The American Middle-Class is Shrinking
- Thread starter Padawanbater2
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Harrekin
Well-Known Member
I didn't read that...-In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined
-While the share of U.S. adults living in both upper- and lower-income households rose alongside the declining share in the middle from 1971 to 2015, the share in the upper-income tier grew more.
-Fully 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. The share accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.
-In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.
-In 2015, 20% of American adults were in the lowest-income tier, up from 16% in 1971. On the opposite side, 9% are in the highest-income tier, more than double the 4% share in 1971.
-In this study, which examines the changing size, demographic composition and economic fortunes of the American middle class, “middle-income” Americans are defined as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three.3 Under this definition, the middle class made up 50% of the U.S. adult population in 2015, down from 61% in 1971.
-Although the middle class has not kept pace with upper-income households, its median income, adjusted for household size, has risen over the long haul, increasing 34% since 1970. That is not as strong as the 47% increase in income for upper-income households, though it is greater than the 28% increase among lower-income households.
-Moreover, some demographic groups have fared better than others in moving up the income tiers, while some groups have slipped down the ladder. The groups making notable progress include older Americans, married couples and blacks. Despite this progress, older Americans and blacks remain more likely to be lower income and less likely to be upper income than adults overall. Those Americans without a college degree stand out as experiencing a substantial loss in economic status.
-In addition to changes in the size and economic standing of the American middle class, its demographic profile has changed significantly in recent decades. Some of the changes reflect long-term demographic trends in the U.S., as the middle class is in many ways a mirror of the broader population. For example, the aging of the country, the growing racial and ethnic diversity, the decline in marriage rates and the overall rise in educational attainment are all reflected in the changing composition of the middle class.
"The Middle-Class Shrinks
The hollowing of the American middle class has proceeded steadily for more than four decades. Since 1971, each decade has ended with a smaller share of adults living in middle-income households than at the beginning of the decade, and no single decade stands out as having triggered or hastened the decline in the middle.
Based on the definition used in this report, the share of American adults living in middle-income households has fallen from 61% in 1971 to 50% in 2015. The share living in the upper-income tier rose from 14% to 21% over the same period. Meanwhile, the share in the lower-income tier increased from 25% to 29%. Notably, the 7 percentage point increase in the share at the top is nearly double the 4 percentage point increase at the bottom.
The rising share of adults in the lower- and upper-income tiers is at the farthest points of the income distribution, distant from the vicinity of the middle. The share of American adults in the lowest-income tier rose from 16% in 1971 to 20% in 2015. Over the same period, the share of American adults in lower-middle income households did not change, holding at 9%.
The growth at the top is similarly skewed. The share of adults in highest-income households more than doubled, from 4% in 1971 to 9% in 2015. But the increase in the share in upper-middle income households was modest, rising from 10% to 12%. Thus, the closer look at the shift out of the middle reveals that a deeper polarization is underway in the American economy."
"Trends in Wealth
The Great Recession of 2007-09, which caused the latest downturn in incomes, had an even greater impact on the wealth (assets minus debts) of families. The losses were so large that only upper-income families realized notable gains in wealth over the span of 30 years from 1983 to 2013 (the period for which data on wealth are available).
Before the onset of the Great Recession, the median wealth of middle-income families increased from $95,879 in 1983 to $161,050 in 2007, a gain of 68%. But the economic downturn eliminated that gain almost entirely. By 2010, the median wealth of middle-income families had fallen to about $98,000, where it still stood in 2013.
Upper-income families more than doubled their wealth from 1983 to 2007 as it climbed from $323,402 to $729,980. Despite losses during the recession, these families recovered somewhat since 2010 and had a median wealth of $650,074 in 2013, about double their wealth in 1983.
The disparate trends in the wealth of middle-income and upper-income families are due to the fact that housing assumes a greater role in the portfolios of middle-income families. The crash in the housing market that preceded the Great Recession was more severe and of longer duration than the turmoil in the stock market. Thus, the portfolios of upper-income families performed better than the portfolios of middle-income families from 2007 to 2013. When all is said and done, upper-income families, which had three times as much wealth as middle-income families in 1983, had seven times as much in 2013."
"Demographic Winners and Losers
As the middle has hollowed, some demographic groups have been more likely to advance up the income tiers (winners) while others were more likely to retreat down the economic ladder (losers).
Nationally, the share of adults in the upper-income tier increased from 14% in 1971 to 21% in 2015, a gain of 7 percentage points. Meanwhile, the share of adults in the lower-income tier also rose, from 25% to 29%, an increase of 4 percentage points. The difference – 3 percentage points – is the net gain for American adults. By the same measure, the net gain in economic status varied across demographic groups.
The biggest winners since 1971 are people 65 and older. This age group was the only one that had a smaller share in the lower-income tier in 2015 than in 1971. Not coincidentally, the poverty rate among people 65 and older fell from 24.6% in 1970 to 10% in 2014. Evidence shows that rising Social Security benefits have played a key role in improving the economic status of older adults. The youngest adults, ages 18 to 29, are among the notable losers with a significant rise in their share in the lower-income tiers.
The economic status of adults with a bachelor’s degree changed little from 1971 to 2015, meaning that similar shares of these adults were lower-, middle- or upper-income in those two years. Those without a bachelor’s degree tumbled down the income tiers, however. Among the various demographic groups examined, adults with no more than a high school diploma lost the most ground economically.
Winners also include married adults, especially couples where both work. On the flip side, being unmarried is associated with an economic loss. This coincides with a period in which marriage overall is on the decline but is increasingly linked to higher educational attainment.
Gains for women edged out gains for men, a reflection of their streaming into the labor force in greater numbers in the past four decades, their educational attainment rising faster than among men, and the narrowing of the gender wage gap.
Among racial and ethnic groups, blacks and whites came out winners, but Hispanics slipped down the ladder. Although blacks advanced in income status, they are still more likely to be lower income and less likely to be upper income than whites or adults overall. For Hispanics, the overall loss in income status reflects the rising share of lower-earning immigrants in the adult population, from 29% in 1970 to 49% in 2015. Considered separately, both U.S.-born and foreign-born Hispanics edged up the economic tiers."
Padawanbater2
Well-Known Member
Seeing as the data begins at 1970 and 1971, and the income and wealth inequality issue has been worsening ever since, I'd say it's pretty clear it's a structural problem that includes mistakes in policy by both political parties. The problem - as has been discussed over many different threads - is supply-side economics. Giving tax breaks to the upper-class and cutting social safety net programs for the poor and middle-class. Contractionary fiscal policy.
And like I said in the OP - the evidence continues to mount
Padawanbater2
Well-Known Member
That's the part I would like you to explain. How do you plan on taking any power away from legislators without addressing campaign finance first?
NLXSK1
Well-Known Member
Rewrite the tax code....
NLXSK1
Well-Known Member
Could you point us to where in the constitution it outlines the proper distribution of wealth in society? I have not been able to find it.
Padawanbater2
Well-Known Member
Rewrite the tax code to what, and how would that take power away from politicians?
Could you point us to where in the constitution it outlines the legality of abortion or drug use?
NLXSK1
Well-Known Member
The constitution is a document that limits the power of government or at least that was the design of it. Therefore, it doesnt say anything about either one.
Padawanbater2
Well-Known Member
The constitution was designed to outline how American government would operate after the articles of confederation became too weak to be effective. It was meant to give the federal government more power
How would changing the tax codes take power away from politicians?
NLXSK1
Well-Known Member
They couldnt rewrite the tax code to benefit their lobbiest friends. The reason the tax code is 3000+ pages is due to exactly that.
Padawanbater2
Well-Known Member
Lobbyist's lobby congress for corporate interests via completely legal campaign contributions, then politicians pass legislation that benefits that industry. So I don't understand how changing tax codes would solve the problem. I think it's clear we have to limit the amount of money special interests can give to political campaigns in order to limit the influence they have over politicians.
NLXSK1
Well-Known Member
If you reduced the amount of influence politicians had over businesses then they would not be motivated to donate so much money...
Why do you condone the legislators doing favors for the corporations? You seem to be mad at the wrong group of people....
ttystikk
Well-Known Member
Shit, lobbyists aren't even half the problem. Now, SuperPACs can shovel money into campaign coffers and spend directly in support of and in coordination with presidential candidates. This is the new frontier, where the likes of Sheldon Adelson and the Koch brothers spend hundreds of millions of (tax deductible?!) dollars on whomever they'd like to nominate to be King, commoners' preferences be damned.
I don't care which side of the political aisle you identify with, that's criminal, despicable, treasonous behavior in any political system that fancies itself to be responsive to the will of the majority... and the politicians who legalized this blatant power grab from We the People should stand in the dock with them.
Padawanbater2
Well-Known Member
HOW DO YOU DO THAT?????
You don't seem to understand what I'm asking you
ttystikk
Well-Known Member
By eliminating the flow of any and all money into politics, period. It's the only way. Why would be otherwise? It's a completely corrupting influence and we all know it!
NLXSK1
Well-Known Member
And you dont understand if we had a flat tax code for individuals and corporations of say 20% then businesses would not have any incentive to donate to either party's campaigns regarding the tax code. You do not understand that?
Businesses are not paying billions of dollars to the politicians because they want to, it is legal extortion. If your business gets big enough and doesnt contribute then the lawmakers start to come after you. Just ask Microsoft after what the government did to them.... Well, until they became a huge political donor.
Why are you not holding your government officials to higher standards? You let them accept legal bribes that they allow, condone and made legal by law and you are angry at the people they are extorting...
Again, why are you angry at the wrong people?
Uncle Ben
Well-Known Member
Gotta add my two cents to this one. I'm old enough to have watched Bill Gates go from a nothing to a billionaire, and I saw how he got there - theft of intellectual property. We're talking the days when it was IBM's DOS operating system and Digital Research's DOS OS. Microsoft was created and the rest is history. Bit by bit he stole other corporation's intellectual property - the Windows multi-tasking concept from Apple, a browser (Internet Explorer) from Mozilla Netscape, security software, de-frag and other utilities from PC Tools, Word from Wordperfect, Excel from Lotus 1-2-3....I could go on and on. He set up an empire where no one could or would want to compete.
The feds tried unsuccessfully to make Gates un-brand or un-link Internet Explorer from the Windows OS.....Gates using the bullshit that Windows wouldn't run without it, by design of course. Gates was shrewd enough to know, or at least THINK, that if you controlled the internet you "controlled the world". IE is still tied to Windows and you can't delete it without completely bringing down your operating system. Bottom line? In spite of the Gate's anti-competitive engineering, all the anti-trust suits brought on by the courts, Gates won. He beat the system.
end of rant.......
ChesusRice
Well-Known Member
So will the Republucan candidates push for eliminating the mortgage interest deduction again?