Running on Empty: America’s Fragile Middle Class

The Vanishing Middle Class

In the late 1970s, my mom worked as a nurse and became the family's breadwinner after my dad developed serious heart disease. His doctors told him to avoid stress, even driving, for fear it would be fatal. Yet on her single income, we managed what was then considered a solidly middle-class life. Stability was assumed, even if one parent couldn’t work.

That assumption has vanished. Today, surveys show that roughly half to two-thirds of Americans live paycheck to paycheck (People’s Policy Project). A stricter Bank of America analysis finds that about one in four households spends nearly all their income on essentials (Axios). Whether the number is one-in-two or one-in-four, millions of Americans are financially on the edge.

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Credit card delinquencies are at a 13-year high, and even routine expenses—rent, groceries, childcare—are enough to push families to the brink. The lived reality of millions of households isn’t prosperity—it’s precariousness. Economist Hyman Minsky warned that booms don’t eliminate risk—they breed it. His financial instability hypothesis (Institute for New Economic Thinking) shows how debt piles up until even small shocks can trigger a crisis. By that measure, 2025 looks like a country skating on thin ice. And despite the White House’s boasts of a “booming economy,” the cracks are showing everywhere.

Paycheck-to-Paycheck Nation

What once sustained a family on one income now falls short. In 2025, the math simply doesn’t add up. The Census Bureau reports that the median household income is about $74,500, but the baseline cost of a “normal” middle-class life—mortgage, car, childcare, healthcare—can easily reach $120,000 to $140,000 a year in many metro areas. Families are left plugging the gap with debt or scaling back until stability disappears.

Warning signs are piling up. Credit card delinquencies are at their highest level in 13 years, as households lean on plastic to cover rising rent, insurance, and grocery bills. The share of income consumed by essentials keeps rising, leaving little room for savings or emergencies.

Even in cities once considered affordable, the squeeze is undeniable. In places like Cleveland and St. Louis, median home prices now hover near $300,000—requiring $75,000–$100,000 in income just to avoid being house poor, a threshold already beyond many families. Families aren’t living extravagantly—they’re trapped in an economic system where wages lag behind the costs of essentials, leaving millions running faster just to stay in place.

Debt Across Generations

If households are stuck, much of the reason lies in debt. Mortgages, auto loans, and credit cards eat into paychecks before families can save. Medical bills add to the burden, with insurance premiums up nearly 50% in the past decade and deductibles climbing faster than wages.

The generational squeeze is especially stark. For younger Americans, tuition at public universities has more than tripled since 1980, leaving over 43 million people owing $1.7 trillion in student loans. What was once a ladder into the middle class now delays homeownership, family formation, and savings. Millions of young adults begin life under water.

At the other end of the age spectrum, older Americans face a precarious retirement. Social Security and Medicare remain the pillars of security, but both are under pressure. Trump’s proposal to eliminate taxes on Social Security benefits would blow a $1.6–$1.8 trillion hole in the trust funds, pushing insolvency up to 2032 for Social Security and 2030 for Medicare. That means steep benefit cuts just as Baby Boomers age into retirement.

Meanwhile, long-term care can cost $50,000 to $100,000 a year—far beyond what most retirees have saved.

Across generations, debt has become the silent architecture of American life. Young adults start adulthood burdened, middle-aged families juggle housing and medical bills, and seniors fear outliving their savings. Fragility isn’t confined to Wall Street—it runs through America’s households.

Small Business Paralysis

Households aren’t the only ones squeezed. Small businesses—the backbone of many communities—are freezing in place too. The U.S. Chamber of Commerce reports that confidence has dropped to levels not seen since early 2024. Owners cite inflation and tight credit, but the deeper issue is uncertainty.

Trump’s trade wars, tariff threats, and Congress’s reliance on stopgap budgets make long-term planning nearly impossible. Unlike large corporations, small businesses don’t have legal teams or lobbyists to navigate shifting tax codes and regulatory whiplash.

Instead of hiring or expanding, many are sitting on their hands, waiting for clarity that never comes. Scaled up across the economy, that caution translates into weaker growth, fewer jobs, and less innovation—the very conditions that deepen household insecurity.

When both families and small businesses are stuck in survival mode, the broader economy becomes fragile by design. This is exactly what Minsky meant: what looks like stability is often brittleness in disguise.

Conclusion: A Fragile Foundation

Taken together, the evidence points to an economy far less stable than the White House boasts. Families are buried in debt, young adults begin life under water, retirees face shrinking safety nets, and small businesses are too cautious to invest. The result isn’t resilience—it’s fragility.

When I think back to my childhood, what stands out is how one nurse’s salary was enough to keep a roof over our heads and food on the table. That sense of stability—the assumption that middle-class life was secure—was once the foundation of American society. Today, it has crumbled. What my family could manage with one income now takes two, and even then, the math rarely works.

This article is the first in a series exploring how Trump’s economic agenda is destabilizing the country. Here we’ve traced the household and community-level squeeze. In the next piece, we’ll move up the ladder—to financial markets, Wall Street excess, and executive overreach—before concluding with recommendations to restore stability. Those reforms will address issues like affordable housing, the cost of education and healthcare, and policies that could restore predictability for families and businesses alike.

For now, one point is clear: America is living on a fragile foundation. The cracks are already visible. Whether they widen into a full-blown crisis depends not just on markets, but on whether our leaders—and voters—still have the will to fight for a middle class that can thrive again.

Robert Cropf is a professor of political science at Saint Louis University.