Why Middle-Class Americans Are Struggling to Put Food on the Table

A surprising 40% of Americans are having trouble paying for basic necessities like food, healthcare and housing, according to a new report
Woman buying groceries at the super market

Low-income families are finding it increasingly difficult to pay for groceries and medical bills. But the struggle to put food on the table and secure affordable healthcare are issues that middle-class families are grappling with as well, according to a new study.

The economic and social policy research think tank Urban Institute found that nearly 40% of the 7,588 adults they surveyed had a hard time meeting basic needs for food, healthcare, housing or utilities in 2017.

Perhaps most surprising was the number of respondents (23.3%) listing groceries as a hardship. Second and third on the list were problems paying family medical bills (18%) and missed utility bill payments (13%). But the survey also found that adults (which, in this study, were those between the ages of 18 and 64) who face one type of hardship often face other types as well. In fact, just over 60% of adults who reported at least one hardship admitted they had really experienced two or more.

Types of hardships families faced in 2017

What's causing economic hardships for lower- and-middle-class America?

The national unemployment rate has been at a 10-year low, averaging 4.4% in 2017 (the period analyzed in the study), so a lack of jobs or high unemployment aren’t seen as the driving forces behind the hardships middle-class Americans are facing. In fact, more than a third of families that had at least one working adult were among those reporting difficulty in meeting basic needs. The problem, it seems, is income isn’t keeping up with the cost of basic needs.

The stagnation of the American wage

From January, 1979, to January, 2013, inflation grew by more than 237%, according to the Bureau of Labor Statistics. This means that in 2013, you'd have to spend $337 to get what just $100 would buy you in 1979.

But inflation isn’t necessarily a problem if wages are also growing at a similar or higher rate; that hasn’t been the case for many middle- and lower-class workers.

According to the Economic Policy Institute, a nonprofit, nonpartisan think tank, the hourly rate for middle-wage workers grew by just 6% from 1979 to 2013 (with inflation taken into account). Low-wage workers—those who earn less than the upper 90% of the workforce—fared even worse. Their hourly wage actually shrank by 5%.

But other expenses, such as housing and medical care, have gone in the opposite direction.

From January, 1977, to January, 2011—a comparable, overlapping 34-year timeframe—the median home value in the United States rose from $45,500 to $240,100, according to data from the U.S. Census Bureau. That's an increase of almost 428%.

Growth in the cost of healthcare has outpaced wages, too. From 2007 to 2017 alone, the average family health insurance premium increased by 55%. And even with that coverage, families often face high insurance deductibles.

This may explain why families with regular medical expenses were among the most likely to face hardships. More than 66% of adults who reported being in fair or poor health, and 57% of adults who reported having multiple chronic conditions, struggled with one of the listed hardships.

Where has the money gone?

If lower- and middle-class workers are struggling to make their money last in today’s economy, who, exactly, is benefiting? While wages for middle- and lower-class workers stagnated or, worse, shrank over the last three decades, the real wages for the upper 1% of the population actually grew by 41%, validating the idea that the rich get richer and the poor (and now, middle class) are getting poorer.

Daniel Caughill

Daniel is a former Staff Writer at ValuePenguin, covering insurance, retirement and other personal finance topics. He previously wrote about compliance and best practices for K-12 school districts at Frontline Education.

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