If the middle class seems like it’s under siege, well, that’s because it is.
Across the Chicago metropolitan area, 51 percent of households are maintaining their foothold in the coveted class long associated with home ownership and financial security, according to a Pew Research Center analysis of government data released Wednesday. That’s down from 56 percent in 2000.
For those who have exited the middle class, the trajectory hasn’t been good: More Chicago-area households slipped into the ranks of the lower income than the upper income from 2000 to 2014, the analysis of U.S. Census Bureau data found. Wages in all earning groups have fallen during that time.
If the trend continues, local households led by middle-income earners could soon lose the majority.
“Being middle class can connote more than income, be it a college education, white-collar work, economic security, homeownership, or having certain social and political values,” according to the report, which based its findings primarily on income.
Brooke Shannon, 34, of Hanover Park, said the meaning of “middle class” is changing and can’t be defined solely by income anymore.
“The middle class when I was growing up is different than what it is now,” Shannon said Wednesday afternoon at Union Station. “What could be considered middle-class salary, because of cost of living, doesn’t allow me to buy a house. I can barely afford an apartment.”
Shannon said debt, the inability to acquire property, the difficult job market and the low return on investments are redefining the middle class.
“When we think of middle class historically it has been working-class people, blue-collar, office workers and things like that,” she said. “Our understanding of middle class is changing. I think it’s evolving, unfortunately, into the working poor.”
In nine of every 10 U.S. metropolitan areas analyzed by Pew, the share of adults living in middle-income households fell over the 15-year period.
“Nationally, the size of the middle class has continued to shrink in the new century,” Pew researcher Richard Fry said. “The question is, ‘Where are they going?'”
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The answer varies. Unlike the Chicago area, roughly half of the metropolitan areas surveyed made gains as more adults moved up the income scale than down.
A decline in the Chicago area isn’t entirely surprising to 36-year-old Christopher Johnson, an administrator at a dental firm in Chicago who has watched the number of middle-class families dwindle in the West Side neighborhood where he grew up and now owns a home.
Johnson cites a confluence of factors to the decline: “Jobs have left; manufacturing has left; construction is slow.”
Pew describes middle-income households as having combined earnings of two-thirds to twice the median household income, adjusted for the household size. Nationally, that amounted to roughly $42,000 to $125,000 a year for a family of three in 2014.
Local cost-of-living expenses, the number of people living in a home and inflation were also factored into the calculation. The Chicago metropolitan area was slightly greater — $44,389 to $133,170 — because the cost of living is 6.6 percent higher than the national average.
Johnson and his wife have a combined income of roughly $115,000 a year, putting the family of four on the higher end of Pew’s middle-income scale for a household that size ($48,083 to $144,251). He is confident that he won’t get edged out of the middle class based on his college degrees and the nearly 20 years of experience he’s earned since he began his career as a dental technician in the Navy.
“I feel as though I’m solid,” he said. “I can’t say we’ll stay on the upper end but definitely in the middle.”
In metropolitan areas that have held onto a manufacturing base, the middle class has fared better, according to the report. Among them are some Chicago-area neighbors — Kankakee to the south and Janesville-Beloit, Wis., to the north — where more than 60 percent of adults have middle-income earnings and local manufacturing jobs make up a larger share of the economy than is average nationally, the report notes.
“But the role of the manufacturing sector in sustaining the middle class in these Midwest localities is not clear-cut,” according to the report, which notes that while manufacturing jobs tend to pay better, the sector has been shedding jobs.
Darren Lubotsky, associate professor of economics at the University of Illinois at Chicago, said a changing economy — from machinery and technology replacing unskilled labor to a decline in the inflation-adjusted minimum wage — has played a role.
“While there have been periods in history when income inequality was declining, for most of the last 40-plus years, income inequality has been rising,” Lubotsky said.
“I think the fear is the gap between the rich and the poor is growing so much that I think we don’t have a good understanding of what it would mean for our society, for politics and for other aspects of society, if that continued to get worse for a long time,” he said.
Johnson is less confident about his neighbors in North Austin than himself as the share of lower-income families keeps growing.
“When you have a middle class that is not thriving, that affects your home value, your biggest asset,” Johnson said. “You won’t have people in the area to buy homes or the ability to pull equity out.”
He suspects that’s why many of the people he grew up with in the predominantly African-American neighborhood have fled the city.
“People have moved to places where they can surround themselves with more middle-class people,” he said.
Even those living in communities where more people are better off say that attaining a middle-class lifestyle is increasingly difficult.
By income standards, co-workers Ryan Fasano and Amanda Nemec are considered middle class.
“But we don’t feel that way,” said Fasano, 24, of Algonquin.
Both work as insurance adjusters but moved back home with their folks to save money after college. Nemec, 27, of Fox River Grove, said half of her paycheck goes straight to college loans.
While she’s engaged and plans to move in with her husband after their wedding, she said she thinks the economic climate is prompting much of her generation to delay life milestones like getting married, buying a home and having children.
“It’s a huge investment,” she said. “And I think because of the economy and the way the world is, I’m not even sure I want to have kids.”
Since college is so expensive and jobs are scarce, she thinks future generations will start forgoing higher education in lieu of jobs just out of high school. The result, they say, might be a smaller, less-educated population.
The pressures of living in the city also affect the quality of life for people who would traditionally be middle class, said Rick Nendza, of Lisle.
“If you define middle class and expand it out as being able to comfortably have a nice place, a decent car, that’s not going to happen in a big city,” the 43-year-old said.
Fasano said he thinks there could come a point when the middle class will cease to exist.
“I honestly think there’ll be no more middle class,” he said. “Instead of seeing some as middle-class workers, you’ll either be rich or poor.”
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