As the 2024 presidential campaign winds down to election day, the topic of the economy and whether we’re all “better off” than we were four years ago, continues to be a cornerstone.
Economic stability and opportunity have been a foundation of the American middle class, and as we all know, since 2020 our economy has stumbled, corrected and the annual inflation rate for the United States has landed 2.4% for the 12 months ending September, according to U.S. Labor Department data published on October 10, 2024.
That’s a much-improved economic sign compared to a high of 8% inflation in 2022; however, for many casting their votes in this election, they’re not feeling it. One reason for much skepticism among American voters is the dramatic change in what now constitutes middle class.
In 2024, the middle-class income range in the U.S. has varied significantly depending on the cost of living, with household incomes spanning from around $57,000 to $170,000 nationally, and more dramatically in areas like Sunnyvale, California, where the middle-class range stretches from $113,000 to $340,000. Meanwhile, in lower-cost cities like Detroit, middle-class incomes fall between $24,000 and $73,000. In Oklahoma to be middle class range on the low side is $39,778 and on the high side the salary is $119,346.
While nominal incomes have risen over the years, the real purchasing power of these wages has lagged behind due to inflation and escalating living costs, putting middle-class Americans under considerable financial strain.
It’s called the Middle-Class Squeeze, and over the past decade, middle-class households have seen their financial situations become more unstable. Costs for housing, healthcare and education have skyrocketed and even in many areas of the country, a six-figure income no longer guarantees financial security or a comfortable lifestyle.
According to Kiplinger, the shrinking middle class is a concern for both political parties. Between 1971 and 2021, the share of Americans classified as middle class fell from 61% to about 50%. This decline represents an undisputed growing divide between the wealthy and the rest of society.
No matter who wins this election, both conservatives and liberals recognize the middle class has to stop shrinking and start growing again. But, can the two political parties come together with common-sense and reasonable proposals to focus on as a new administration and Congress form in 2025?
Conservatives concentrate on policies that foster job creation through business-friendly regulations and tax incentives. Liberals push for wage growth (upping minimum wage), union strength and fair-labor standards. Compromise that ensures businesses are incentivized to create jobs while advocating for workers’ rights and fair wages would benefit middle-class workers.
The high costs of housing are getting attention as one of the greatest burdens on families today. Liberals want to focus on rent control, affordable housing initiatives and government investment in housing projects. However, increasing housing supply is also key, and that may mean having to include a more conservative approach to streamline building regulations to increase housing supply and lower the cost of housing.
High interest rates are coming down, which is good; however, the cost to purchase a home is still way out of reach for many in the middle class. In addition, home insurance rates have to be addressed. Homeowners are seeing their insurance rates increase dramatically. According to Lending Tree, home insurance rates have risen 37.8% since 2019.
Affordable healthcare is also a big-ticket item in today’s economy. Healthcare costs have become a significant financial strain on middle-class families, often representing a sizable portion of their budget.
Republican want market-based policies, such as Health Savings Accounts, increased competition among private insurers, etc. Democrats advocate for expanding public healthcare options like Medicaid and the Affordable Care Act (ACA).
Finding a bipartisan solution to create a hybrid system that allows for both competitive private healthcare providers and expanded public options is the obvious answer; however, it is fraught with partisan and ideological peril.
Can both parties come to a shared commitment to strengthening the middle class? It’s not really a matter of can they, but will they? If the election results in more extreme ideological and partisan divisions, coming up with common goals that unite Americans on this topic will probably be elusive.
We continue to ignore this problem at our own peril. The American middle class is the pillar of economic strength and opportunity, and the further it collapses, the more our economic landscape weakens Americans and our position in the world.
Cindy Allen 