America’s vanishing middle class

OPINION:

The American dream of a stable job, a family home, time with children and career growth is slipping through the fingers of millions. For young people graduating from college, the promise now feels like a lie as they experience crippling debt, waning job prospects and an economy where the middle class is being hollowed out.

Student loan debt stands at $1.814 trillion, with the average borrower carrying over $39,000. New hiring for recent college graduates plummeted 16% in 2025, and more than half of these grads work in jobs that don’t even require a college degree.

The middle class is collapsing. Its share of income fell from 62% in 1970 to just 43% in 2022, and 65% of middle-class Americans reported struggling financially. Personal bankruptcies have surged. The housing crisis requires an annual income of $126,670 to afford a median-priced home, while 75% of homes remain out of reach for middle-income buyers. The median first-time buyer is now 40 years old, up from 31 just a decade ago.

Multiple research institutions, including MIT Sloan, the St. Louis Federal Reserve and Stanford’s Graduate School of Business, confirm that federal spending was the primary driver of the 2022 inflation spike. When the government poured trillions of dollars in pandemic stimulus into the economy while the Federal Reserve maintained lax monetary policy, the inevitable result was inflation that continues to ravage household purchasing power.

Beyond monetary mechanics lies a deeper problem: massive government waste and corruption that cripple free market efficiency. Regardless of which party holds power, bloated budgets and politically motivated spending distort the economy and burden taxpayers. Other factors compound the crisis: housing supply shortages because of restrictive zoning, rising education costs, stagnant wage growth, and interest rates that have nearly doubled the costs of homes and cars.

Here is the uncomfortable truth: Both parties have contributed, and now both must confront. Economic desperation creates fertile ground for extremist politics. When young people graduate with crushing debt into an economy where homeownership is a fantasy and starting a family feels financially impossible, they become vulnerable to populist rhetoric. Research across 31 nations shows that 54% of adults are dissatisfied with “democracy.” Studies confirm that income inequality and limited intergenerational mobility directly fuel resistance sentiment.

When the middle class feels abandoned, it turns to candidates promising radical change, usually tried and failed ideologies. The threat is not mere political trends but, more desperately, the collapse of the basics on which stable civilization relies.

America is in the throes of weakening family formation. The U.S. total fertility rate dropped to 1.62 births per woman, far below the 2.1 replacement level, marking a 25% decline since 2007. A record 25% of 40-year-olds had never married in 2021, up from just 6% in 1980. Among non-parents, those not wanting children doubled from 14% in 2002 to 29% in 2023. Financial pressures top concerns, with child-rearing costs delaying commitments until homeownership feels feasible. Cultural shifts amplify this: Fear of divorce, reduced stigma on childlessness, personal autonomy concerns and world anxieties drive young adults to forgo children altogether.

This is not a Republican or Democratic problem; it’s an American crisis. Pointing fingers won’t pay down student loans, lower mortgage costs, create good jobs or restore common sense, normalcy and morality. The problem transcends partisan blame because both parties have perpetuated failures.

The Federal Reserve must maintain disciplined monetary policy and avoid the crime of printing our way out of every crisis. Congress must confront political fraud and waste. Every dollar wasted is a dollar stolen from the middle class. Zoning reform and reduced regulatory barriers can increase housing supply. The current model, in which students take on massive debt for degrees that often don’t lead to jobs, must be restructured. Policies that encourage business formation, reduce regulatory burden and foster genuine economic growth are essential.

We stand at a crossroads. Continue down this path, and we risk creating generations who turn against the American system. When that happens, extreme ideologies become attractive and natural ideals for love and family falter.

Real families are struggling. Real young people question whether they will ever achieve what their parents considered basic milestones. Real Americans are losing faith in the institutions that once defined our country.

This problem won’t disappear because we pin it on the other party. It will be solved only when leaders acknowledge the crisis, accept responsibility and commit to solutions that transcend election cycles. The American dream isn’t dead, but it is under great threat. Whether it survives depends on whether institutions and leaders can tear free from deceit and avarice and set aside partisan warfare long enough to save it.

• Frank Kaufmann is president of The Settlement Project and author of “Woke Ideology Critique and Counter Proposal.”