The United States’ middle class is more than a demographic – it’s the backbone of our economy, as more than half of America’s households identify as middle class. From teachers in Salt Lake City to firefighters in Savannah, middle-class families come from diverse backgrounds, but they share a common aspiration: to build a legacy that outlasts them, creating a stronger financial future for their children and grandchildren. At the same time, they face a unique vulnerability to economic shocks, often bearing the brunt of financial uncertainty in a way that others do not.
The size of this community is enormous. So is its economic power. With 71 million households, the middle class drives our nation’s economy. It’s no wonder, then, that policymakers, economists, business leaders and other key stakeholders care deeply how the middle class is faring.
For over a century, America’s life insurers have been steadfast in their mission to provide financial tools that support middle-class families. Today, we remain committed to helping middle-income Americans secure a more certain financial future in an uncertain world.
To better understand the challenges these families are experiencing, ACLI developed a new Financial Resilience Index that measures middle-class households’ ability to manage financial challenges and plan for a stable future. The index analyzes key middle-class economic considerations to measure the direction and degree of change in middle-class financial resilience. By examining both cost-side and resource-side factors, the index offers a holistic picture of the drivers of financial resilience. ACLI will release the Financial Resilience Index and an accompanying survey quarterly and use movements in the index to provide policymakers and others with a better understanding of how middle-class America is faring.
This index is particularly relevant today, given the volatile economic conditions that have impacted so many Americans since the COVID pandemic. Job losses, supply chain disruptions, rapid price increases and interest rate spikes have combined to lower consumer confidence and raise concerns about family financial security.
These concerns are particularly acute for middle-class Americans, who aren’t eligible for safety net protections targeted for lower-income Americans. Nor do they have the resources of higher-income families, which means that economic downturns are more likely to threaten their plans for long-term family financial security. Indeed, a downward shift in the job market or rising inflation could significantly impact their goals to leave something better for their children and future generations.
The first Financial Resilience Index reveals that many Americans are still feeling anxious about their financial future, even though inflationary pressures have lessened in recent months.
For more information: https://www.acli.com/news-and-analysis/financial-resilience-index
Andrew Melnyk is Vice President, Research and Chief Economist at the American Council of Life Insurers (ACLI). He holds a doctorate in economics and is a Certified Business Economist. His functions at ACLI include authoring white papers; managing the production of statistical publications; and managing ACLI’s Research Department. Prior to joining ACLI in 2005, he held positions in academia, government, and the private sector, both in the U.S. and abroad.
