Middle-Class Families Hit Hard by Economic Slump

Wages are down, prices are up, the gap between the rich, the once-middle-class and the poor is growing wildly and more Americans than at any other time in the last 50 years believe that at best they're treading water — if not drowning.

For CWA and many other union families, contracts have generally kept wages in line with inflation. But like every other working American, union members are caught up in the national economic turmoil.  Click here to view chart - Median Weekly Earnings: Union vs Non-Union.

"We have a collective power that most Americans don't have — yet. That will change when we pass the Employee Free Choice Act in 2009 and ensure that every worker has a fair chance to join a union," CWA President Larry Cohen said. "But good contracts don't make us immune from the skyrocketing price of gas, the dropping value of our homes, medical crises that are bankrupting families and so many other factors affecting our quality of life."

Nationwide, food banks report that they are struggling to provide enough food for a swelling population of needy, many of them formerly middle-class workers. Some of them still have jobs, but can't make ends meet. Click here to view Rising Prices chart.

"I used to be able to buy anything I wanted. I'd buy the best meats, the best vegetables, the best this and that," a man using a New York food bank told Bill Moyers' Journal in April. "Now, they give me hotdogs, peanut butter, crackers, and things. Sometimes I'll get a can of beef stew, maybe a can of soup… But it's a struggle and some days I'll really go hungry."

Republicans and even some economists point out that the official unemployment rate in the United States, though higher today than last year, is still relatively low at 5.1 percent. But fewer hours on the job are becoming a major factor, according to Department of Labor statistics: many fulltime workers aren't getting the overtime hours they count on and part-time workers are getting fewer hours a week.

"While official unemployment has risen only modestly, the reduction of wages and working hours for those still employed has become a primary cause of distress," the New York Times reported.

Meanwhile even CEOs of failed banks and companies take home tens of millions — if not hundreds of millions — in compensation. The stock market's recent downturn notwithstanding, in April a hedge fund manager reported the richest income in Wall Street's history, $3.7 billion in 2007.

A new report from the Center on Budget and Policy Priorities and the Economic Policy Institute details, state by state, the growing gulf between America's rich and everyone else.

The report says that since the late 1990s, average incomes have fallen for the lowest-earning Americans, have barely risen for those in the middle but have climbed by 9 percent on average for those in the top 20 percent.

"Before the recent downturn hit, our economy was generating solid income gains. The problem was that high levels of inequality meant these gains failed to reach middle- and low-income families, whose living standards stagnated or even declined," said Jared Bernstein, senior economist at the Economic Policy Institute and co-author of the report. "As we head into an economic downturn, these families are ill-prepared to weather the storm."

A new poll from Pew Research shows that while many struggling Americans retain a characteristic optimism, it's getting harder to stay positive.

"Americans feel stuck in their tracks," researchers reported. "A majority of respondents say that in the past five years they either haven't moved forward in life (25 percent) or have fallen backwards (31 percent). This is the most downbeat short-term assessment of personal progress in nearly half of century of polling by Pew and Gallup."