The shrinking of the middle-class families is a well-known trend in America. This research paper will explain what the causes of the decline in the middle-class families are. “Economic migrant” into higher and lower classes people had become more numerous in the past decades. Earning of women became one of the important parts of the middle-class families. But in almost 80% of families, man’s earnings still have the biggest impact on life’s ups and downs.
For more than a quarter century, researchers have found an uneven but unmistakable decline in the size of middle-class. There is a rise in unequal distribution of wages and income. The total household income share derived from earnings has fallen, while the share derived from capital investments has grown.
The researches which are made by the social researchers rely mostly on cross-sectional surveys example a survey of household conditions at a certain point in time, The economic conditions study of Americans, etc. These surveys only tell about the total net change in the distribution of income. These surveys do not focus on the most important issue in our economy, which is the movement of families into and out of the middle-class family.
A data was collected by the researchers of past 22 years from the Research Center’s Panel Study of Income Dynamics (PSID). This sample provides a unique historical record of a family’s financial ups and downs. This data showed that there was simultaneously a time of enhanced upward mobility and more frequent downward mobility.
The debate which public participate in mainly focuses on the prime-age adult: those who all are above 20 years and can live independently from their parents but are too young to be candidates for retirement. We have limited these survey and debate from the age of 25 to 55.
There is no exact definition of “middle class,” even among researchers who attempt to measure “class” by measuring household income. Some studies adjust incomes for household size, while others do not. Some analyses use after-tax income to chart economic fortunes, but most use pretax money income. And some researchers define affluence in terms of an absolute dollar figure, while others measure it relative to a distribution.
There are two methods developed to measures the economic status. The first one is which adjust family income with its size while the second one is which adjusts for family size, is characterized by an income-to need index based on the official poverty threshold. They both set boundaries and are based on after paying tax family income. In 1987, the government had set the boundaries of the middle class between $18,500 and $55000 dollars. The poverty threshold is equal household’s income when the household index is equal to 1. If the household index is between 2.0 and 6.0, or to six times the poverty line then it is the boundary of the middle class. When these surveys were taken both indicated the declines in the proportion of middle-class income households.
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