America's Middle Class Families Still Losing Ground

Middle class economic security is taking an ever harder hit as economic conditions worsen, according to a new report from the Center for American Progress.

Some highlights:

* The sharpest deterioration in middle-class financial security is associated ƒ with the cost of a medical emergency. We estimate that only 33.9 percent of families had enough wealth in 2007 to cover the cost of a medical emergency, down from 35.0 percent in 2005 and 43.7 percent in 2000 (See table on page 3). This deterioration comes as a result of less wealth and higher costs of medical emergencies.

* Drops in personal wealth have contributed to the decline in middle-class ƒ financial security. Because house prices started to fall and debt continued to rise in 2007, we also observed the share of families who could weather an unspecified emergency equal to three months of income decrease to 29.4 percent in 2007, from 30.5 percent in 2005 and 39.4 percent in 2000.

* The share of families who had ƒ enough resources to cover a spell of unemployment has declined since 2000. In 2007, 44.1 percent of families had enough wealth to cover a spell of unemployment, little changed from 44.0 percent in 2005 but still down from 51.0 percent in 2000. Unfortunately, the 2007 data likely reflect only a temporary respite from decline since the labor market has substantially deteriorated in 2008, beyond the time series data presented here.

Read the full report here (PDF).

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