Why The Middle Class Is No Longer Middle Class

Why The Middle Class Is No Longer Middle Class

The middle class has long been considered the backbone of the American economy, characterized by a comfortable standard of living, homeownership, and financial stability. However, in 2024, the middle class in the United States faces significant challenges that have eroded their economic security.

High inflation rates, skyrocketing real estate costs, and wages that have failed to keep pace with the rising cost of living are the primary factors contributing to this erosion.

In this article, we will explore why people who felt like they were middle class in 2019 may struggle so much in this current economic environment that they no longer feel middle class due to the monthly financial strain.

Inflation: The Silent Thief of Middle-Class Purchasing Power

Inflation has profoundly impacted the middle class, with prices for essential goods and services rising significantly over the past few years. From 2019 to 2024, prices for typical expenditures increased by 23%, with food prices up 27% and gasoline by 29%.

This has disproportionately affected lower and middle-income households, as they spend a larger share of their income on necessities. Middle-income families, in particular, feel the strain, with about 75% of their resources going towards essentials like food, housing, transportation, and healthcare. [1]

Inflation can make the middle class feel like they are no longer part of this economic group by eroding their purchasing power, increasing the cost of essentials, and making it harder to achieve financial goals.

When wages fail to keep up with rising prices, middle-class families may struggle to maintain their standard of living, leading to feelings of financial insecurity, stress, and diminished self-esteem. Inflation is the silent tax that destroys economic stability for wage earners.

The Housing Market: A Dream Deferred for Many

The dramatic increase in housing prices has made homeownership increasingly unattainable for many middle-class families. In 2024, the median home sale price in the US reached $412,219, an increase of over $118,000 since just four years ago.

In some of the least affordable metro areas, such as San Jose-Sunnyvale-Santa Clara, the average home value has skyrocketed to $1,461,923, requiring an income of $468,252 to afford a home. As a result of these rising housing costs, many middle-class families have been forced to rent for more extended periods, further straining their finances. [2] [3] [4] 

The increase in housing prices since 2019 has made homeownership, a traditional marker of middle-class status, increasingly unattainable for many families.

With median home prices skyrocketing and some metro areas requiring incomes far beyond the reach of most middle-class households, many families are forced to rent for extended periods, limiting their ability to build wealth and achieve stability.

Due to higher real estate prices and interest rates, the middle class can’t afford to purchase homes in most major cities in 2024. This housing affordability crisis can lead to emotional and psychological consequences, making middle-class families feel like they are falling behind and no longer part of the middle class.

Wage Stagnation: The Growing Disconnect Between Income and Cost of Living

While wages have increased for some, they have not kept pace with the rising cost of living. From March 2019 to March 2024, the lowest quarter of earners saw an 8% increase in inflation-adjusted wages, whereas the highest quarter of income earners experienced a 1% decrease.

Employees who don’t receive an annual raise equal to inflation receive a pay cut. This is even more pronounced in their purchasing power versus items that have outpaced inflation, like real estate, gasoline, energy, and food.

This disparity has left many middle-class families struggling to maintain their standard of living. The Congressional Budget Office (CBO) has noted that middle-class incomes have lagged behind the richest and the poorest segments of the population since 1979, further highlighting the growing disconnect between income and the cost of living. [5]

The Shifting Perception of Middle-Class Status

The financial strain the middle-class faces have altered the perception of what it means to be middle class in America. Traditional markers of middle-class status, such as homeownership and financial security, are increasingly out of reach for many families.

Many middle-class Americans report feeling financially insecure, with many expressing concerns about their ability to maintain their current lifestyle and provide for their families long-term.

The Struggle to Maintain a Middle-Class Lifestyle

The ongoing financial strain has profoundly affected the various aspects of middle-class life. Many middle-class families have been forced to cut back on non-essential spending and dip into their savings to cover basic expenses.

This has led to a growing sense of uncertainty and anxiety among middle-class Americans as they grapple with the challenges of maintaining their living standards in the face of rising costs and stagnant wages.

Addressing the Middle-Class Crisis: Potential Solutions and Policy Changes

Addressing issues such as inflation, housing affordability, and wage stagnation is crucial to alleviating the financial challenges faced by the middle class.

Potential solutions and policy changes could include measures to control inflation, such as implementing monetary policies that promote price stability and encourage competition in critical industries.

The best thing the government can do to slow down inflation is to stop increasing the debt by $1 trillion every 100 days and stop spending this money on the economy. [6]

Additionally, policies aimed at increasing the supply of affordable housing and incentivizing developers to build more middle-income homes could help address the housing crisis.

Furthermore, initiatives that promote wage growth and reduce the gap between the rich and the poor could help bolster middle-class financial stability. Allowing tax breaks for corporations that spend more money on payroll could help.

This could include city and state governments investing in education and training programs that provide workers with the skills to secure higher-paying jobs.

Key Takeaways

  • A combination of economic factors has severely undermined the once-stable financial foundation of the middle class.
  • Rampant inflation has significantly diminished the purchasing power of middle-income households, making it harder to afford essential goods and services.
  • Due to the astronomical rise in real estate prices, the dream of homeownership has become increasingly elusive for many middle-class families.
  • The widening gap between income growth and the escalating cost of living has left many middle-class Americans struggling to maintain their standard of living.
  • The traditional hallmarks of middle-class status have become increasingly unattainable, leading to a shift in the perception of what it means to be middle-class.


The American middle class faces significant challenges in 2024, with high inflation rates, rising real estate costs, and stagnant wages eroding their financial stability. As traditional markers of middle-class status become increasingly out of reach, many families struggle to maintain their standard of living.

Addressing this growing middle-class crisis will require a concerted effort from policymakers, businesses, and society to implement solutions that promote financial security and ensure a thriving middle class for future generations.