Wednesday August 11, 2010 | The Vanishing Middle Class

August 10, 2010 at 12:58 pm | Posted in Coming Up | 35 Comments

Over the last few months, a number of financial experts, journalists and economists have written about the vanishing middle class. We’ll explore who makes up the middle class and why the demographic is shrinking. The great American Middle Class is in trouble and we’ll find out why.
Guests
Paul Taylor
– Executive Vice President, Pew Research Center
Dr. Dena Shenk – Professor and Director of Gerontology at UNC Charlotte
Dr. Bill Brandon – Professor of Public Policy on Health, Political Science at UNC Charlotte

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  1. If you go back in history, the idea of a middle class has been around since the Middle Ages when serfs began to leave the manor to rise in society. As a result, the Feudal Manor system died. In America, the Pilgrims who landed at Plymouth Rock were middle class, and brought with them carpenters, etc. who flourished in the Colony and became middle class. The Pilgrims and Puritans set the standard of the work ethic for the style of life we consider middle class.

    • “the idea of a middle class has been around since the Middle Ages when serfs began to leave the manor to rise in society.”

      You forgot why “serfs began to leave the manor” in the Middle Ages – it was because the lord of the manor likely died in the Black Plague which wiped out around 50% of Europe’s population in some areas and profoundly changed the social structures of numerous societies.

      • The Middle Class defined as laborers that earn a good living has never existed until the formation of Unions. As Unions go so has the Middle Class.

  2. From Moravian Falls. I am a diemaker by trade, a machinist who makes tools. In the 1920’s and 30’s, diemakers lived in the same neighborhoods with doctors and lawyers. Please have your guests comment on the way that skilled labor is looked upon with respect to income level.

    • Brent – Moravian Falls is a beautiful area, as is that whole region of NW NC. You’re a lucky man.

  3. I once read, in a reputable source, that car ownership was the number one reason for the slide of the middle class into poverty. Auspiciously, Huffington Post today has a feature showing “9 Ways to Not Own a Car”.
    What do your guests have to say about car ownership?

  4. Basically what is happening is that the USA is becoming more like a Latin America nation, which is common sense considering the rapidly changing demographics. In much of Latin America there is barely a middle class, just the lower class (around 90+% of the population) and the super-wealthy.

    Assuming current trends continues, in a few decades much of the USA will look a lot like Brazil and less like a 1st world nation. Compared to some countries in Europe and Asia the USA is already a 2nd world nation, and we are still sliding.

  5. Good Morning,

    I would like to ask your guest:

    Since the Boomers are showing such a reluctance to give up what are generally the higher paying positions with greater responsibility, forcing Gen X’ers (now in our mid to late 30’s)to stay in lower paying positions longer and in turn saving less toward retirement. How do your guests think that will effect the future of Gen X’ers? Will we end up working longer to make up for that lag?

  6. Growing up being middle class was not all about “getting ahead” or having more than our parents unless our parents were struggling to make ends meet. It was about being able to have a quality life for ourselves and our families – an affordable home, good schools, security etc. Education was viewed as a way to obtain this, not as a way to get rich. There was not a big emphasis on striving for luxuries, just for a decent life.

  7. I am sorry but your panelists do not have a clue. Oh, they can spout numbers but have you noticed they all have VERY GOOD jobs? How about some panelists that have lost their jobs to Corporate Greed? How many middle class people have lived for years at their current level by selling off inherited assets and that will have nothing to leave their kids?

    Unions made the middle class. No country in the world has a thriving middle class that does not have Unions.

  8. If it hasn’t already been brought up, please ask why we don’t raise the $102K limit on FICA-taxable income. How much of the gap would that close?

    Thanks, Mike!

  9. Re the decline of the middle class in America…
    When will the rich recognize that as a nation we are only as strong as our weakest link? If the majority of the population is allowed to become poor and impoverished I see our future looking much like Latin America…maybe not in our lifetime, but in decades to come.

    • A Latin America with guns! People are going to be very dangerous when the whole thing crumbles.

  10. Unemployment could mostly be eliminated in the USA if more women decided to get married earlier and stay home to raise children and work in the ‘household economy’ and their local community instead of being a wage slave like men in the overall economy. Women have gone from working WITH the men in their lives to working FOR ‘The Man.’

    If more women worked at home instead of in the wider economy it would also free up millions of jobs for America’s burgeoning numbers of unemployed men who desperately need jobs.

    In time the cost of living would also drop back to normal ranges more in line with one-income earners. The modern two-income earning ‘family’ has done nothing except inflated the cost of living: mortgages/rent, car payments, insurance, etc etc…all has been severely inflated by the two-income scam.

    “What would you say, dear reader, if I told you that I’ve come up with a way to eliminate unemployment in the United States – yes, even in the face of the current economic mess? What if I explained that it would also improve the effective standard of living of many American families and decrease their income tax burdens? And that it would also increase our economic resilience and sustainability, and simultaneously cause a significant decrease in the amount of automobile traffic on America’s streets and highways? Would you be all for it?

    No, dear reader, you wouldn’t. Permit me to explain why.

    Right now, many two-income families with children in the United States are caught in a very curious economic bind. I haven’t been able to find statistics, but I personally know quite a few families for whom the cost of paid child care and one partner’s costs for commuting, business clothes, and all the other expenses of employment, approaches or even exceeds the take-home pay of one partner. Factor in the benefits of shifting to a lower tax bracket, and for a great many of these families, becoming a single-income family with one partner staying out of the paid work force would actually result in an increase in disposable income each month.

    This is even before factoring in the financial elephant in the living room of the old one-income family: the economic benefits of the household economy. It’s only in the last half dozen decades that the home has become nothing more than a center of consumption; before then, it was a place where real wealth was produced. It costs a great deal less to buy the raw materials for meals than to pick up something from the supermarket deli on the way home from work, as so many people do these days, or to fill the pantry and the fridge with prepackaged processed food; it costs a great deal less to buy yarn than to purchase socks and afghans of anything like the quality a good knitter can make; it costs a great deal less to grow a good fraction of a family’s vegetables in a backyard garden than to buy them fresh at the grocery, if you can get them at all.

    The difference in each case – and examples like this could be multiplied manyfold – is made by the household economy. Economists like to dismiss the household economy as inefficient, but it’s worth remembering that “efficiency” in current economic jargon is defined as labor efficiency – that is an economic process is considered more efficient if it uses less human labor, no matter how wildly inefficent it is in any other sense. Economists also like to dismiss the household economy because it lacks economies of scale, and here they’re on firmer ground. Still, there’s another factor that more than counterbalances this; much of the value of an employee’s labor – as much, as Marxists like to remind us, as the employer can get away with taking – goes to support his employer, while all of the value produced by labor in the household market remains with the family and is used directly, without being mediated through the money economy.

    This is why, until quite recently, at least half the adult members of most families, aside from the urban poor, worked in the household economy instead of the money economy. It’s also why a grandparent or two or an unmarried aunt so often found a place in the family setting. This had very little to do with charity; an extra pair of hands that could be employed in the household economy was a significant economic asset to most families. One of the advantages of this, of course, is that elderly people continued to have a valued and productive role in their families and communities, instead of being paid to go away and do nothing until they die, as so many of them are today.” – http://thearchdruidreport.blogspot.com/2010/04/blindness-to-systems.html

    • Realist: What if the man (husband) stays home to nurture and mop/garden and the women stays in the workforce? (Assuming heterosexual marriage) I would despise going back to an arrangement of a mostly male dominated workplace with the women who have to work being just another second class helpmate in a commercial polygamy arrangement. Right now I’m at the top of my game in theatrical lighting and no man (and few women) can match me. What a loss if I had stayed a helpmate!

      A two-worker household would be way ahead if wages hadn’t declined the last 40 years. The compact between big labor and big business has crushed skilled and degreed workers. Harley Davidson is crushing its union partner now. Bikers may soon purchase a piece of AMF-like exercise equipment again made in Mexico as they did under Reagan. Get the brain scraper-uppers ready.

  11. I feel so much better now that these well employed panelists tell those of us that have lost so much that everything is going to be fine.

  12. Gee Wiz, I had no idea there were so many victims, helpless with no control over their own lives.

    • You mean like losing one’s job, health insurance, house, and 401K? Yeah, those people messed up, huh?

      Must be nice to be in control of all that…

      • Another victim bites the dust. I guess the best thing to do is curl up in the fetal position and cry.

      • No the best thing to do is keep working even though you catch the wrong end of the thievery done by Corporate thieves and banking thugs. Yes thugs, just like what we called Mafioso when they practiced the same “financing” as the banks now do. But guess what Greg, no matter how much you smear the word victim, there are victims. Maybe one day you will get to be one and show us all your real character!

      • I never said there were no victims. Here’s one. The world’s full of them. Here in America we’ve got it made in the shade with a glass of lemonade. I never blamed America or the rich or corporations for my many hardships… even while sleeping in a phone booth in the winter. Self-pity is the worst thing you can do.

  13. http://article.nationalreview.com/438990/the-class-warfare-gambit/michael-g-franc

    I agree that more of a balance should be maintained between pay for corporate officers and other workers, especially in publicly traded companies. If one owns a company, the owner has the right to do as he/she pleases, though. They are assuming the risk with their capital.
    Maintaining a healthy balance of salaries benefits the whole company, with workers feeling loyal and valued. Unions cause many problems — they are not always the best answer — witness Europe and GM! An employee-owned company I know of gave its workers the choice between receiving shares of the company or staying with the union and its retirement compensation. The “owners” will now receive many times more money in retirement than the structured union pensions — and the workers who chose that are really sorry they did. They chose an adversarial relationship with the company, rather than making a commitment to do what was necessary to make the company prosperous, valuable to its customers, and a leader in its industry.

    • Luckily for those that took “ownership” that the company prospered. That is all they have, luck. If the Corporate officers had destroyed their company (which they may still do) as so many have they would be wishing they had the structured pensions.

      • Cheer up Benny, people aren’t helpless. Get down on your knees and thank the Lord for big business and wealthy individuals that do so much good for society. Thievery doesn’t pay off in the end. That’s why the most successful entities don’t roll that way.

      • Your naiveté is amusing. The thieves that at Goldman Sachs, AIG, Merril-Lynch, Bowater, Home Depot, and on and on that are now at home with their plundered millions while countless hard working employees have nothing are laughing it up while society suffers. No thanks I WILL not thank big business or wealthy individuals for plundering society. You may bow to god gold and think they “do so much good for society” but I do not!

      • Stay bitter, fine but you really should get a clue.

      • I have way more than a clue. I an a realist not bitter. Now take your arrogant tripe about victims and move along. You will never understand that just by luck and birth that you are in any better shape than those hurting the most. The next time you look down at those “victims” working 50 hours a week at minimum wage try once to wonder how you would do on that pay and actually working for once in your life!

      • If I worked only 50 hours a week I’d think I died and went to heaven.

  14. This is predictable and funny. I admit to being purposely provocative. It’s so easy to get a rise out of the enlightened folks at this blog but what am I guilty of? Certainly not the hideous things of which I’ve been accused. I believe the notion of personal responsibility ought to at least be a tiny part of the debate. I don’t believe in constant excuses and the blame game. I acknowledge that poor people don’t supply jobs. I understand that we’d be in a world of hurt without oil companies to supply the fuel that drives the world economy. Or insurance companies that sell peace of mind. Or Pharmaceutical companies that save, improve and prolong lives. Or big corporations that keep goods and services affordable. I’m aware of the enormous philanthropy of the uber rich like Bill Gates, Ted Turner and Warren Buffett. I know it’s true that the top 1% of wage earners pay 39% of the bill. For that I’m laughably vilified but am I wrong about anything I’ve said? Only if you project onto me things I never said such as there are no victims or no bad apples in the corporate world. Why honestly assess the situation when you can paint dastardly intentions with a kneejerk broad brush? That’s intellectually dishonest and lazy. There are victims and even helpless victims but most people don’t fall into that category. I have faith in my fellow man to take at least some control over their own lives. If there are no jobs you can move to somewhere where there is. If your 50 years old (I am) and haven’t learned skills (a choice) to enable you to earn more than minimum wage then educate yourself. Don’t start a family if you aren’t prepared to do so. Nothing’s easy except complaining. And before the personal attacks resume I’ll say, nothing I’ve written contradicts my heartfelt devotion to altruistic generosity with my time, efforts and meager wallet. If you assume otherwise you’re wrong.

    • Poor, overworked whiner that you are! Poor little rich people paying all the taxes. Nice to see arrogant ones like you wanting the guy working 40 hours a week at $7 an hour (which you demand not be raised) to have to pay some more taxes for to help the poor oppressed rich people that suffer so at the hands of the tax man. You work over 50 huh? I doubt you have worked a day in your life. Dig a ditch all day, or work in a cotton mill, or lay bricks all day and then talk to me. Your sitting at a computer and thinking really breaks my heart you poor overworked thing.

      No knee-jerk reactions here (how long do you watch Fox to get these terms down) just another person who worked 35 years for a company that was bankrupted by mismanagement and watched those managers take home millions while leaving behind them employees denied severance they were due and whose 401k had bottomed out as the scoundrels destroyed the company. No, you are the one who does not have a clue.

      No one here has said anything about not working. I have I am sure as many skills as you and I am moving on. But, I was mistreated. My company was destroyed by charlatans that enriched themselves and destroyed a fine company. While you so blissfully tell others to just move, bet skills and your other BS, let me simply tell you to take a hike!

      • Thank you for your thoughtful and civil reply. You destroyed every point I made drawing on your intimate knowledge of my life.

  15. I must apologize, I wrote: “It’s so easy to get a rise out of the enlightened folks at this blog…”, and then went on to criticize those who paint with a broad brush. I’ve encountered many like Mr. Dawkins here so my reaction wasn’t a kneejerk one but I definitely over generalized and that’s not fair to Realist (whom I often disagree with but is always civil) and others including Mike, Tim and Wendy who have ALWAYS been fair and gracious. These are perilous times and honest debate is crucial.

  16. Thanks for your excellent post. Keep in mind, too, that once we are all serfs, we will not return to pre American pre French revolution serfdom. We will be in a nightmare world. Back in medieval times the King could not even get across his kingdom in a week. Now, there are technologies of weaponry, calculation, tracking, surveillance and other drastic forms of control.

    Trillionnaires will have the world as their playground. Human rights will be a term which nobody understands. We will have the same rights as livestock. We will be human livestock with the right to be slaughtered without or with mercy. I never use the term –elite–to refer to depraved killers, which is what these trillionnaires are.

  17. Middle class is a slippery term. College educated, financially secure and six figure income for family of four are good measures. In Charlotte, low income households can get housing assistance. d. This figure is 110% of area median income , which is $73900 for a family of four.

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