
America’s once-thriving middle class is slowly fading away - walterbell
http://www.marketwatch.com/story/americas-middle-class-is-shrinking-yet-thriving-in-many-other-european-countries-2017-04-24
======
pebers
The numbers being used here feel pretty contrived to me, like the article has
decided its conclusion and is going to find things to support it. Especially
given the pseudo-title in the URL ("americas-middle-class-is-shrinking-yet-
thriving-in-many-other-european-countries") which is certainly _not_ borne out
by the final graph which depicts the proportion of middle-income adults
falling in the US, but by less than Luxembourg, Finland, Germany or Spain.

In general it looks like the US has a wider-spread income distribution, but
over time there's a trend to most of these countries spreading wider as well,
which drives the reducing size of the middle income bracket. The exceptions to
that reducing size look pretty heavily correlated with increased average
income (Denmark, the Netherlands, France, Ireland and the UK).

That suggests to me that the original question ("What’s going on with
America’s middle class?") is poorly framed to begin with; this doesn't back up
the assertion that there is anything especially unusual going on with
America's middle class, it appears to be more or less the same thing happening
in many other countries.

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fallingfrog
I wanted to agree with this article but when I read it, I found myself
thinking things like, "wait.. more Americans are lower class, but the
threshold for Americans to be middle class is way higher than for other
countries...". I'm pretty sure that "middle class" is one of those political
marketing terms that don't mean anything anyway. I mean, the division into 3
instead of 2 or 4 is totally arbitrary. The reason politicians pick 3 is
because a) it's a nice round number that has an air of truthiness and b)
everybody thinks they're middle class, so then the politician can go on about
how their policies are good for the middle class. I think a better way to
divide class is into 2 classes: owners and workers. Then you're really
addressing the fact that there are two sources that money flows from: property
and labor. The selling of the concept of the "middle class" is one of the
great marketing ploys of history.

~~~
sharemywin
Even then there are passive and active owners. And someone could be all three.

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m-i-l
Note that the article uses "middle class" and "middle income" interchangeably,
but in some countries class is not directly related to income. So when it says
"that the middle class rose in the Netherlands and Spain, and soared in
Ireland and the U.K.", at least for the UK they mean "middle income" not
necessarily "middle class".

~~~
moomin
Indeed it's not clear America has ever had much of a middle class. As PG says,
20th Century America had a large working class population who enjoyed middle
incomes, fuelled by America's huge industrial expansion. That expansion is now
over.

In my opinion, what's happened has been quite toxic. People have been given
the illusion of social progress whilst true opportunity has been concentrated
in a very small population. Those that want their country back have missed the
point: it was never theirs in the first place.

~~~
lawpoop
The scholar in me admits that you have a point, but the practicist in me says,
who cares? Let's use this narrative to get the basic social guarantees that
all those poor and middle class people have in Europe-- education, health
care, retirement, etc.

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75dvtwin
If you live in Raleigh, NC. have 4 people family and make 101K. you are
squarely in the middle class, according to this calculator

[http://www.pewresearch.org/fact-tank/2016/05/11/are-you-
in-t...](http://www.pewresearch.org/fact-tank/2016/05/11/are-you-in-the-
american-middle-class/)

    
    
      "Based on your household income and the number of people in your household, you are in the middle income tier, along with 50% of adults in Raleigh. "
    

Following the article, however, you would be classified as 'high income'.
"...In inflation-adjusted dollars, the share of U.S. households making
$100,000 or more has more than tripled between 1967 and 2017, from 8% to 26%,
according to U.S. Census data, while the percentage _of middle income_
($35,000 to $100,000 a year) has fallen. "

Something is not right.

------
CalRobert
I believe the article is based on this: [http://www.pewresearch.org/fact-
tank/2017/04/24/7-key-findin...](http://www.pewresearch.org/fact-
tank/2017/04/24/7-key-findings-on-the-state-of-the-middle-class-in-western-
europe/)

Interesting reading, but a maddening lack of a definition for "disposable
income".

~~~
shawnee_
> a maddening lack of a definition for "disposable income".

Not really. The article goes into pretty good depth about its logic comparing
them in pre-tax income (gross income) and after-tax (what it is calling
"disposable income") across various countries.

[http://www.pewglobal.org/2017/04/24/western-europe-middle-
cl...](http://www.pewglobal.org/2017/04/24/western-europe-middle-class-
appendix-c/)

 _Thus, when gross income is used to define income tiers, the result is that
higher shares of adults are estimated to be lower income or upper income, and
smaller shares of adults are estimated to be middle income._

The chart here is telling, too: [http://www.pewglobal.org/2017/04/24/western-
europe-middle-cl...](http://www.pewglobal.org/2017/04/24/western-europe-
middle-class-appendix-e/)

------
mathiasben
Not surprising as 80% of the income is being funneled to 20% of the
population. To resolve it reinstate the internal revenue act of 1954. indexed
to inflation, top marginal tax rate for income over 5mil a year should be 91%,
top corporate tax rate should be 51%.

------
jandrewrogers
The US is much bigger and more diverse economically than the countries it is
being compared to. Odd results should be expected. If you looked at individual
US States it would look much more like the rest of the cohort.

~~~
SomewhatLikely
Does that help explain the _changes_ in income distribution over time though?

~~~
PhantomGremlin
The article does touch on a large part of the explanation.

Ross Perot, running as a 3rd party Presidential candidate in 1992, called it
the "giant sucking sound" of US jobs going to Mexico due of NAFTA.[1]

Not long afterward, US trade with China drastically increased.[2] Then China
was admitted into the WTO. And the rest, as they say, is history.

The manufacturing jobs lost during this period of time were, for the most
part, middle class. With the loss of manufacturing, we've seen growth in
minimum wage service jobs and growth in highly paid knowledge jobs (e.g. HN
type people).

[1]
[https://en.wikipedia.org/wiki/Giant_sucking_sound](https://en.wikipedia.org/wiki/Giant_sucking_sound)
[2]
[https://en.wikipedia.org/wiki/China_and_the_World_Trade_Orga...](https://en.wikipedia.org/wiki/China_and_the_World_Trade_Organization#United_States_role)

~~~
djrogers
What you describe above would imply that everyone is falling out of the middle
class rather than climbing up out of it - the data doesn't back that up
though. FTA:

"In inflation-adjusted dollars, the share of U.S. households making $100,000
or more has more than tripled between 1967 and 2017, from 8% to 26%, according
to U.S. Census data, while the percentage of middle income ($35,000 to
$100,000 a year) has fallen. However, lower income U.S. households ($35,000 or
less per year) have only slightly fallen over the last four decades."

~~~
PhantomGremlin
I checked a little further. Your point is valid, but the data you quote from
the article isn't granular enough to demonstrate it very clearly.

I found a chart on the interwebs that illustrates the point a little better.
Check out the 2nd chart on this page, the chart titled "Real (Inflation
adjusted) Average Household Income":
[https://www.advisorperspectives.com/dshort/updates/2016/09/1...](https://www.advisorperspectives.com/dshort/updates/2016/09/15/u-s-
household-incomes-a-49-year-perspective)

What is shows is the bottom three quintiles have been stagnant in terms of
income. Most of the growth has occurred in the top quintile and especially in
the top 5%.

------
Fyste
O man who is going to buy the flying cars?

~~~
harryf
Nobody. You will pay-per-ride like Uber

------
averagewall
America has a much higher proportion of blacks, illegal immigrants and
prisoners than the other countries. US blacks in particular are about 12% of
the population and have a median household income about at the lower income
boundary [1], which could explain the large lower income group. America is
also obviously economically quite productive, perhaps explaining the large
upper income group.

[1]
[https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_the_U...](https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_the_United_States_by_household_income)

~~~
dismantlethesun
If you make a correlation like this one, without explaining any potential
causative steps, then everyone will rightly or wrongly assume racism.

It's not your fault, but such writing which amounts to pairing black people
with something bad, without explanation, is a 'dog whistle' for racists---
silently letting them acknowledge each other without being overt.

No, it's not enough to say "but black people are poor, thus dragging us all
down". One is supposed to not acknowledge race unless it is pertinent, so to
many your example is akin to a tautology of "poor people are poor, America has
more of them", after the mental erasure of the racially irrelevant text.

~~~
averagewall
It's difficult, yes. I was just looking for explanations and that's what I
came up with. Even if I'm wrong, I think it's harmful to understanding to
filter out ideas just because they might sound racist. A kind of self-
censorship.

It's not as simple as poor people are poor. Making it more specific: Black
people are poor in both the US and the UK [1]. The US has more black people
than the UK. So, ignoring everything else, the US has more poor people than
the UK.

[1] [https://www.gov.uk/government/publications/weekly-
disposable...](https://www.gov.uk/government/publications/weekly-disposable-
household-income-by-ethnicity-tax-years-19941995-to-20122013uk)

PS. To those who think it's racist to say black people are poor, I'd say
they're being elitist by assuming that being poor is bad or being labeled poor
is derogatory.

~~~
sharemywin
ccording to Census figures in 2013, 18.9 million whites are poor. That’s 8
million more poor white people than poor black people, and more than 5 million
more than those who identify as Latino. A majority of those benefiting from
programs like food stamps and Medicaid are white, too.

[http://www.theroot.com/hey-media-white-people-are-poor-
too-1...](http://www.theroot.com/hey-media-white-people-are-poor-
too-1790899158)

