(FORTUNE Magazine) – AFTER three decades of social and economic upheaval, the contours of a new American middle class are starting to emerge. It is bigger, more diverse, more resilient, and on the whole richer than ever. It has more choices, and it is notably more satisfied. It also faces more tribulations, ranging from widespread divorce to slow income growth in today's sluggish economy. But what it is not is just as important: It is neither the placid monolith of old American mythology nor the shrinking, beleaguered group imagined by critics. Marketers will want to pay heed to its purchasing power. Employers need to understand both the pressures its two-earner couples face and its willingness to adapt to new demands. What does it look like? The families and individuals on these pages provide a portrait. FORTUNE selected them from scores screened in all regions of the country as representative of today's occupations, family status, and age distribution. Their incomes are generally at or near the local medians. Their aspirations remain the conventional ones -- a steady job, a home of one's own, a good education for the kids, a secure retirement, and the pursuit of happiness. But their lives also personify what's different. From the do-your-own-thing Sixties through the own-everything Eighties, middle-class Americans have groped their way toward a new set of basic relationships between employee and employer, husband and wife, parent and child. Like the class they mirror (defined as the two-thirds of all households with incomes ranging from about $18,000 to $75,000 a year), these Americans are marrying later, having fewer children, retiring earlier, and living longer than did their cohorts of a generation ago. This changed life cycle is the consequence of the new options and challenges Americans face today. Good jobs are plentiful, but workers bear more responsibility for keeping their skills fresh in an era of swift technological change. Young women have brighter career opportunities, but with their spouses face agonizing trade-offs in reconciling the demands of two careers with those of child-rearing. Couples are quicker to end unhappy marriages, but a high divorce rate means more families headed by single mothers living in poverty. And with people over age 75 the fastest-growing segment of the population, more are falling victim to lingering ailments such as Alzheimer's disease, emphysema, and stroke -- hugely expensive and emotionally exhausting burdens that must be born by their spouses and children. The disintegration of the monolithic middle class shows up most clearly in what's happened to household income. Between 1967 (the first year for which comparable Census Bureau figures exist) and today, the inflation-adjusted median income of all households rose 18%, to $27,225. Demography partly explains that modest overall gain. Because of the baby boom's impact, a significantly higher proportion of today's adult population has not yet reached its peak earning years. Many more households also consist of lone individuals or single parents. But uneven economic progress has helped hold the average down. The real incomes of families headed by workers with no more than a high school diploma stagnated or declined, though the upper end of the middle-class income range has expanded rapidly. Over 17% of all households have annual incomes between $35,000 and $50,000 in 1988 dollars, vs. just 11.5% in 1960. Those earning between $50,000 and $75,000 comprise 13.4%, more than four times the proportion of 30 years ago. TAKEN TOGETHER, the middle class is more sanguine today, as revealed in a survey of 5,000 households this year by the Conference Board, the business research organization. The Board asked people to compare their standard of living with what they recalled of their parents'. Over two-thirds responded that they have it better; only 15% said they were worse off. What the Board survey hints at and the stories of the households FORTUNE interviewed confirm is that middle-class families are enormously resourceful. Says Barbara Feigin, who tracks social trends as research director for Grey Advertising: ''Both in their jobs and as consumers, today's middle-income Americans are more discriminating about their goals and pursue them more strategically.'' The most important changes in American middle-class family life can be traced to the movement of women into the workplace. Women make up 45% of the labor force, increasingly as full-time, career-oriented workers. Pessimists argue that women have no choice except to work if their families want to enjoy a decent standard of living. But choice is the essence of what today's middle class is all about. Among the 3,000 women answering the 1990 Virginia Slims opinion poll, 57% said they wanted to have careers as well as families. Only 27% wanted to be ''traditional'' housewives. Says Fredda Herz Brown, a psychologist at New York's Family Institute of Westchester, who counsels young mothers to remain in the work force: ''Having more options is always better than having fewer.'' A generation ago the women who left home to take jobs were mostly married and middle-aged. Today women are climbing onto the career ladder when they are young and single, and their choices are far more varied and rewarding. Since the mid-1960s, the number of women lawyers, judges, and physicians has more than tripled to about a fifth of all professionals in those fields. Some 40% of all accountants, real estate agents, and elected and appointed public officeholders are women. THE INFAMOUS GAP between men's and women's earnings persists, and the glass ceiling that blocks women's rise to senior management remains stubbornly shatterproof. But women recognize that their options are richer today. Nearly 90% of the 3,100 women the Conference Board surveyed said their prospects were better than those of their mothers. Two-thirds said they were much better. Women's earning power is helping to weave a safety net that bolsters their families in hard times and enables them to hold on to their gains. The career commitments of women like Bernice Laney and Betty Gardner, two of the women portrayed in the boxes accompanying this article, have made the difference between maintaining middle-class security and downward mobility for their families. Laney's salary as a school administrator helped cushion her and her two children when her marriage ended. Betty Gardner's husband was unemployed for nearly half a year, but her earnings got the family through without having to sacrifice their home or other middle-class comforts. The workplace will become even more hospitable to women. Labor Department economist Susan E. Shank estimates that by the year 2000, 85% of all women in the prime earning years -- 35 to 44 -- will be in the work force compared with just half in 1970. And as their educational qualifications improve, so too should their chances of holding a higher proportion of better-paying jobs. A quarter of today's female workers have a college degree, vs. 1 in 10 a generation ago, and over half of all college students today are women. The earlier, firmer attachments that ambitious young women are making to their own careers have brought about an epochal change. With greater economic opportunity, they are choosing to delay marriage and motherhood. In 1960, 72% of women ages 20 to 24 were married. Today, 61% are saying ''I'll wait'' instead of ''I do.'' The drop among those having babies is sharper still: 54% were mothers 30 years ago; now just 28% are. LATER MARRIAGE has added a new phase to middle-class life. Some 20% of all householders under age 35 are single men or women. Since these young people are still climbing their career ladders, their earnings are lower than those of more mature householders. Nearly 42% have gross incomes under $15,000, and just 10% earn more than $35,000. But their family responsibilities are fewer and their economic prospects are bright. Over 60% of the under-35s have gone on for education beyond high school, vs. 39% for the adult population as a whole. Says Conference Board chief economist Fabian Linden: ''This longer period of financially independent young adulthood amounts to an economic, social, and psychological revolution.'' That shift has dramatically altered household spending patterns. With steady paychecks and freedom from family ties, many young singles can afford to indulge in what Grey's Feigin calls the ''me-me-me purchasing cycle'' of chic clothes, cars, cruises, and other luxuries. But the free-spending ways halt after they marry, have children, and begin worrying about paying for cribs, condos, and colleges. The quick comedown means the pleasures of parenthood are blunted as new sacrifices replace self-indulgent freedom. What's more, even as discretionary income drops, time becomes more precious. John Robinson, a sociologist at the University of Maryland who studied how Americans divide their time between work and recreation, found that leisure time has increased for every age group except parents of young children. HOWEVER HARRIED, today's middle-class families enjoy a bigger cornucopia of material comforts than those who preceded them. Take the broadest measure of living standards, spending on consumer goods. Since 1970, per capita personal consumption expenditures have risen steadily from an inflation-adjusted $8,000 a year to $12,000. Such necessities as housing and health care cost more, but the other basics of life have become more affordable. Putting food on the table, which absorbed 24% of disposable income in 1950, eats up just 15% today. It took 12.5% of total spending to clothe the family of 1950, vs. 7.5% today. Twenty-five years ago only 15% of all U.S. households owned two or more cars. Now 40% do. Even with the big-ticket investments -- housing, college education, and . retirement -- Americans are getting more for their money. Put aside those horror stories about declining homeownership rates among younger Americans. Married couples, not singles, are the home buyers. So why is anyone surprised that as people form families later in life, they also buy homes later? Rather than declining, the percentage of marrieds under 35 who own a home has risen since 1970 from 50% to 55%. Over the same 20-year period ownership rates have increased among every age group. Though it generally takes two incomes to scrape together a down payment, buyers are getting more for their money. Not for today's home buyer is the snug Levittown cottage that satisfied her parents. During the past two decades -- when over 25% of the nation's total housing stock was built -- the percentage of all U.S. homes having seven rooms or more doubled to 20%. Now that most baby-boomers have made their purchases, the youngest home buyers -- those born since the boom ended in 1964 -- face the best buyer's market since the late Seventies. Then there's the cost of college. Who can afford a university education now that a year of tuition, room, and board at leading private universities has cracked the $20,000 barrier? Answer: Just about anyone with the aptitude to get in. According to the College Board, the total cost per year for a commuting student to attend a four-year public college or university averages $5,317. A year at a public two-year college costs $4,541. The Board estimates that the parents of a student coming from a typical family of four with a total household income of $28,000 and total assets of $40,000, including home equity -- both roughly median for the country -- would have to come up with just $1,719. Scholarships, loans, or work-study would make up the difference. Says Richard Anderson, vice chancellor of Washington University in St. Louis: ''For most people it is still easier to afford a college education today than it was in the 1950s and 1960s.'' Little wonder that after declining from a peak of 64% just before the Vietnam war ended, the proportion of high school graduates going on to college has climbed back to 59%. And 22% of all students opt for a costlier private education, about the same proportion as in 1975. AMERICANS over 50 are the most affluent group of all. Though they account for 35% of the adult population, these mostly mortgage-free consumers have nearly half the nation's $319 billion of discretionary income and control 77% of all assets. They also have more free time to spend it. Since 1970, the labor force participation rate of men age 55 to 64 has fallen from 83% to 67%. The financial security of older middle-income Americans now stretches well into retirement. From 1976 to 1986 (the last year for which figures are available) the inflation-adjusted median income of married couples over age 65 rose from some $9,800 to $20,520. While retirees still rely principally on inflation-indexed Social Security checks, pensions and savings are becoming ever more important. Six years ago, 46% of employed Americans worked for companies offering pension plans, and just over half were fully vested. Today pension plans cover 63% of employees approaching age 65. Nearly 80% of those people are vested. For the 40% who are 65 or over and draw private pensions, moreover, the bullish stock market has lifted the total asset value of pension funds from $795 billion to $1.4 trillion over the past six years. Finally, the proportion of elderly collecting interest payments and dividends from savings and other assets has risen from 56% to 67% since 1976. Women make up an increasing share of those pensioners, says Emily Andrews, a pension expert who is senior economist at the Fu Associates consulting firm in Washington, D.C. She projects that the proportion of married women who retire with pensions will nearly double, to 56%, by 2010. Thus the poverty rate among elderly widows should fall -- they now make up almost 60% of all low-income elderly. The second pension will also make retired families more prosperous -- keep an eye on their spending power. WHAT IS most remarkable about the vibrant health of today's middle class is that it was achieved at a time of tumultuous change. Living in the middle class has always meant accommodating private aspirations to economic and social realities. That adjustment has probably never been more complicated than during the past two decades, given that those realities included energy shocks, double-digit inflation, and four recessions. Even the record peacetime economic expansion has been relatively painful. Growing global competition and corporate restructurings have held down income gains. An outmoded tax code penalizes single-parent households and families trying to raise themselves out of the working poor. The expectations of today's baby-boom adults, enlarged by the postwar prosperity in which they grew up, are higher than those of any previous generation. Not only the aspirations of white males had to be satisfied. As women took jobs in record numbers, minorities pressed their claim for a place in the middle-class mainstream, and more than eight million new immigrants showed up since 1980 hungry for a piece of the American dream. It is a testimonial to the determination and flexibility of today's middle-class Americans that so many managed to achieve so much more than the generations that preceded them.

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