The Alleged Decline of America's Middle Class

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The Alleged Decline of America

An article in The Huffington Post1 recently pointed out that the top one percent of Americans — in financial terms — enjoyed more than 60 percent of the gains in income in the past few years.  Around the same time, the Business Insider2 ran this headline:  "The Middle Class in America Is Radically Shrinking.  Here Are the Stats to Prove it." 

The article, which claimed to prove its assertion "beyond a shadow of a doubt," cited statistics like these: 

  • More than 80 percent of equities in the U.S. are held by 1 percent of the people.
  • More than 60 percent of Americans live paycheck-to-paycheck.
  • Almost 70 percent of the growth of income between 2001 and 2007 went to the richest 1 percent of people in the U.S.
  • In 1950, big company CEOs earned about 30 times the average employee's income.  Today, the ratio is between 300 and 500 times.
  • The poorest half of the country owns less than 1 percent of the nation's wealth.
  • The richest 1 percent of Americans have seen their wealth double in the last 15 years.
  • Forty million Americans are on food stamps. 

The writer's conclusion:  The American middle class is dying. 

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The New York Times3 also did a lengthy piece on the death of the middle class just before the recession hit.  It centered on the loss of the $20-an-hour wage for blue collar workers — or its equivalent, adjusted for inflation — which was introduced broadly across the country starting with the end of World War II.  That wage, negotiated by unions, meant that high school graduates — or even people with less education — could look forward to owning homes and cars and sending their kids to college.  Beyond that, they could also look forward to retiring in comfort. 

That wage standard began in the auto industry in 1948 and continued its advance until the 1970s.  After that, the number of people who earned at least that much declined, and by 2007 it was only 18 percent of all workers.  Between 1979 and 2008, workers earning $20 an hour or more in manufacturing declined by almost 60 percent, according to the Bureau of Labor Statistics.

In 2007, American auto makers bought out 80,000 employees who were earning $20 an hour or more and replaced them with lower wage workers who will probably never earn that much — or have the same benefits.  They bought out another 25,000 in 2008.  That effectively ended the 60-year reign of the United Auto Workers, a monument to the American middle class...

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