The economic plague consuming America right now is chipping away at the middle class

The drop comes as early pandemic government assistance programs waned, nearing 2019 pre-pandemic levels when only 29% of households were considered financially healthy. 

A good indicator of strong financial health is having a steady income and savings. But more people reported that they were outspending their earnings—only 79% of respondents said they were spending less or equal to their income (a record-low that is 6% less than it was last year). Respondents also said they weren’t building short-term savings and didn’t feel confident in their long-term finances. 

The number of Black people considered to be financially healthy reached a new low of 15% this year, underlying how inflation has disproportionately affected Black, Latinx, and Native American households. But even typically privileged or secure groups like high earners, who aren’t usually as devastated by economic volatility, experienced financial hardship for the first time in a while thanks to inflation and a plunging stock market.

Households earning over $60,000 saw the greatest declines in financial health: from 43% to 36% for those earning between $60,000 and $99,999 and from 59% to 54% for those earning over $100,000. Lower-income households saw fewer people feeling this way with less of a drastic drop from last year (2 percentage points).

Inflation is even pinching the middle class

That higher-income households are feeling a bigger difference in their financial health is evidence of America’s shrinking middle class.

As inequity grows, the number of adults who live in middle-class households shrunk from 61% in 1971 to 50% in 2021, according to an analysis from Pew Research Center. The dollar doesn’t stretch as far as it once did—two-person households these days can still earn up to $127,293 and be considered middle class. Low-income families are hit hardest by inflation, but the majority of middle-income households in the U.S. say their income is outpaced by the current cost of living.

Even though Americans saved a boatload during the pandemic, not everyone feels that way when they’ve been dipping into their pandemic savings. A Brookings Institute report from this past spring found that most households are doing better than they were in 2019, saving more and earning more. But they’re also shelling out more for everything from gas and housing to food.

These households are “seeing that financial buffer decrease,” Wendy Edelberg, a senior fellow at Brookings, told Fortune. “If you’re watching your checking account dwindle, that’s stressful. If you’re watching prices go up in ways that we really haven’t seen in decades, that’s stressful.”

While it looks like inflation has started to cool down, if it continues to remain at its aggressive rates, the extra savings that are keeping many households afloat will begin to dry out. As much as Americans might be pining for a roaring 20s, it’s hard to forget your troubles when affording life is top of mind.