Death of the Middle Class: Why You’re Falling Behind

The economy is growing. Corporate profits continue to skyrocket. So, where’s your share? For millions in the U.S., U.K., and beyond, it feels like paychecks aren’t moving. But the numbers don’t lie – the middle class is being squeezed today harder than ever before. 

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The Disappearing Middle

In both the U.S. and U.K., stability, mobility, and ownership once defined the middle class. Now, for most people, it’s a shrinking bracket and a fading dream. 

What’s Happening in the U.S. 

• Since 1979, real hourly wages for middle-earners in America have grown just 6% – or about 0.2% per year – which barely matches inflation. Meanwhile, high earners’ wages have jumped over 40% [Source: EPI] 

• In 2025, over 60% of Americans – even those earning above $100,000 – currently live paycheck to paycheck [Source: CNBC] 

• The middle 20% now earn 14% of America’s total income, down from 17% in 1980 [Source: Wikipedia] 

What About the U.K.? 

• Real wages today are £2,270 lower than they were in 2008, and even worse for middle earners and public sector workers [Source: TUC] 

• From 2022 to 2023, the average household experienced an 8% drop in real disposable income, thanks to inflation, higher taxation, and stagnant pay [Source: IFS] 

• Less than 40% of under-40s now own their home – down from 66% in the 1990s [Source: IFS] 

So, Where’s the Money Going?

Despite wages increasing on paper, any gains are being eaten into by rising costs. 

• Housing: Renting costs in the U.K. grew 9.2% year-on-year in 2024, with U.S. house prices hitting record highs and mortgage rates refusing to drop 

• Energy: Gas, electric, and fuel costs jumped enormously post-pandemic, and have quietly remained at all-time highs despite supply chains recovering 

• Food: Grocery bills have jumped more than 20% in both countries since 2022 

• Debt: Americans are now over $1 trillion in credit card debt; U.K. households are still hovering at 2010 levels 

But the most shocking part of all is that corporate profits are booming. While your real-terms cash is dwindling, the S&P 500 companies saw record margins in Q1 2025, while the U.K.’s FTSE 100 reported £167 billion in post-tax profits in 2024 – an increase of 15% from the previous year. 

What’s Really Happening?

Asset Inflation: The wealthy hold stocks and property, while everyone else has cash and credit – so the gap continues to widen 

Inflation vs Pay: Central banks like to highlight wage growth statistics, but deliberately omit how they pale in comparison to real-world expenses 

“Gigification” of Work: From casual contracts to self-employment, both U.S. and U.K. workers have less protection, fewer benefits, and no real raises 

“Productivity Gains”, but No Payout: Developing technology increases efficiency, but the benefits fill the pockets of shareholders, not the workers making it happen 

Wealth Capture: Central banks pump liquidity into markets, boosting their value. Wages stay flat, and the cycle repeats. 

The Real Wealth Divide: Stocks vs. Wages

Wages have crawled while the stock market has soared. It’s an exponential pattern, and the divide is growing. 

• Since 2009, the S&P has increased over 500% while the median real wage in the U.S. has grown around 17% 

• In the U.K., the FTSE 100 has grown by over 60% in the same period, while real average wages are still below 2008 levels 

• In 2023-2024 alone, the stock market delivered double-digit gains, while real wages were either flat or negative for most households 

This pattern results in those with assets – stocks, property, and pensions – watching their wealth multiply. Those without assets haven’t even managed to stand still – they’ve fallen behind.  

It’s no glitch. This is a deliberate feature of the system. The wealthier you are, the harder your money works for you. Everyone else gets left in the dust. 

Why This Matters

For the first time in generations, despite more people earning degrees and working more hours, young adults are actually worse off than their parents. Having to spend more money just to stay afloat results in much more than just a drop in disposable income. 

• Fewer children: it’s simply too expensive 

• Delayed home buying: waiting longer to reach a position to consider building a family 

• Longer working lives: less time to enjoy the fruits of their labour in later life 

• Rising mental health burdens: today’s adults are suffering more than ever before 

This transcends economic boundaries and bleeds into the existential. The idea that hard work equals prosperity is crumbling. We’re now seeing a systematic change, where mobility and freedom are frozen, and success now means mere survival. 

Warning Signs Ahead

• Housing affordability indices now show that London and major U.S. cities (New York, San Francisco) now require 9-12x average income to purchase a home 

• U.K. personal debt levels are projected to outpace 2008 levels by 2026 

• More than 65% of U.S. adults aged 55+ say they will not be able to retire comfortably [Source: CNBC] 

• 1 in 6 U.S. households with children report skipping meals to pay for essentials [Source: USDA] 

• Mental health crises are peaking in both countries, with 48% of U.K. respondents in a 2024 ONS survey saying money worries are harming their wellbeing. 

Can Anything Be Done?

Financial literacy needs to improve. The concepts of investing, compounding interest, and other wealth-building tools are kept for the already-rich.  

Tax reforms need to target extreme wealth accumulation but are seeing fierce resistance in U.K. and U.S. political systems.  

Voters must demand action on housing affordability and wage growth.  

And people need to start building their own personal strategy, no matter how late it may feel. ISAs, pensions, and steady asset accumulation may now the only way out of this loop. 

The pressure on the middle-class is building, and the next few years will determine the future for generations to come. 

Final Thought

You’re not making it up. You really are working harder for less. The middle class isn’t simply struggling – it’s being hollowed out by design and for profit. Unless systems shift, the idea of progressing by work alone will become fantasy. 

Join the Conversation

Have you felt the pressure of rising costs, while your income stagnates? Do you believe the middle class can recover – or is this the new normal? 

Tell us about your experience below.