You’ll Never Believe the Reason Why the Middle Class is Shrinking

Susanne.Posel-Headline.News.Official- middle.class.rose.increase.income.college.education_occupycorporatismSusanne Posel ,Chief Editor Occupy Corporatism | Media Spokesperson, HEALTH MAX Group

 

Stephen Rose, labor economist with the Urban Institute, has released a paper on the real reason why the middle class is shrinking in America.

Rose explains that the middle class has been going through a makeover and moving on up to the richer side with economic growth attributed to increasingly college educated citizens joining the workforce.

rose.middle.class.shrinking.01_occupycorporatismFor the purpose of this study, the middle class was defined as households with incomes of between one hundred thousand to three hundred and fifty thousand per year.

This group of Americans represented nearly thirteen percent of the US population in 1979, but they have swelled in size averaging nearly thirty percent as of 2014.

These Americans control half of the income in this country, mostly because their numbers have spiked by eleven percent in the last forty-one years.

Rose said this new middle class is college-educated; with six out of ten of them having earned at least a bachelor’s or graduate degree. Another interesting feature is this group is mostly white and married.

For perspective, lower class Americans earn an average of up to twenty-nine thousand annually while lower-middle class counterparts earn between thirty and forty-nine thousand. Midway through middle class members earn between fifty and ninety-nine thousand.

And while this sounds like a big divide, these three classes have been falling behind financially in the last four decades.

rose.middle.class.shrinking.02_occupycorporatismAt the end of the 1970s, the lower middle class controlled seventy percent of the nation’s incomes; however during the 80s and 90s that all changed.

The Pew Research Center discovered earlier this year that the middle class in America was shrinking because annual incomes allowed a substantial percentage of this group to move up income with the average earning reaching $125,000 for a family of three.

Journalist Tim Worstall put it this way: “The truth is that the American middle class is shrinking. But the major cause of this is that large parts of the population are simply becoming too rich to be considered middle class any more. And I think that’s great. I cannot bring myself to complain about 30% of Americans now living better and richer lives than their forbears did.”

Rose attributes the rise of Bernie Sanders and Donald Trump to this disenfranchisement and hostility of the lower middle class who have been left behind because of a lack of education which directly effects their ability to earn more annually.

He wrote: “People in the middle class interact more with the upper middle class than they do with the very rich, and they may have stronger feelings of losing ground to the upper middle class versus their feelings about the inequality due to the huge income increases of those in the top one-tenth of 1% of the income ladder.”

Top earners in the US just three years ago took home a mere $428,713. This is the 1% that we all despise so much.

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