The three years between 2007 and 2010 were difficult financially for America’s middle-class, according to a report jointly released last week by the Consumer Federation of America and Primerica Inc. The report’s analysis of the government data concluded that middle-class families have less money saved and have suffered a severe loss in net worth due to declining home values.
“Middle income families are the fabric of America, and they are struggling more than ever,” said John Addison, co-CEO of Primerica, a financial services firm with $35 billion in assets under management headquartered in Duluth, Georgia. “We hear about the challenges families face. Too much month at the end of the money, and being sick and tired of being sick and tired.”
In 2007, the average family earning between $30,000 and $100,000 had a nest egg of $38,800. By 2010, that amount had dwindled to an average amount of $27,300 in non-retirement assets. Eating away at their savings was lower salaries and the higher cost of living. What really hit the middle-class hard however, was the decline in real estate values during that period.
The report stated that home values were the number one cause of the 35% decline in net asset values for the average middle-class family, dropping from $145,600 to $94,700 in just three years. One of the conclusions of the study was that the traditional, steady economic progress that the American middle-class has been achieving for centuries, seeing a more prosperous middle-class year after year, has come to an end, and perhaps is even going backwards, as they struggle with the difficult economic climate of recent years.