heir jobs. Recessions seem to hit higher income households much harder, which sends them down to the middle class. Middle-income households may or may not be more likely than higher-income households to qualify for unemployment compensation when jobs are scarce. But those who do are more likely than high-income households to receive benefits that replace a greater share of their regular wages, which helps them maintain their standard of living. About 75% of all American’s make $50,000 or less and after using that to take care of there children, make house and car payments, and other expenses they have little money left over to put that to savings.The real problems started in the 1980’s, as an economic shift sent shock through the nation’s consumer mentality. Competitive spending intensified. In a very big way.Throughout the 1980s and 1990s, most middle class Americans were purchasing at a greater rate than any previous generation of the middle class. And their buying was much more upscale. The familiar elements of the American dream, such as the perfect house with the white picket fence, one dog and two kids, had greatly expanded. The size of houses had doubled in less than 50 years, there are more second homes, ownership of increasingly option-packed cars continues to rise, and people travel farther and spend more on their holidays. New items entered the middle class lifestyle: a personal computer, education for the children at a private college, maybe even a private school, designer clothes, a microwave, restaurant meals, home and automobile air conditioning, and of course many others. At a minimum, the average household’s spending increased by 30% between 1979 and 1995. At a maximum, calculated by taking into account a possible bias in the consumer price index, the increase was more than twice that, or about 70%. The middle class was shrinking, companies were downsizing rapidly, economic pessimism and job a...
