Whatever Happened to the U.S. Middle Class?
By Shlomo Maital
The middle class is the bulwark, the core, of every nations’ democracy and economy. It provides the labor, the capital and the stability that nations need. This is why we should worry, when the middle class is disappearing, as it is in the U.S. (Middle class is defined as a household with income from $35,000 to $100,000.)
A report in today’s Global New York Times by Dionne Searcey and Robert Gebeloff, based on their study, reveals these facts:
- 53 million middle class households, nearly half of all households, are aging; many are headed by those over 65. Why? Older Americans have the safety net of social security, which is politically safe and linked to the cost of living. While middle class income has declined (median household income fell 9 per cent since the year 2000), income of households headed by elderly adults has risen by 14 per cent. Problem is, that elderly safety net is going bankrupt.
- In the late 1960s, 60 per cent of middle class households were comprised of two married adults with children. Today? It is just 25 per cent.
- In the Great Recession, 2008 – ??, “we lost a lot of middle-income jobs and we gained a lot of low-paying jobs”, says an expert from the American Enterprise Institute. That is why the strong job figures lately are misleading. They are Wal-Mart and McDonalds jobs.
- The middle class deludes itself. A NYT survey shows 60 per cent of people who call themselves middle class think that if they work hard they will become rich. But this is an illusion. Social mobility in the U.S. has greatly declined. To get rich and richer, you need to be rich already.
I think the article fails to make a key and obvious point. America’s political leaders were accomplices in shifting America’s manufacturing to Asia. This destroyed millions of high-paying jobs (as in auto production). It was done both by Democratic and Republican Presidents. Nor is Congress even trying to get those jobs back. Apparently, you cannot have a strong stable middle class unless your country makes things other than hamburgers. Is that obvious? America is now paying the price for its leaders’ blindness.
Meanwhile, the U.S. middle class has not disappeared, it has simply migrated; middle class families in China and India are booming, thanks in part to well-paying jobs.
In his State of the Union address, President Obama called the middle class the “foundation of the American economy”. Really? Then, why have you, Obama, and other leaders allowed the middle class to decline so drastically? And what are you doing to reverse the trend?