For decades, the narrative in the United States held that a steady job, homeownership, modest savings, and reasonable debt would deliver a comfortable middle-class life. But in 2025, that narrative is fraying. Though many macroeconomic indicators appear stable low unemployment, corporate profits, and stock market gains the lived experience of millions in the middle class tells a different story. Inflation, housing costs, student debt, health care, and stagnating wage growth have conspired to squeeze budgets so tight that what counts as “prosperity” now feels distant to far too many. Recent surveys and reports underscore this growing disconnect. In 2024–2025, consumer sentiment among middle-income households sank sharply, reflecting a profound erosion of confidence in their financial prospects. Many middle earners are cutting back on nonessential spending, switching to generic brands, and delaying major purchases moves usually associated with recessionary anxiety rather than stable growth. Economists and analysts increasingly warn that the economy may be losing momentum, especially as lower and middle tiers reduce consumption.

To understand why prosperity seems out of reach, one must look at the deeper structural forces. First, wage growth for typical workers has lagged far behind rising costs. Between 1970 and today, median incomes have increased, but the gains pale in comparison to the surge in housing, medical, and educational costs. Meanwhile, the tax and regulatory environment, along with financialization and the concentration of capital returns (in stocks, real estate, private equity) increasingly favor the top tier of earners. Second, homeownership long the linchpin of middle-class wealth is becoming ever more elusive. In many metropolitan regions, home prices have outpaced income growth so dramatically that the “middle-class dream home” is simply unaffordable. For those who rent, they gain no equity; for those who own, mortgage and property tax burdens are becoming heavier. Third, debt has become nearly universal among middle-income Americans. Student loans, credit cards, car loans, medical bills: many households carry multiple obligations. In times of crisis job loss, illness, inflation spikes those debts form a noose that makes even modest financial stresses catastrophic. Studies show credit card delinquency rates are rising, and many middle-class households live paycheck to paycheck. The illusion of “prosperity” vanishes when nearly every spare dollar is earmarked for essentials, leaving little room for savings, investment, or security.

Finally, inequality and wealth concentration magnify the perception of scarcity. While many middle-class Americans struggle to stay afloat, the ultra-wealthy continue to amass assets real estate, stocks, businesses creating a gap that widens by the day. That contrast colors how people feel about their own progress: when those at the top are visibly galloping ahead, incremental movement by a middle-income family feels like treading water. Combine that with political narratives that emphasize growth but often underdeliver for the average household, and you get a potent mixture of frustration, distrust, and fear. If we are to restore a sense of prosperity for the middle class, policy change is unavoidable. Addressing affordable housing, rethinking higher education costs, bolstering worker wages and collective bargaining, reining in predatory lending, and redesigning tax systems to more fairly distribute gains are all critical. Only by aligning policy with the lived economic realities of middle-income families can we hope to turn the question “Where’s the prosperity?” into a story of recovery and renewed opportunity.