5 ms·

Real wages are dead flat for decades, everything else costs more so purchasing power is significantly reduced. The middle class is shrinking. For a lot of A

Real wages are dead flat for decades, everything else costs more so purchasing power is significantly reduced. The middle class is shrinking. For a lot of Americans it's a really bad time.

eanzenberg 7y ago
The American middle class is shrinking because the majority are moving into the upper class, while the lower class remains constant. There's plenty of reports on this, check out intragenerational financial mobility.
- defterGoose 7y ago
  So many reports that you didn't bother linking to one? I'm sorry, but this seems heinously misinformed given that our debt/equity ratio keeps growing.
  - adventured 7y ago
    The Fed's figures indicate it's entirely correct. What's actually happening is an increased bifurcation of outcomes in the US based on race and education levels. Educated Whites, Blacks, Hispanics and Asians have all done well over the last decade. For example, the median household net worth of a Black household with a four year degree or greater, increased by nearly 90% in just three years with the economic recovery from 2013 to 2016 (stocks and real-estate values). Educated Hispanic households saw a similarly outsized increased in their median net worth. The median net worth of an educated Black household, is now considerably higher than the median net worth in Germany or Sweden. The same is true for an educated Hispanic household. However, without that education level, Black households see a drop of ~83% in their median net worth figure. White households without a four year degree or greater, similarly see an ~80% drop in their median net worth. The average net worth of a White household without an education, was $367,000 as of 2016. With a bachelor's degree or higher, it was $1.8 million. Median was $98k vs $397k. The gains have mostly gone to educated households. That has produced an economic gain bias in favor of White and Asian households (which tend to have greater / easier access to higher education). That effect has pushed White and Asian households up the class bracket over the last four decades. This is fundamentally why the US middle class has been spinning its wheels. You're seeing White and Asian households move up and out of the middle class, and Hispanic households move in, while Black households have been stuck with only very modest progress. https://www.federalreserve.gov/econres/notes/feds-notes/recent-trends-in-wealth-holding-by-race-and-ethnicity-evidence-from-the-survey-of-consumer-finances-20170927.htm https://www.federalreserve.gov/econres/notes/feds-notes/rece...
- jorblumesea 7y ago
  It's not just about numbers, but also about income disparity. Upper class incomes are increasing faster than the lower and middle class. The upper class is also the only one who see any real income growth from 2000 - 2016, hinting at the underlying issues that the middle class faces. Jobs existing, but they no longer provide real wage growth or advancement opportunities they once did. In general, a wide gulf is forming between the upper and lower classes with the middle class being more aligned with the lower class as opposed to the upper class. If allowed to continue, this will essentially destroy the middle class in the long term, as they will eventually merge into either brackets. https://www.pewresearch.org/fact-tank/2018/09/06/the-american-middle-class-is-stable-in-size-but-losing-ground-financially-to-upper-income-families/ https://www.pewresearch.org/fact-tank/2018/09/06/the-america...
- Loughla 7y ago
  I hate to be that person, but I'm going to need some citations for that. After searching for 'intragenerational financial mobility' it seems that the US is awful at it. So, citations for your claims?
- adventured 7y ago
  Actualy the lower class has expanded by a few percentage points (it's not constant) due to the vast immigration of low skill workers from Latin America, while the middle class has (as you noted) been persistently moving up for decades (leading to the upper classes gaining a few percentage points). You can see this represented over the last ~40 years based on the demographics of each bracket. All one has to do is look at the Fed's current household reports on race when it comes to wealth and income, which lays all of this out in a clear manner. White and Asian households have heavily moved up out of the middle class, while Hispanic and Black households now dominate the bottom 50% of households on income and wealth. As recently as 1980, the US was only 6% Hispanic demographically. By 2000 that had doubled to 12%, and was at 16% in the 2010 census. Further to this point, the White demographic is now contracting. It's primarily the Hispanic demographic where population growth is occurring, and mostly via immigration. The big middle class question for the next 20 or 30 years, is whether the huge influx of people from Latin America into the US will be able to move up over time through education and skill acquisition, and whether Black households will similarly gain.
- munk-a 7y ago
  Citations please. This is contrary to the figures I've seen surrounding an expanding portion of the populace below the poverty line and increased income inequality.
1PlayerOne 7y ago
But but but... America is great again. The best president ever is in office.
- 1PlayerOne 7y ago
  To whomever downvote my comment: never heard of sarcasm?
  - munk-a 7y ago
    After this administration I hope we get to see some really interesting psychological studies on the sunk cost fallacy as applied to a political demagogue.
  - jryan49 7y ago
    The problem is your comment adds nothing to the conversation
  - whamlastxmas 7y ago
    As someone else said, it adds nothing and it's a tiresome sentiment.
    - 1PlayerOne 7y ago
      So what do you think is the ultimate cause of American wage stagnation?
      - whamlastxmas 7y ago
        I don't know, but if I had to guess it's a lack of regulatory framework to protect the rights of workers against corporate abuse, combined with modernization of many industries worldwide making US employees less competitive (valuable) on international terms.
Frost1x 7y ago
Yet people keep voting against their own interests and supporting behaviors that act against their own interests. With proper organization, the majority of Americans could force changes within a few weeks (peacefully) by rejecting the current system as it stands, forcing their concerns to be addressed. The continued belief and support of our system that incentivizes moral and ethically questionable behavior and disproportionately rewards a select few who are increasingly contributing less to society at large is toxic and self-perpetuating. It will ultimately lead to non-peaceful action by society at large so it's best to fix things before we get to that point.
- 1PlayerOne 7y ago
  Democracy is supposed to be a check on Capitalism's excesses but it requires an informed citizenry, so we are out of luck. The people are too easily fooled by charlatans and demagogues like Donald Trump.
  - salemh 7y ago
    The parent comment refers to decades of stagnate real wages. Interjecting Trump here is unhelpful.
    - 1PlayerOne 7y ago
      A minority of Americans that listening to and vote in charlatans and demagogues that legislate against their interest. Of which Trump is its ultimate expression. What do you think is the ultimate cause of wage stagnation then?
- munk-a 7y ago
  Sorta, it's also a broken political system. Polls about whether we should increase the stringency of background checks prior to gun ownership are overwhelmingly in favor of increased checks but nothing happens. In this case it's not a populace being tricked into expressing an interest in policy that harms them - it's politicians just outright ignoring the populace. I agree about the way this is going and, well, I've emigrated, I hope the rest of my family follows.

Real wages are dead flat for decades, everything else costs more so purchasing power is significantly reduced. The middle class is shrinking. For a lot of Americans it's a really bad time.

eanzenberg 7y ago

The American middle class is shrinking because the majority are moving into the upper class, while the lower class remains constant. There's plenty of reports on this, check out intragenerational financial mobility.

defterGoose 7y ago
So many reports that you didn't bother linking to one? I'm sorry, but this seems heinously misinformed given that our debt/equity ratio keeps growing.
- adventured 7y ago
  The Fed's figures indicate it's entirely correct. What's actually happening is an increased bifurcation of outcomes in the US based on race and education levels. Educated Whites, Blacks, Hispanics and Asians have all done well over the last decade. For example, the median household net worth of a Black household with a four year degree or greater, increased by nearly 90% in just three years with the economic recovery from 2013 to 2016 (stocks and real-estate values). Educated Hispanic households saw a similarly outsized increased in their median net worth. The median net worth of an educated Black household, is now considerably higher than the median net worth in Germany or Sweden. The same is true for an educated Hispanic household. However, without that education level, Black households see a drop of ~83% in their median net worth figure. White households without a four year degree or greater, similarly see an ~80% drop in their median net worth. The average net worth of a White household without an education, was $367,000 as of 2016. With a bachelor's degree or higher, it was $1.8 million. Median was $98k vs $397k. The gains have mostly gone to educated households. That has produced an economic gain bias in favor of White and Asian households (which tend to have greater / easier access to higher education). That effect has pushed White and Asian households up the class bracket over the last four decades. This is fundamentally why the US middle class has been spinning its wheels. You're seeing White and Asian households move up and out of the middle class, and Hispanic households move in, while Black households have been stuck with only very modest progress. https://www.federalreserve.gov/econres/notes/feds-notes/recent-trends-in-wealth-holding-by-race-and-ethnicity-evidence-from-the-survey-of-consumer-finances-20170927.htm https://www.federalreserve.gov/econres/notes/feds-notes/rece...
jorblumesea 7y ago
It's not just about numbers, but also about income disparity. Upper class incomes are increasing faster than the lower and middle class. The upper class is also the only one who see any real income growth from 2000 - 2016, hinting at the underlying issues that the middle class faces. Jobs existing, but they no longer provide real wage growth or advancement opportunities they once did. In general, a wide gulf is forming between the upper and lower classes with the middle class being more aligned with the lower class as opposed to the upper class. If allowed to continue, this will essentially destroy the middle class in the long term, as they will eventually merge into either brackets. https://www.pewresearch.org/fact-tank/2018/09/06/the-american-middle-class-is-stable-in-size-but-losing-ground-financially-to-upper-income-families/ https://www.pewresearch.org/fact-tank/2018/09/06/the-america...
Loughla 7y ago
I hate to be that person, but I'm going to need some citations for that. After searching for 'intragenerational financial mobility' it seems that the US is awful at it. So, citations for your claims?
adventured 7y ago
Actualy the lower class has expanded by a few percentage points (it's not constant) due to the vast immigration of low skill workers from Latin America, while the middle class has (as you noted) been persistently moving up for decades (leading to the upper classes gaining a few percentage points). You can see this represented over the last ~40 years based on the demographics of each bracket. All one has to do is look at the Fed's current household reports on race when it comes to wealth and income, which lays all of this out in a clear manner. White and Asian households have heavily moved up out of the middle class, while Hispanic and Black households now dominate the bottom 50% of households on income and wealth. As recently as 1980, the US was only 6% Hispanic demographically. By 2000 that had doubled to 12%, and was at 16% in the 2010 census. Further to this point, the White demographic is now contracting. It's primarily the Hispanic demographic where population growth is occurring, and mostly via immigration. The big middle class question for the next 20 or 30 years, is whether the huge influx of people from Latin America into the US will be able to move up over time through education and skill acquisition, and whether Black households will similarly gain.
munk-a 7y ago
Citations please. This is contrary to the figures I've seen surrounding an expanding portion of the populace below the poverty line and increased income inequality.

1PlayerOne 7y ago

But but but... America is great again. The best president ever is in office.

1PlayerOne 7y ago
To whomever downvote my comment: never heard of sarcasm?
- munk-a 7y ago
  After this administration I hope we get to see some really interesting psychological studies on the sunk cost fallacy as applied to a political demagogue.
- jryan49 7y ago
  The problem is your comment adds nothing to the conversation
- whamlastxmas 7y ago
  As someone else said, it adds nothing and it's a tiresome sentiment.
  - 1PlayerOne 7y ago
    So what do you think is the ultimate cause of American wage stagnation?
    - whamlastxmas 7y ago
      I don't know, but if I had to guess it's a lack of regulatory framework to protect the rights of workers against corporate abuse, combined with modernization of many industries worldwide making US employees less competitive (valuable) on international terms.

Frost1x 7y ago

Yet people keep voting against their own interests and supporting behaviors that act against their own interests. With proper organization, the majority of Americans could force changes within a few weeks (peacefully) by rejecting the current system as it stands, forcing their concerns to be addressed. The continued belief and support of our system that incentivizes moral and ethically questionable behavior and disproportionately rewards a select few who are increasingly contributing less to society at large is toxic and self-perpetuating. It will ultimately lead to non-peaceful action by society at large so it's best to fix things before we get to that point.

1PlayerOne 7y ago
Democracy is supposed to be a check on Capitalism's excesses but it requires an informed citizenry, so we are out of luck. The people are too easily fooled by charlatans and demagogues like Donald Trump.
- salemh 7y ago
  The parent comment refers to decades of stagnate real wages. Interjecting Trump here is unhelpful.
  - 1PlayerOne 7y ago
    A minority of Americans that listening to and vote in charlatans and demagogues that legislate against their interest. Of which Trump is its ultimate expression. What do you think is the ultimate cause of wage stagnation then?
munk-a 7y ago
Sorta, it's also a broken political system. Polls about whether we should increase the stringency of background checks prior to gun ownership are overwhelmingly in favor of increased checks but nothing happens. In this case it's not a populace being tricked into expressing an interest in policy that harms them - it's politicians just outright ignoring the populace. I agree about the way this is going and, well, I've emigrated, I hope the rest of my family follows.