5 States Where the Middle Class Is Being Destroyed
The economic wounds of the financial crisis and Great Recession are evidently deeper than anyone has realized, despite the fact that nearly every economic indicator is showing significant progress. Case in point: the shrinking middle class. We’ve been hearing about how the middle class has been in trouble for years now, and while there’s been plenty of evidence to back those claims up, new data is showing just how deep and widespread the damage is.
Pew Charitable Trusts, through its Stateline blog, has found that the middle class has shrunk in every single state between the years of 2000 and 2013. Naturally, some states have been hit harder than others, but this new insight does indicate that there was truly nowhere to hide from the economic downturn that began in late 2008. The fall in middle class ranks was also accompanied by drops in median income in most states as well.
“Analysis shows that in all 50 states, the percentage of “middle-class” households — those making between 67% and 200% of the state’s median income — shrunk between 2000 and 2013,” Stateline writes. “The change occurred even as the median income in most states declined, when adjusted for inflation. In most states, the growing percentage of households paying 30% (the federal standard for housing affordability) or more of their income on housing illustrates that it is increasingly difficult for many American families to make ends meet.”
It’s definitely not a pretty picture.
But which states have seen their middle class households decline by the largest percentage? Read through the next few pages to see, as we’ve ranked the top five according to percentage drop in middle class households, based off of Pew’s data.
5. Nevada: -5%
The rural, vast, western state of Nevada has seen its middle class population decline by roughly 5% over the past decade and a half. In 2000, 53.6% of the state’s population lived in middle class households, and that percentage had been reduced to 48.8% by 2013. Nevada did experience huge swaths of home foreclosures during the financial crisis, as many people found their mortgages underwater. Cities like Reno and Las Vegas are economic powerhouses for the state, mostly dependent on tourism dollars. Of course, when the economy took a turn for the worse, a lot of that revenue dried up as people went into savings-mode.
4. Vermont: -5%
Somewhat surprisingly, Vermont’s middle class families took a big hit over the past several years. Like Nevada, the percentage of middle class households statewide declined by 5%, from 52.4% in 2000 to 47.4% in 2013. Vermont’s case is a little different from others on this list in that it is not home to huge industrial centers, or sprawling suburbs filled with foreclosed homes. What it does have is a lot of senior citizens who felt the crunch particularly hard, as well as ever-increasing costs of living, pushing some families out of the middle class.
3. North Dakota: -5.1%
North Dakota’s middle class households declined by 5.1% between 2000 and 2013, from 52.6% to 47.5%. Given that North Dakota’s economy has been said to have been booming over the past several years, thanks to huge upticks in oil and natural gas production, it’s interesting to see that that prosperity has apparently not been shared equally. The biggest issue? Big increases in living costs, including education and healthcare. But things have been getting better recently, and it’s likely that North Dakota will be able to reverse this trend in coming years.
2. Ohio: -5.2%
Ohio — with its industrial rust-belt cities, manufacturing hubs, and large number of union workers — saw its middle class household makeup drop by 5.2% between 2000 and 2013. There are a lot of reasons Ohio took a huge hit, and the state itself seemed unfortunately perched in a position in which it had a lot to lose. Many manufacturing jobs based in cities like Cleveland have been shipped overseas, and the decimation of unions has also played a big part as well. Just look at a comparison of adjusted median incomes: In 2000, it tallied up to more than $56,400. In 2013? Only $48,000.
1. Wisconsin: -5.7%
The clear winner (or loser) in the race to the bottom has been Wisconsin, losing 5.7% of its middle class households since 2000. Average median income has dropped by roughly $9,000 annually, and costs of living have gone up as well. There have also been many political battles that have not worked in the middle class’s favor. Governor Scott Walker gutted many of the state’s unions — which has a big effect on the middle class — and all signs seem to indicate that he will aim to implement similar policies. Like Ohio, Wisconsin’s makeup was particularly vulnerable to a recession, and the proof is in the numbers.