. Based on how a family ranked in each of these factors, they were defined as financially "secure", "borderline" or "at risk".

"Much like a common cholesterol test that shows whether someone's cardiovascular health is at risk, the Middle Class Security Index shows that financial health eludes the majority of the American middle class," said Thomas M. Shapiro, Director of the Institute on Assets and Social Policy at Brandeis and one of the co-authors of the report. " It also points to specific areas--like lack of assets--that inhibit financial security,"

The Middle Class Security Index shows worrying trends: The participants of a press conference to launch the report commented on these findings:

"If we look back at the public investments of the mid-twentieth century--the GI Bill, federal home loan guarantees, better funding for public education and college--we see that they were geared at two key benchmarks on the way to the middle-class: assets and education," said Henry Cisneros, Chairman of CityView and former U.S. Secretary of Housing and Urban Development. "But the Middle Class Security Index provides a real measurement of where we are after years of seeing those investments whittled away. American families are at risk of falling out of the middle class and never getting back in, and many of those who were excluded from the initial public investment--Latinos and African Americans--are among those with the greatest vulnerability. It's time for a new public investment to stabilize the household economy and build the future middle class."

"The By a Thread report findings mirror a reality of today's unstable economy: The nation's mortgage lending crisis is threatening the fabric of the urban communities that we revitalized by providing economic opportunity for more than 30 years. The ramifications of foreclosures on property values, municipal costs, crime, and consumer credit extends beyond the middle class and the neighborhoods most widely impacted by irresponsible lending practices," said Jean Pogge, Executive Vice President, Consumer and Community Banking for ShoreBank.

"Workers in America are suffering a now generation-long stagnation of wages and rising insecurity," said Ron Blackwell, Chief Economist at AFL-CIO. "By a Thread provides a unique metric for the resulting stress on middle class living standards and outlines bold policies to create an economy that works for all."

The Middle Class Security Index findings reported in By a Thread spotlight the strengths and vulnerabilities of the middle class by identifying barriers to financial security and offering solutions that would enable the broad majority of American families to enjoy a stable middle-class life. The report recommends a set of policies that will help open access to, and strengthen, America's middle class. Legislative proposals cover a range of important issues affecting American households, including asset building and debt reduction, making higher education more accessible and affordable, and addressing the healthcare crisis.

"The Index is the launching point for a range of new work that will examine economic stability in America's middle class," said Jennifer Wheary, Senior Fellow at Demos and report co-author. "In the coming months we'll be adding new reports that illuminate middle- class stability by age, race and income--several of the key demographic factors that will inform future public policy investments."

The Middle Class Security Index will be updated biennially, with accompanying reports, as new national data become available.
-end-
A PDF version of By a Thread is available for download at demos.org or iasp.brandeis.edu. To order a hard copy or to arrange an interview with one of the authors, please see contact information above.

Brandeis University

Related Education Articles from Brightsurf:

Applying artificial intelligence to science education
A new review published in the Journal of Research in Science Teaching highlights the potential of machine learning--a subset of artificial intelligence--in science education.

Dementia education
School-based dementia education could deliver much needed empathy and understanding for older generations as new research from the University of South Australia shows it can significantly improve dementia knowledge and awareness among younger generations.

How can education researchers support education and public health and institutions during COVID-19?
As education researchers' ongoing work is interrupted by school closures, what can they do to support education and public health institutions dealing with the Covid-19 pandemic?

Online education platforms could scale high-quality STEM education for universities
Online and blended (online and in-person) STEM instruction can produce the same learning outcomes for students as traditional, in-person classes at a fraction of the cost, finds research published today in Science Advances.

Technology in higher education: learning with it instead of from it
Technology has shifted the way that professors teach students in higher education.

The new racial disparity in special education
Racial disparity in special education is growing, and it's more complex than previously thought.

Education may be key to a healthier, wealthier US
A first-of-its-kind study estimate the economic value of education for better health and longevity.

How education may stave off cognitive decline
Prefrontal brain regions linked to higher educational attainment are characterized by increased expression of genes involved in neurotransmission and immunity, finds a study of healthy older adults published in JNeurosci.

Does more education stem political violence?
In a study released online today in Review of Educational Research, a peer-reviewed journal of the American Educational Research Association, three Norwegian researchers attempt to bring clarity to this question by undertaking the first systematic examination of quantitative research on this topic.

Individual education programs not being used as intended in special education
Gone are the days when students with disabilities were placed in a separate classroom, or even in a completely different part of the school.

Read More: Education News and Education Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.