7 signs you're dropping out of the middle class

Keeping a foothold in the American middle class is harder than ever, thanks to economic trends that are leaving many families without the financial security that is the group's hallmark.

Four out of five Americans say it's harder to be middle class today than it was 25 years ago, according to a recent survey from online credit services company Elevate. In the past 15 years, millions have fallen out of the classification, with an analysis from the Pew Charitable Trusts finding that each of the 50 states saw its share of middle-class families shrink during that period.

The triple-whammy of a deep recession, weak economic recovery, and stagnant wages have left many Americans with a sense that they're falling behind. In some cases, they're not only getting left behind by the rising fortunes of the top 1 percent of American earners, but also are dropping out of the middle class, a broad economic term that signals financial stability and the means to plan ahead, save for the future and feel comfortable.

"Compared to the middle class of a few decades ago, the 'new middle class' is less financially stable than ever before," said Ken Rees, chief executive of Elevate.

Although some may point to the proliferation of mobile phones and flat-screen TVs as a sign that people are doing just fine -- and that some families may simply be spending too much -- the trappings of a middle-class life have shifted during the past several decades. For instance, some consumer electronics like smartphones, once pricey status symbols, have plunged in cost during the past 10 years. By contrast, other costs of admission to the middle class, such as earning a college degree, have skyrocketed.

Real median income for working-age Americans has fallen more than 12 percent since 2000. That means that while buying a flat-screen TV may not overly strain a middle-income family's budget, sending a child to college may now be out of reach.

Many households are also grappling with volatility in their income thanks to the shift away from stable full-time jobs and the emergence of the "sharing economy," which makes workers more susceptible to wide income swings.

"JPMorgan Chase did a study of their customers and found that at every income bracket, Americans could see a swing of close to 30 percent in income month to month," Rees said. "As the number of stable, higher-paying jobs in the U.S. has eroded, it has created new financial pressures for millions of Americans and resulted in significantly reduced savings rates."

Read on to learn about seven signs that you've dropped out of the middle class.

Your income has fallen below $36,000

While being middle class is sometimes considered more a state of mind than a concrete socioeconomic category, experts look chiefly at income to determine who to count as part of the group. One standard measure is to look at which households earn between 67 percent and 200 percent of the median income.

That range means an American needs to earn about $36,000 annually to squeak into the middle class, based on the U.S. median household income in 2014 of $53,657, according to the Census Bureau. (The upper limit means that families with incomes above $107,000 would be pushed into the upper-middle class.)

For their part, Americans themselves give a bit more leeway on what income qualifies as middle class. Most agree that someone who earns $20,000 or less isn't middle class, according to Elevate's survey. Yet earning $25,000 per year would place a family of four just above the official poverty line. The survey also found that most Americans wouldn't consider someone with $1 million to be middle class.

"The wide range in incomes reported in the study shows that most Americans continue to feel like they are part of the middle class," Rees noted.

Exactly how much money Americans need to earn to be considered middle class can also depend on where they live. A solidly middle-class income in a low-wage state such as Mississippi won't cut it for families in states with a high cost of living, such as New York.

You haven’t earned a college degree

Maintaining a perch in the middle class increasingly means having a college degree. While some professions still provide solid earnings and a steady livelihood for workers with high-school educations, these are becoming rarer today after the loss of manufacturing jobs and weaker unions.

Experienced workers with only a high school diploma and who are 35- to 54-years-old have seen their annual earnings decline since 2009, according to a study published earlier this year by Georgetown University. They can now expect to earn $36,000 per year -- the threshold for a middle-income family -- instead of $37,000 before 2009.

The wage premium for college grads, meanwhile, has grown during the past several decades, Georgetown researchers found. In 1979, the wage premium was 36 percent for both men and women with college degrees when compared with workers with only high school educations. By 2007, that premium had more than doubled.

And then there's credential inflation. That's when employers screen for job candidates with a college degree even if the job doesn't call for it. Two-thirds of job postings for executive secretaries and assistants now ask for college grads, although only about one in five of those employees hold college degrees.

You are eating into your savings

Anyone can find themselves living in a precarious financial state, from those with six-figure salaries to workers who are just barely scraping by. But there's no denying the middle class has been hit hard by the recession and ensuing slow recovery, during which most economic gains have gone to the richest Americans. That's made it tougher for those with middle incomes to put money aside and create a financial buffer.

The middle class fell into "dissavings" -- when spending is greater than income -- after the recession, due partly to stagnant wages, according to New York University economics professor Edward N. Wolff.

Although home values and investments have risen during the recovery, there was virtually no change in the country's median wealth between 2010 to 2013. The middle class failed to see much of a boost because it had fallen into a dissavings rate of 9.9 percent relative to median income. In essence, they are eating into their savings to make up for tepid wage growth.

You are working more than one job

Historically, a cornerstone of being middle class is the ability to obtain a stable, full-time job with benefits. But since the economic expansion of the late 1990s, the number of Americans working multiple part-time jobs has has risen 11 percent to 2 million. In some cases, workers are holding multiple jobs simply because they can't find full-time work.

The combination of stagnating and a loss of stable middle-income jobs across many industries means that more Americans are forced to juggle multiple jobs to earn enough to keep up with living expenses or pay down debts. One of the top reasons why people say they worked multiple jobs was to meet regular household expenses.

Other Americans are juggling jobs to earn enough to pay for health insurance, given that part-time jobs often lack that benefit. A stable job was considered the defining characteristic of someone in the middle class, a majority of respondents told Elevate.

You can’t afford a vacation

The middle class aspires to some basic trappings of financial security, including owning a home and having health insurance. But when incomes are sliding and the mortgage still needs to get paid each month, something's got to give. Increasingly, families under financial strain are giving up on extras, including taking a family vacation.

In some cases, workers simply don't have paid vacation, thanks to the growth of part-time, temporary and other "contingent" work and the juggling of multiple jobs. Families are also tightening their belts when they go on vacation, with Americans spending $1,372 in 2011, down 6 percent from 2007, before the recession started.

Some Americans say they are cutting back in other areas to save up money for a trip, with 54 percent saying they are skipping buying big-ticket items such as TVs, according to Statista. But others are cutting back on the length of their trips to save, or planning "staycations" in order to save money.

Decades ago, one hallmark of a middle-class American family's experience was taking the kids to a Disney theme park. But that now is out of reach for many middle-income families. Admission to Disney World in 1971 cost the same as three gallons of milk, according to the Washington Post; entry now costs $105 for anyone over 10 years old and $97 for children under 10.

It's no wonder that the average household income for tourists in Orlando is about $93,000, or about $40,000 above the national median.

You rely on loans and credit-card debt to keep up

Middle-class families have debt that's about 122 percent of their annual income, almost double the amount they carried in 1989, according to the Federal Reserve.

Americans are taking on more debt to afford the basics, including their homes, vehicles and living expenses, which have continued to rise despite a long-term stagnation of wages for middle-income families.

Of course, debt can be a useful tool, helping consumers to buy homes and get a college education. But Americans say they feel conflicted about owing money, with one in five saying that no amount of debt is worth it, according to a Pew survey. Eighty-five percent said they believe Americans use debt to live beyond their means.

In the post-recession years, credit card debt is once again on the rise, with a net increase of $57.1 billion in new credit card debt in 2014, according to CardHub. New credit card debt is forecast to reach $60 billion this year.

You worry you’re falling behind

Almost two-thirds of Americans say they are spending half or more of their income on basic living expenses, according to Elevate. Another one-third said they experienced financial difficulties during the past six months.

With the cost of living rising across the U.S. and Americans not seeing much relief in their paychecks, that's causing more families to feel they're stalling out on the road to entering the middle class. Seven of 10 Americans said they still believe we're in an economic recession, according to a new survey from the Public Religion Research Institute.

Only 51 percent of Americans identify as middle or upper-middle class, according to a Gallup poll in April. That compares with the 61 percent who said they were middle or upper-middle class from 2000 to 2008, the survey found. Those lacking a college degree and who were middle aged were the most likely to say they had shifted down into lower income brackets, signaling the changing fortunes of many in those groups.

"Average working Americans are under more financial pressure than ever before and have less optimism about their ability to improve their financial status," Elevate's Rees said.