Public release date: 28-Nov-2007

2 out of 3 middle-class American families on shaky financial ground, according to new report

Waltham, MA—Fewer than one in three middle-class families in America is financially secure, and the remaining majority are either borderline or at high risk of falling out of the middle class altogether, according to a new study published this week by Demos and the Institute for Assets and Social Policy (IASP) at Brandeis University

The Middle Class Security Index shows worrying trends:

Only 31 percent of families who would be considered middle-class by income are financially secure.

One in four middle-class families match the profile for being at high risk of slipping out of the middle class altogether.

More than half of middle-class families have no net financial assets whatsoever.

Middle-class families have median debt of $3,500 and at least half of them have no assets.

Only 13 percent of middle-class families are secure in their asset levels—meaning that they have enough to cover most of their living expenses for nine months should their regular income cease; 79 percent are “at risk” in this category, meaning they could not cover the majority of their expenses for even three months. Another 9 percent are “borderline.”

Twenty-one percent of middle-class families have less than $100 per week ($5,000 per year) remaining after meeting essential living expenses. These families are living from paycheck to paycheck with very little margin of security