THE MIDDLE CLASS IS SHRINKING
A Pew research study has found that the share of adults living in middle-income households in the US dropped from 62% to 59% from 1991 to 2010. The US share was the smallest of the countries studied. At the same time the middle class share rose in the Netherlands, France, Ireland, and the UK.
MIDDLE CLASS INCOME IS STAGNANT
Even though the US economy is steadily growing, middle class wages have stagnated, while the income of the richest Americans has shot up as is shown by the chart below.
MIDDLE CLASS ASSETS ARE STAGNANT
Middle class assets have only grown slightly for the upper middle class and not at all for the lower middle class, as is shown by the following chart.
Middle Class Wealth
In contrast, to middle class wealth stagnation, wealth has shot up for the richest Americans, as the following chart shows. The average wealth for the Forbes 400, the richest of the rich has shot up. In 1982 the average wealth for an individual in the Forbes 400 was $230 million. Today it is $6 billion, or 26 times as much as it was in 1982.
Wealth of Income Groups
OPPORTUNITY FOR MIDDLE CLASS KIDS IS VANISHING
Smaller percentages of US kids are growing up with better prospects than their parents. This is so even though overall US income is increasing. If income gains were shared equally among income classes all children born in 1975 should have had an income that was 1.8 times their parent’s income, all else being equal. But according to the Equality of Opportunity Project, 90% of children born in 1940 earned more than their parents but only 50 % of children born in the 1980’s did so. The largest declines were for middle class families. The Equality of Opportunity Project links much of the decline in upward mobility to increasing economic inequality. An NBC/Wall Street Journal Poll found that the percentage of Americans who believed their children would be better off dropped from 33 % to 21% from 2007 to 2014.
MIDDLE CLASS SAFETY NETS ARE IN DANGER
The Trump tax cuts have increased the US deficit. To reduce that deficit some so called “deficit hawks” are proposing entitlement reform. The danger to the middle class from these proposals is that Medicare, Medicaid, and Social Security may be gutted, even though the US economy has ample growth to cover the costs of these programs if tax breaks for the .1% are cut.