The Middle Class Squeeze

According to a study by the Center for American Progress, the costs of critical elements of middle-class security such as child care, health care and housing rose by more than $10,000 from 2000 to 2012. Meanwhile, luxury goods such as computers, cars and smart phones have dropped in price due to outsourcing by manufacturers. This dramatic rise in cost of essential services, combined with stagnant middle-class incomes, has created a financial squeeze for many families.

Because the middle-class plays such a large role in creating consumer demand, the American economy suffers when middle-class families suffer financially. The median family saw its income shrink by 8 percent from 200o to 2012 while the cost of child care grew by about 37 percent and health care about 85 percent.

Economists agree that a financially healthy and growing middle class will result in a strong and growing economy. Click here to read the report’s recommendations on early childhood programs and policies.

 

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