WORLD> America
Moderate and lower US earners under more pressure
(Agencies)
Updated: 2008-07-23 11:39

POVERTY AND RACE

When categorized by race, the disparities are even more stark.

Federal Reserve data show that in 2004, the median net worth was $140,800 for whites and $24,900 for non-whites, a nearly six-fold difference.

"Minority families have much less to fall back on than white families on average," Lewis said, cautioning with other members of the panel that debt is on the rise, particularly as home values decline.

GASOLINE PRICES BITE

Higher gasoline prices, over $4.00 a gallon in many areas, have eaten away at American incomes, most dramatically the middle class. Over the last year, price increases have cost consumers an extra $1,100 a year, according to David Kreutzer, an economist at the Heritage Foundation, a conservative think tank in Washington.

"Price increases have the obvious direct impact on gasoline expenditures. But these direct impacts ripple through the economy and produce additional burdens on households," Kreutzer said.

Higher gasoline prices squeeze the production side of the economy from both the demand and cost directions, he said, warning that federal policy not inhibit "efficient responses to market shocks."

His comments come as lawmakers are considering a spate of bills aimed to cut speculation in oil markets, which have been blamed for higher oil prices.

But Bush administration officials and others warn that supply-and-demand issues, not speculation, have been the cause of big increases.

Sen. Charles Schumer, the New York Democrat who chairs the Joint Economic Committee, said the double whammy of surging prices, especially for food and energy, and declining incomes are pushing more Americans into lives of quiet desperation.

"There is a silent cry going out as middle-class families gather around their dinner tables each night to talk about how to pay their ballooning bills," Schumer said.  "Middle-class families are the engine of our economy, but their earning power and economic security have actually declined in the last seven years."