All is NOT well in the O'l US of A
http://www.theaustralian.com.au/new...-us-middle-class/story-fn3dxity-1227075231821
THE picture painted by a recent report from the Centre for American Progress (CAP) is a gloomy one for America's middle class.
FOR a typical married couple with two children, the combined cost of health care, day care, housing and savings for college and retirement jumped 32 per cent from 2000 to 2012 - after adjusting for inflation.
Average income barely rose in that time once you factor in inflation. The figures mark a sharp change from the preceding 12 years ending in 2000, when average income for a four-person family rose 20 per cent, after inflation, and college and health care costs rose more slowly.
Here's how costs have grown in some key categories:
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HEALTH CARE. Premiums and deductibles are higher than they were about a decade ago. And more people are paying them. Average out-of-pocket health care costs for a family of four with an employer-provided health plan jumped 85 per cent to $US8,600 ($A9,305) a year from 2002 to 2012, according to the CAP report. The figures are adjusted for inflation and are for preferred-provider organisation plans, which restrict coverage to certain doctors. Only half of Americans who obtained health care coverage through their job had faced deductibles in 2002, according to the nonprofit National Institute for Health Care Management. By 2011, that figure had reached three-quarters. Americans must channel more of their take-home pay to medical care: Health care spending in the US rose from an average of 5.4 per cent of all spending in 2000 to 7.1 per cent in 2013, according to Labour Department data. The increase from 1989 to 2000 was much smaller: From 5.1 per cent to 5.4 per cent.
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HIGHER EDUCATION. The average amount a middle-class family with two kids must save for college education - even after you include grants and other aid - jumped 39 per cent from 2000 to 2012 to $US5,300, the centre's study says. That's based on costs for four-year public colleges. Tuition and fees at those institutions soared 86 per cent, adjusted for inflation, from 2000 to 2012. That was much sharper than the 52 per cent rise in the preceding 12 years, according to data from the College Board. One reason those costs have skyrocketed is that state aid to higher education has tumbled 24 per cent in the past decade on a per-student basis, the College Board says. That's forced students to bear more of the cost.
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CHILDCARE. Child care costs for a family of four have soared an average of 37 per cent in the past 12 years and now exceed the typical cost of renting a home in every state. Census data point to a long-term trend: Average weekly childcare costs for families with working mothers, adjusted for inflation, jumped from $US84 in 1985 to $US143 in 2011.
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HOUSING. For the typical four-member family, housing costs have jumped 28 per cent in the past 12 years, the centre's report finds. That partly reflects higher home prices, which have rebounded sharply since the Great Recession.
As a result, the number of new mortgages issued fell to a 17-year low this northern spring. Renters also face higher costs. More than half of renters spend more than 30 per cent of their income on housing -
the level above which the government considers housing to be unaffordable.
- LESS SAVING.
Those trends have made it harder for middle-class families to save and build wealth. For families in the middle 20 per cent of incomes,
median net worth fell 17 per cent to $US55,400 in 2013 from $US66,600 in 2010, according to the Federal Reserve's latest Survey of Consumer Finances. Net worth equals the value of homes, savings, investments and other assets minus mortgages, credit card and other debts.
