San Antonio, TX -- (SBWIRE) -- 10/03/2012 -- A new report released by the nonpartisan Pew Research Center has shed some light on the perils facing the middle class in this stagnant economy. Among other things, it showed that the average American household's income declined precipitously between 2001 and 2010.
The report incorporated recent U.S. Census data into a Pew survey of 1,300 middle-class American adults. The survey defined "middle class" households as living units with annual incomes of between roughly $39,000 and $118,000. These figures are 66 percent and 200 percent, respectively, of the national median household income.
According to the Pew report, American households' incomes were declining steadily even before the recent recession. In 2001, the average American household took in nearly $73,000 per year. By 2010, that figure had declined to around $69,000.
The net worth of the average American household dropped by even more during the survey period. From a peak of nearly $130,000 in 2001, this figure collapsed to just $93,000 in 2010. Much of this decline can be attributed to the national housing market's woes, which wiped thousands of dollars from the balance sheets of many American homeowners.
Consumers appear to be angry about these troubling trends. Over 90 percent of survey respondents blamed Congress and other branches of government for enabling the recent economic slide. Smaller percentages of respondents blamed financial institutions and large corporations in general.
The erasure of wealth over the past decade has dramatically reduced the ranks of the middle class. The broader middle class, defined by inflation-adjusted income parameters similar to those used by Pew, has shrunk by 10 percent in the last 40 years. Just 51 percent of Americans can now be considered middle class, down from 61 percent in 1971.
Worse, those middle class households that do remain must share in an ever-shrinking portion of the nation's wealth. From 62 percent in 1970, the middle-class share of national income declined to just 45 percent in 2010. Upper-income households, which have seen their wealth skyrocket during the past generation, enjoyed the vast majority of income gains during this same period.
Further, a majority of survey respondents expressed concern about declining standards of living and worried that their finances might not improve in the coming years.
The Pew study makes clear the importance of personal finance. The tough economy has forced millions of American households to take on uncomfortable amounts of unsecured debt in the form of high-interest credit cards, business loans and revolving credit lines. Such leverage has the potential to cause unpleasant consequences.
Discipline and responsibility are the cornerstones of personal finance. Individuals who use detailed spending plans to bring their expenditures in line with their incomes tend to use risky forms of credit less often than those who do not. Many responsible consumers also use credit sparingly, reserving their credit cards for essential big-ticket purchases and expensive emergencies.
As average incomes and net worth figures show few signs of recovering in the near future, consumers who find themselves falling deeper into debt may need to seek help. Although there are many forms of debt relief available to the public, debt settlement tends to be less risky and more rewarding than bankruptcy or debt consolidation loans.
Debt settlement is designed to help individuals with more than $10,000 in outstanding debts. In the past, the process has proven effective at significantly reducing clients' principal balances. Although every case is different, the process is generally cheaper and quicker than other forms of debt relief. Visit Debt Consolidation USA online or call their toll-free hotline today to learn more about debt settlement.
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