I have heard this, and with jobs gone and most likely not coming back, most "Middle Class" may backslide into being lower class. I can see it happening.
I didn't watch the whole thing as my attention span won't allow it, however I found a quick summation in writing:http://www.mymoneyblog.com/archives/2008/05/the-coming-collapse-of-the-middle-class.html
Starting around 1970, more and more mothers started working full-time. How did this affect finances? Household income indeed went up from 1970-2000 from ~$40,000 to ~$65,000. However, the inflation-adjusted income for employed males actually went down slightly. So the increase was entirely due to the additional women working.
But hey, households are still earning more. Good, right? Next, she crunched some data on what a dual-income, 2-kid family spent their money on in 1970 vs. 2000.
We actually spend less on an inflation-adjusted basis on many things nowadays:
32% less on clothing
18% less on food - including groceries, eating out, and yes, even Starbucks
52% less on appliances
24% less on car expenses, per car
Not so fast, we also spend more in many areas:
76% increase in home mortgage payments . Surprising, the actual house size didn’t grow that much based on number of rooms (5.8 vs. 6.1). I wonder if this would hold true if it was based on square footage, however, as my research on that indicates a big increase in size.
74% more for health insurance, even adjusted for healthy family with employer-sponsored health plans.
52% more for cars, since now we have more cars per household. We gotta get to work, right?
Infinite% more for childcare
25% more in effective tax rates, due to higher income
In 1970, credit card debt was 1.4% of annual income for the median household. In 2005, it is 15%.
Finally, we spend a lot more on education. In 1970, you needed a high school diploma to get a good job, which took 12 years of government-provided schooling. Nowadays, the average family pays for 2 more years of pre-school, plus 4 more years of college, all out of pocket.
Net Result: Not Good
Note that the cheaper things are the smaller, more flexible expenses… while the more expensive things are the larger, more fixed expenses. So a family now earns a bit more, but also spends a much, much larger percentage of their income. So much, in fact, that now we need both of those incomes to afford everything we buy. If either spouse loses a job, the family falls behind. Studies show that a family with children has between double and triple the bankruptcy rate of childless households"