Middle Class in America

This report examines how two-parent two-child families and single-parent two-child families at different income levels might achieve a middle class lifestyle. The result is a snapshot of hypothetical family finances during a single year when both children are in school and before they start college. The estimates in this report present a picture of the possible spending and saving decisions that families might make. A major conclusion to be drawn from this report is that planning and saving are critical elements in attaining a middle class lifestyle for most families. Our results indicate how difficult it might be for many families to achieve these goals, particularly families in areas with higher housing prices. In addition, any number of uncontrollable events can make it hard to achieve middle class aspirations, including extra medical bills, payments for child care or elder care, or other demands on income. Families also face uncertainty about their future income, especially in an environment of high unemployment. Finally, we look back two decades to examine whether it is more or less difficult to attain a middle class lifestyle today. While incomes for married-couple and single-parent families with two children have increased significantly, much of this rise occurred in the 1990s. In part, these increases occurred because parents are working more hours in order to maintain higher income levels. Unfortunately, while incomes have risen, the prices for three large components of middle class expenses have increased faster than income: the cost of college, the cost of health care and the cost of a house. Thus, we conclude that it is harder to attain a middle class lifestyle now than it was in the recent past.