Is the "Middle Class" shrinking?? T. Snark wrote > Many people have made definitions of the middle class. .... > Since you seem to want some numbers I'll say between 24k and > 75k would be middle class. Split it down the middle for upper and > lower. Hi, 24k to 75k of annual dollar income? Good answer. That is probably about what most people in the US mean by "middle class". It closely corresponds to the middle 3 family income quintiles. Note that if you selected family incomes from $21,600 to $83,693 that would exactly match the middle 60% of US family incomes. Your figures just trim off a few of the lowest and highest families from that middle 60%. Note also that Mike Coburn defined "middle class" in a completely different way. Not based in incomes but by "single income families" (or is that single income households?). By HIS definition, the US (and also other industrial nations) have a shrinking middle class as more women enter the workforce. By Mike's definition, India and Haiti probably have a larger "middle class" than the USA. IS THE MIDDLE CLASS SHRINKING? By your definition, the US middle class is a larger fraction of the population today than it was in 1950. To see this, correct your figures to 1950 dollars using the Consumer Price Index. This corresponds to a family income from $3,531 to $11,035. Your "middle of the middle class" (mid-range) income of $49,500 would correspond to a 1950 income of $7283. Note that this would put a family well into the top income quintile in 1950. Your "bottom of the middle class" income of $24 k in 1999 would be nearly into the fourth (i.e., second from top) quintile in 1950. >.....Unfortunately, the massive middle class of > the 1950'-1970's was a phenomena that was rather unusual in history. But by YOUR definition, it is larger now than then. Look at this yet another way. Take that 1950 "middle class" to be the middle 60% of the population: the middle 3 income quintiles. That was the families with incomes from $1,661 to $5,283. Now compare those incomes to today, correcting for inflation. The equivalent constant dollar incomes in 1999 would be from $11,289 to $35,907. Thus the entire "middle class" of 1950 would now be in the lower two income quintiles in 1999. The mid-range of the 1950 "middle class" was (1661+5283)/2 = $3,472 correcting that to 1999 dollars gives $23,598 which is below your defintion of "middle class" today. To check all of my figures, see the link to "The Inflation (CPI) Calculator: Different Times" at: http://www.geocities.com/capitolhill/4834/cpi.htm and Historic Tables of Family Incomes at http://www.geocities.com/capitolhill/4834/avg.htm Is the CPI correction for inflation accurate? Probably not, but the error is considered to be in the "other direction": it overestimates inflation, and the current incomes are even higher relative to those in the past. See the BOSKIN REPORT items on the MONEY web page. If you want to define the "middle class" as the current middle three income quintiles, then it will always be 60% of the population. > When it comes to buying power, small stuff is still cheap. ... Yes it is. > However the larger items a family would like has jumped way more than > most incomes. Take housing. In many areas homes are going for far > above the means of someone making two or three times the minimum wage. > Many people now have two incomes to pull this trick off. 2-$20k jobs > make a $40k of income. (wow, that household looks middle class!) And so it is. By your definition. >......So > that takes care of the $40k house that now sells for $80k. There's > only one problem. Both work where only one used to need to. If you > don't believe this is a problem, next Monday I'll call your supervisor > and tell him/her you will be happy to work 80 hours a week instead of > 40 for the same paycheck you had last week. Still not a problem? ???? Do wives work because they "need to"? Ever heard of Womens Liberation? See: http://www.geocities.com/capitolhill/4834/wwives.txt And the question here is not me working 80 hours a week, but rather you tell your wife to quit here job and stay home because you decided that you two should live like a 1950's family. (If you have a wife, be ready to duck) ....... > Speaking of this, how many hours does the burger flipper need to work > to afford his meal? I recall the minimum wage 10 years ago was > 3.35/hr. A McDonalds whopper "meal" with a soda and fries was 2.25 (I > ate enough of them one summer to know). Now the same whopper "meal" > is 4.85 and we'll call a McDonalds worker (on night shift) able to > pull $7/hr. It's still a small decline. Your references to the federal minimum wage are not relevant because the minimum wage is not relevant. Do you think that if the minimum wage law repealed, wages would fall to zero? If you want to compare the time a worker must work to buy various items, see WAS THE PAST CHEAPER? and HOW FAST IS MODERN ECONOMIC GROWTH? (on my MONEY page) > Education, while never cheap is going up. Yes. But the fraction of the population that graduates from high school and college continues to increase. > So you actually ENJOY spending more in time and money on education > rather than something else? OK. Maybe you ivory tower types do. Actually I do enjoy learning new things. >.... The higher paying manufacturing industries are >being replaced by lower paying "service" jobs. Factory jobs are being replaced by service and information jobs. Just like farm jobs were replaced by factory jobs a century age. And its a good thing, too. > If we kept our productive ability like we kept our farming ability - I > would agree. Yet we didn't. You don't think that US productivity is not at an all time high? And that it is not increasing? >.....We are losing the skills to even make > industrial goods! Before, we MADE the things we now only talk about > in academic settings. We "make more things" than ever, but with fewer people. Because of automation and robots and technology. >.....Industry after industry has left our shores from > VCR's, TV's and calculators to Microwave ovens. Other countries now make things too. Is that BAD? >>.....Class stratification is happening and the underclass is >> growing - ????? What data supports either of these claims? Define what you mean by "underclass" and explain why it is larger now (as a percent) than in 1990. Or than in 1970, or than in 1870. > Not lower than 1870. That was the age of robber barons where the top > 1% controlled more than 50% of the nation's wealth. Just wait a bit - > we may get there again. Ah, so like that BIG CRASH, the loss of the middle class is not "here" but "on the horizon"? > A great deal of the world's history was more like feudalism with a few > very rich and many desperately poor. I agree. Also explain why the "underclass" grows while the welfare rolls shrink, and all of the income quintiles gain in constant dollars. >I don't think a buck buys what it used to. How are >you accounting for inflation again? Consumer Price Index. And that is an overcorrection. >.....America's middle class > doesn't realize it is gradually being bred out. Explain what that means. I mean I know the "middle class" does not realize that is is being "bred out". But what would it mean for the "middle class" to "bred out"??? > To breed, to procreate, to have kids. Many people born into the > middle class in this country are choosing not to have kids. Yes, the US birth rate is falling. Same for Europe and Japan. And also for most third world countries as they develop economically. Is that BAD? Gee, I can remember when people worried about overpopulation, and thought lower birthrates would be a GOOD THING. How times change. But do you think the birthrate in the US is lower for the "middle class (your definition) than for the "rich" (top income quintile)?? -- ,,,,,,, _______________ooo___(_O O_)___ooo_______________ (_) jim blair (jeblair@facstaff.wisc.edu) For a good time call http://www.geocities.com/capitolhill/4834 AND FINALLY SOME DATA, FOR THE USA: Real disposable per capita income, 2001: $23,840 Real disposable per capita income, 1990: $19,889 Real disposable per capita income, 1980: $16,186 Real disposable per capita income, 1970: $12,849 Real DPI: http://www.stls.frb.org/fred/data/gdp/dpic96 Population: http://www.stls.frb.org/fred/data/employ/pop Real DPI per worker, 2001: $48,512 Real DPI per worker, 1990: $42,253 Real DPI per worker, 1980: $37,166 Real DPI per worker, 1970: $33,718 Real DPI: http://www.stls.frb.org/fred/data/gdp/dpic96 Employment: http://www.stls.frb.org/fred/data/employ/ce16ov "Real" here means correct for inflation by the Consumer Price Index, and "disposable" means after taxes.