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July 23rd, 2008
Posted: 10:25 AM ET
NEW YORK (CNNMoney.com) — America’s middle class is growing increasingly squeezed by sagging incomes and soaring expenses, experts told Congress on Wednesday. Adjusted for inflation, median household income dropped by $1,175 between 2000 and 2007, said Elizabeth Warren, professor at Harvard Law School, in written testimony before the Joint Economic Committee. At the same time, the average family is spending $4,655 more on basic expenses, such as gas, housing, food and health insurance. Gas alone costs $2,195 more for a family making the same commute in May 2008 as it did eight years earlier. Families with children saw their child care costs soar. Those with children under age 5 spent an addition $1,508 a month, while after-school costs for older children rose $622. To cover these soaring expenses, many people have had to turn to credit cards. Nearly 10 percent of total disposable income in the United States goes to paying off such debt, Warren said. –From CNNMoney.com’s Tami Luhby |
 
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