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Dreams of the middle class deferred by the recession

The recession has stalled the expectation of upward mobility in the American middle class: The unemployed are forced to live frugally, while many others choose financially cautious paths.

By Cynthia Anderson/ Contributor / October 16, 2010

The middle class, suddenly downwardly mobile, are part of Brandy Richmond's clientele at the Emergency Care Health Organization in Brandon, Fla. A work-study volunteer at ECHO, she says she sees many first-time clients embarrassed – sometimes in tears – at having to ask for social-service help because of the recession.

Ann Hermes/Staff

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Brandon, Fla.

When Melissa Pavick gave birth to her first child in 2008, the future looked wide-open. Mrs. Pavick enjoyed her work as a freelance photographer, and her husband had a good job as a systems engineer. The couple was happy enough in their two-bedroom home on a busy road in Pascoag, R.I. They'd bought the house in 2005 for $242,000; its appreciation was "an important first step in getting ahead," Pavick says. The plan was to start their family and then to move to a new home, on a quieter street, with more bedrooms and a bathroom upstairs.

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But now, with their active toddler able to dart into the road, which is 10 feet from the front porch, and a second child on the way, the Pavicks' middle-class dream is stalled.

The new house isn't happening anytime soon – the couple holds negative equity in the current one. Nor is there money to replace Pavick's nine-year-old Mazda. Her photography business has dried up. Wedding shoots that used to last all day now run two hours, and the volume of work has dwindled. The Pavicks have learned to economize, rarely going out for dinner or entertainment, and using the Internet to bargain shop. Diapers for their son arrive in bulk from the subscription program. This year's vacation was three days' shared accommodations in Maine.

It's not that things are bleak: Even though the Pavicks hold their breath when the defense contracts that underpin Mr. Pavick's company are renewed, he still has his job. Their health insurance premiums keep rising, but they have good coverage. And although they're in debt, in a house that continues to lose value, they have a roof over their heads.

Mrs. Pavick, a warm woman who laughs easily and often, recognizes all this. Still, it's not what she imagined: "We presumed things would be easier. We've had to adjust our reality." Indeed, the family's savings are nil, and they'd be in real trouble if Mr. Pavick lost his job. Their dream house is further away now than when they married. The word Mrs. Pavick arrives at is "stuck." "We're going to be here for a very long time," she says.

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Blame it on the housing crisis, a lack of jobs, the banking debacle, taxation, national debt, inflation, a power surge from developing nations. Whatever it is, the economic prospects of the American middle class are not what they were three years ago.

A Pew Research Center survey in June showed that 55 percent of adults in the US labor force have experienced a period of unemployment, a pay cut, a reduction in hours, or have been involuntarily reduced to part-time status in the past 30 months.