WASHINGTON (Reuters) -- The typical double-income family is worse off financially than ever, a study released Thursday said, warning that few Americans have saved enough to brace for financial setbacks.

Middle-class families are struggling to pay for a home, health insurance, transportation and their children's college with wages that have not kept pace with higher prices, according to the study by a think tank headed by a former top aide to President Bill Clinton.

The middle class's financial condition has been a key issue ahead of the November elections, as Democrats warn that this group is fast losing economic ground amid skyrocketing prices and tax cuts that offer them little benefit.

"In our estimates, it's becoming harder for families to afford what we consider a typical middle-class lifestyle," said economist Christian Weller of the Center for American Progress, the political think tank headed by John Podesta, a former Clinton chief of staff.

Weller cautioned that while Americans are taking on more debt to cover higher costs, wages have not kept pace.

The majority of Americans have not socked away enough money to brace for financial setbacks such as a job loss or a medical emergency.

According to the study, less than a third of all American families have accumulated income equaling three months of their wages. The trend is particularly pronounced among the 60 percent income distribution that makes up the middle class: those with dual incomes earning from $18,500 to $88,030 a year.

From 2001 to 2004, the proportion of middle-class families that has saved three months' worth of income dropped to 18.3 percent from 28.8 percent, the study said.

Higher prices for a range of things - including health care, energy, transportation, food and education - have put Americans in this position as corporate profits have risen, the study said.

It said, that five years into the current economic recovery, average job growth is one-fifth that of previous business cycles and wages are flat when inflation is factored into the equation.

To maintain day-to-day consumption, families have taken on a record amount of debt, equal to 126.4 percent of disposable income in the first quarter of 2006, according to the study.

Commenting on the study, SEIU Labor Union President Andy Stern said, "Of the total amount of our economy and income, we have the greatest share going to profits in modern history and the least amount going to wages in modern history."

"For most working Americans, things are far worse than any time certainly in recent history and at a time of an incredibly growing economy." said Stern, whose union represents 1.1 million health care workers.

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