SALT LAKE CITY — For years, the United States boasted a thriving middle class that offered millions of people their opportunity to pursue the American dream.
But a recent study noted that despite a strong economy, about 40 percent of American families struggled to meet at least one of their basic needs last year, including paying for food, health care, housing or utilities.
Now researchers at four major universities, including the University of Utah, are tackling the middle-class dilemma in hopes of finding ways to remedy its decline and drive expansion in the years to come.
The Urban Institute survey of nearly 7,600 adults found that the difficulties were most prevalent among adults with lower incomes or health issues. But it also revealed that people from all walks of life were running into similar hardships.
The findings issued last week by the nonprofit research organization highlight the financial strains experienced by many Americans in an otherwise strong economy.
The average unemployment rate for 2017 was 4.4 percent, a low that followed years of decline. But having a job doesn't ensure families will be able to meet their basic needs, said Michael Karpman, one of the study's authors. Among the households with at least one working adult, more than 30 percent reported hardship.
"Economic growth and low unemployment alone do not ensure everyone can meet their basic needs," the authors wrote.
In recent times, analysts worry America's middle class, the largest segment of the nation's population, has begun to contract, due in part to a widening income disparity.
The U. is part of the American Dream Ideas Challenge as a member of the Alliance for the American Dream. The project strives to find, fund, and develop policy and technology innovations from individuals or groups in Utah that have the potential to raise net income by 10 percent for 10,000 of the state’s middle-class households by 2020, explained project director Courtney McBeth.
"The data shows that the share of families in the middle class is shrinking and traditional philanthropy and government is really focused on intergenerational poverty," she said. This initiative focuses on fostering innovative ideas that can strengthen the middle class in the years ahead, she said.
Each of the four research institutions — the U., Arizona State, Ohio State and the University of Wisconsin — received $1.5 million to solicit original proposals that focus on sustainable measures to increase access to and increase the stability of the middle class in Utah through policy ideas or investable concepts for the public good, McBeth said.
"We are particularly interested in innovative and interdisciplinary solutions in the areas of health care, workforce development, education, transportation, housing and supports for families," she said. "It's either through increasing income or decreasing costs (of living)."
The Alliance for the American Dream is an initiative of philanthropic organization Schmidt Futures established by former Google Executive Chairman Eric Schmidt. The project espouses that a strong middle class will reduce income disparity and ensure upward economic mobility, enhancing opportunities for more Americans, and increasing our country’s competitiveness, McBeth said. With this goal in mind, Utah’s American Dream Ideas Challenge is seeking to fund the most compelling ideas to help foster access to and support for a thriving middle class, she added.
McBeth said the U. received 130 proposals to review by the end of August, the deadline for submissions.
A committee will narrow them down to the best 10 ideas by October, and those teams will each receive $10,000 along with all the resources available from the university to help further develop those ideas, McBeth said. Those ideas will go before a community advisory board in November where the top three ideas will be selected, she added.
"Those top three ideas will then compete against the other nine ideas (from the remaining schools) and from those 12, Schmidt Futures will pick the top four or five and each will receive $1 million," she said. This process will occur this year and next year, she said, with an entirely new round of ideas and participants vying for another pool of $1 million awards in 2019 based on a slightly different topic under the umbrella of shared prosperity and decreasing inequality.
"This challenge brings a real focus on how do we make sure we sustain and continue the thriving nature of America's middle class," McBeth said. "The middle class is such an important part of our American democracy. If you look back at the Constitution and what was written in it from the days of our Founding Fathers, this notion of having an educated and thriving middle class to support our democracy has been embedded from the very beginning."
Lead researcher Pam Perlich, the director of demographic research at the Kem C. Gardner Policy Institute at the U., said the increasing wealth disparity has pushed people formerly entrenched in the middle class out into a situation of social and economic uncertainty.
In defining the term, she said people who consider themselves middle class have a place in the social hierarchy that provides security as well as community standing and allows them to live a comfortable lifestyle that also offers hope for the future.
"You have enough security in your day-to-day life that you're able to picture a future for yourself and for your loved ones where you can see a path forward passed those day-to-day struggles," she explained. "(Of late) there has been this widening divide between the people who have been able to take advantage of the new economy and the people who aren't."
Perlich said beginning in about 1980, changing economic factors started to shift opportunities for prosperity away from the those who previously found them attainable. No longer can individuals expect to reach the middle class with only a high school education, she explained.
"If you are highly educated in the current environment, this long bull stock market and this economic recovery have richly rewarded you," she said. "But if you are in the emerging group of people who didn't have the advantage of those things, then you have become more and more insecure."3 comments on this story
She said more individuals and families have slipped into the more fragile and vulnerable lower-middle class where one crisis could threaten their very ability to keep a roof over their heads. The aim of the American Dream Ideas Challenge is to find ideas to address those very concerns and figure out ways to reverse the trend, she said.
"We need to re-engineer the infrastructures of opportunity to fit the new conditions of the economy and our communities and the populations that are here," Perlich said.
Contributing: Associated Press