Middle Class Power
Charles Weston [4] summarizes the middle-class squeeze in this way: But today this standard of living is increasingly precarious. The existing middle class is squeezed and many of those striving to attain the middle-class standard find it persistently out of reach. Causes include factors related to income as well as costs. For example, real median household income did not regain record levels again until There are many causes of middle-class income stagnation in the United States. One narrative involves the interplay of globalization, supply chain innovation and technology, which has enabled lower-wage workers in developing countries e.
As a result, middle-class incomes have grown in developing countries like China much faster than in the U. Another narrative described by Paul Krugman is that a resurgence of movement conservatism since the s, embodied by Reaganomics in the United States during the s, resulted in a variety of policies that favored owners of capital and natural resources over laborers. Many developed countries did not have an increase in inequality similar to the United States over the period, even though they were subjected to the same market forces via globalization. Either way, the shift is visible when comparing productivity and wages.
From to , improvement in real compensation per hour tracked improvement in productivity. This was part of the implied contract between workers and owners. In general, for a variety of reasons, the power of lower paid laborers relative to capitalists and landlords has declined.
Recent trends indicate wages have stagnated and income inequality has worsened, reducing income available to middle-class families:. According to the study, not only is real income decreasing for the middle class, but also the gap between the top wage earners and the middle earners is widening. Between and real median household income in the United States has declined by 2. According to the survey, working-class families headed by adults younger than 65 have seen even steeper declines.
Middle-class squeeze
The other way in which income affects the middle class, is through increases in income disparity. According to the census, the proportion of American families in that category, after adjustment for inflation, fell from As noted in the article, the heyday of the American middle class, and its high expectations, came in the Fifties and Sixties, when the median U.
The rising prosperity was, however, halted by the inflation of the Seventies, which carried prices aloft more rapidly than wages and thus caused real income levels to stagnate for more than a decade. While the average income in the United States is still almost the highest in the world. While overall inflation has generally remained low since , [28] the costs of certain categories of "big ticket" expenses have grown faster than the overall inflation rate, such as healthcare, higher education, rent, and child care.
These goods and services are considered essential to a middle-class lifestyle yet are increasingly unaffordable as household income stagnates.
This situation is exactly what the House of Representatives survey shows regarding health care prices. The number of people who are uninsured has also increased since , with However, because of increases in college education costs, many middle-class Americans are missing out on a college education because of high prices, or caused them to leave college with massive amounts of debt, not allowing the middle class to enjoy the full benefits of a college education.
There has been no increase in government Pell grants, while at the same time interest rates for student loans has increased to a 16 year high. These price increases don't just affect middle-class Americans trying to get into college, but they also continue to affect those who attain a college education using the high interest rates of student loans. The use of leverage magnifies gains or losses in this case.
They owe the full balance of the mortgage yet the value of the home has declined, reducing their net worth significantly. Like health care, increases in energy products can put added stress on middle-class families. From the U. Household debt contains mortgages, credit cards, student and auto loans. The squeeze on the middle class is also causing difficulties when it comes to saving money for retirement because of decreased real incomes and increases in consumer prices. There has also been a shift in employer retirement plans, with a shift from traditional defined benefit pension plans to k plans, in which there is no individual guarantee about the amount of retirement income that will be available.
Solutions to the middle class squeeze can involve a variety of strategies, from increasing compensation to reducing costs of certain goods and services or helping the middle-class pay for them.
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CAP recommended increasing the number of jobs through policies that stimulate economic demand, raising the minimum wage, strengthening the labor movement including unions , and tax incentives to encourage more redistribution of corporate profits to workers. This difference is due to the extreme difference in definitions between The Economist 's and many other models. In , a working paper by the OECD asserted that 1. Due to sustainable growth, the pre-crisis level was exceeded. According to a report by National Council for Applied Economic Research of India, India's middle class population is expected to increase from million to million in , Further ahead, by the number of middle class households in India is likely to more than double to million individuals.
According to a study by Standard Bank economist Simon Freemantle, a total of According to a study by the German Development Institute, the middle class of Sub-Saharan Africa rose from 14 million to 31 million people between and According to a study by the World Bank, the number of Latin Americans who are middle class rose from m to m between and The American middle class is smaller than middle classes across Western Europe, but its income is higher, according to a recent Pew Research Center analysis of the U.
The median disposable after-tax income of middle-class households in the U. The numbers below reflect the middle, upper, and lower share of all adults by country by net wealth not income.
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Purchasing power parity is used to adjust these number for other countries. Factors which explain differences in home equity include housing prices and home ownership rates. According to the OECD, the vast majority of financial assets in every country analysed is found in the top of the wealth distribution. Middle class and above - Middle class. From Wikipedia, the free encyclopedia.
Middle class - Wikipedia
This article's lead section does not adequately summarize key points of its contents. Please consider expanding the lead to provide an accessible overview of all important aspects of the article. Please discuss this issue on the article's talk page. Marxism and Marxian class theory. The American Class Structure. By prohibiting the importation of Spanish wools into Ireland, Humbly offered to the consideration of Parliament.
By a Merchant of London. Retrieved 18 May Manifesto of the Communist Party. Retrieved 19 April Retrieved 18 April The New York Times. Retrieved 8 June In particular, the, peasantry, who in Russia constitute eight- or nine-tenths of the petty bourgeoisie, are struggling primarily for land. Russia is a country of the petty bourgeoisie, by far the greater part of the population belonging to this class.
A Review off Research in the s". Journal of Marriage and the Family. Center for American Progress Action Fund. Retrieved 11 August Retrieved 4 October The New Class and New Capitalism. Between labor and capital - Google Books. Retrieved 1 January Capital in the Twenty-First Century.
Middle class
The Economist published 13 February Retrieved 13 December In An Age of Growing Inequality. The Times of India. Archived from the original on 4 March Retrieved 7 January Retrieved 31 October Further reading [ edit ] Balzer, Harley D. Russia's Missing Middle Class: What is middle class about the middle classes around the world? Massachusetts Institute of Technology, Department of Economics.
Archived from the original on Blackbourn, David, and Richard J. Who Are the "Middle Class"? Find out with our income calculator". Retrieved 18 February Weimar Germany and the Fragmentation of Bourgeois Politics. Ricardo, and Barbara Weinstein, eds. The Making of the Middle Class: England pp The American Middle Classes The Middle Classes in Europe, Administrative detainee Alien illegal immigrant refugee Citizen dual or multiple native-born naturalized second-class Convicted Migrant worker Political prisoner Stateless.
Lower middle class Upper middle class Bourgeoisie Petite bourgeoisie. Working poor Proletariat Lumpenproletariat. Aristocracy Hanseaten Patrician Royal family. By country or region.