The Disappearing Middle Class

Came across this video on YouTube that had been highlighted on Dan Ariely's blog on behavioral economics. Thought it was really interesting.  





In many ways, I think my generation is probably the last to have a legitimate chance to aspire to a true middle class. Ann and I were both public school teachers. We enjoyed what we did and felt we made a difference to our students. Because of that, we passed on the chance to get rich. But we did expect (and were able) to make a decent living, buy a house, provide for our kids, and have a comfortable retirement. The next generation is finding that a more difficult task. The amount of money available to the middle class is significantly smaller than it was thirty years ago and a much larger number of people are going to be in that lower middle class where home ownership may be a stretch. It will be much harder to make the kind of living that we took for granted. And it is taking longer for them to reach the stage where they can be truly independent. I talked to a mom today whose daughter is 27 and living at home because she can't get a job that would allow her to be on her own. Notice I didn't say "Can't get a job." She has what we would have considered a good job: assistant editor at a local newspaper. Unfortunately, it pays $27,000 a year. Even with a roommate, rent and utilities would take 35 to 40 % of her take-home pay. That wouldn't leave a lot to pay for groceries, car and insurance (needed to work in the suburbs), health insurance (not fully included in her job) and other essentials, let alone save for buying a house. So I worry about where our kids and their kids are going to end up in thirty years.