Moderate and lower US earners under more pressure

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(Agencies)
Updated: 2008-07-23 11:39

WASHINGTON -- The trouble that began last summer in the financial markets raised the likelihood of a US recession, but for America's middle class, the downturn has been under way for many years, experts told a congressional panel on Wednesday.

Hit with higher gasoline prices, declining home values, rising health-care costs and little or no income growth since 2007, the outlook for those in the middle class and those with even lower incomes is dire.

"In the post-war period, the country grew together. Now we are growing apart," said Kristen Lewis of the American Human Development Project, in testimony prepared for delivery to the congressional Joint Economic Committee.

A report showing the growing disparity in wealth in the United States was released recently by the American Human Development Project, a nonprofit project whose major backers include Oxfam America and the Rockefeller Foundation.

Citing Census Bureau data, Lewis told the Joint Economic Committee that in 2006, the average annual income in the top quintile of US households stood at $168,170 -- nearly 15 times the average income of $11,352 a year in the lowest quintile.

The richest 20 percent in the country earned more than half of the nation's total income.

"The American meritocracy, the foundation of the American Dream, is at risk. Social mobility is now less fluid in the United States than in other affluent nations," she said.

The top 1 percent of US households possess a third of America's wealth and the bottom 60 percent only 4.2 percent, according to Lewis.

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