Below is a video of a speech Elizabeth Warren gave at the University of California about the stress on today's middle class families. She provides lots of interesting data, but what I found most compelling was her comparison of a middle class family of four (two parents, two kids) in 1970 and 2003:
- In 1970 most families had a single earner, in 2003 the vast majority were two-income families.
- Average incomes were up in 2003 compared to 1970 due to the second worker, but fixed expenses (mortgage, health care, taxes, child care, cars) were 50% in 1970 and rose to 75% in 2003.
- Discretionary expenses for items like clothes and food actually went down significantly between 1970 and 2003.
It's a long video (almost an hour), but it really is worth a look to see how much pressure is on the middle class these days. Even if you aren't a fan of Warren's it is still worth watching to get a sense of how things have changed in just one generation.
Last point I'll make is that this speech was given in 2007, before the economy tanked. I wonder how some of these numbers would look now.