U.S. President Barack Obama is fond of painting Mitt Romney as out of touch with America’s suffering middle class. And, so far, the Republican candidate has given him plenty of ammunition. Romney, the multi-millionaire Republican, recently defined the country’s middle class as households that make up to US$250,000 a year.
Though this is also technically the upper limit of Obama’s cut-off, most American households exist on less. Way less. The median household income last year was just $50,054, according to a recent report from the U.S. Census Bureau. That’s down 1.5 per cent from 2010 and, alarmingly, when adjusted for inflation, is where things stood in the late 1980s, when Ronald Reagan was president. Even more troubling: the same report showed earnings for American men flatlining for the past four decades (although the impact on households has been partially offset by gains made by women over the same period). Men’s earnings now sit at just over $48,000, compared with over $50,000 in the early 1970s.
A Pew Research Center survey recently described the period of middle-class hardship after the Great Recession as a “lost decade.” But the core problem—stagnant income growth—has been around for a lot longer.