A new poll finds that the majority of middle-class Americans are experiencing economic hardship and expect it to continue for the rest of their lives.
According to a survey released by the National Cost of Living Coalition, 65% of Americans who earn more than 200% of the national poverty line (about $62,300 for a family of four, often considered middle class) say they are struggling financially.
Respondents included high school graduates and graduate school graduates, as well as blue- and white-collar workers in rural and urban America.
Many of these people say they can afford to cover the most basic expenses, but express concern that they will not be able to save for the future.
Interestingly, about 40% of Americans say they are unable to plan for life beyond their next paycheck, and an additional 46% say they don’t have $500 saved for emergencies.
“Despite the strength of the economy, many Americans are still struggling financially,” said Jennifer Jones Austin, CEO of the Alliance of Protestant Welfare Agencies and co-chair of the National Cost of Living Coalition. “They can’t afford to plan beyond their current needs.”
By many measures, the economy is healthy: The labor market remains strong but growing at a moderate pace, with employers adding 175,000 new workers in April.
Job openings remain high and the unemployment rate has remained below 4% for more than two consecutive years.
But Americans are also struggling with the highest interest rates in two decades and chronically high inflation that has dramatically increased the costs of basic necessities like groceries, rent and gasoline.
While inflation is down significantly from a peak of 9.1% recorded in June 2022, it remains above the Federal Reserve’s 2% target. Prices are also up 17.6% compared to January 2021, just before the inflation crisis began.
Many families have yet to receive any material relief. Food prices have risen more than 21% since the start of 2021, and housing costs have risen 18.37%, according to FOX Business calculations. Meanwhile, energy prices have increased 38.4%.
Rising prices are especially devastating for lower-income Americans, who tend to spend more of their already tight paychecks on necessities and therefore have less flexibility to save.
With inflation still high, the typical American household had to pay $227 more per month in March to buy the same goods and services as a year ago.
Americans are paying an average of $784 more each month than they did at the same time two years ago, and $1,069 more than they did three years ago.
As Americans spend more on everyday items, more are dipping into their savings and turning to credit cards to cover basic expenses.
The latest survey results come amid growing pessimism about the financial situation of U.S. households under President Biden.
According to a recent Gallup poll, Americans are less optimistic about the state of the U.S. economy than they have been in recent months, with only 38% of voters trusting Biden to propose and implement the right policies for the economy.
By comparison, in 2020, about 47% of respondents said they trusted former President Trump to do the right thing for the economy.
“Biden’s poor economic performance could have a major impact on the election because not only does it have the lowest economic rating of any president seeking reelection since Gallup began polling in 2001, but independents also trust his opponent more than they trust Biden,” Gallup said.
