Is The "Middle Class" Dead?

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I really have to shout something from the rooftops. Way too many people have bought into the re-definition of what "middle class" is. Simply put, true "middle class" is historically defined as a one-income family being able to buy a home, a car and support a family. Surprised? You shouldn't be. This was the definition of the vast majority of households here in the U.S. for many years. If you are not old enough to remember, just watch some of the popular TV shows from the 50's and 60's and even the early 70's.

What we used to call "middle class" is now more accurately a "working class" on steroids. Currently, most households need at least two or more incomes to provide for their families. They do have more stuff; mostly from China, a bigger home and additional (bigger) cars, but are in debt up to the eyeballs. How did we get here?

Somewhere in the sensuous decade of the 80's; amidst the birth of Reaganomics and the growing trend of building malls, suburbia, and becoming overly materialistic....this notion that we need to have two incomes to "keep up" became more and more popular. Then in the prosperous 90's ...the trend went viral. So many people wanted "the good life" and used their homes as an ATM machine to buy bigger and more expensive homes. These and other major factors caused inordinate demand on (centrally located, yet decent neighborhood) housing which continued to inflate and pervert the market...."and the band played on"....

The need for a two-income family became a firmly established norm in the ever further spreading of the seemingly endless suburban sprawl. In many of the most expensive cities, by now, even two incomes were really not sufficient. Many people rented out rooms in their, now bigger homes, for the income they now needed to finance the economic insanity of urban America. This also has helped people like me, who hate apartments and I save a little money on rent!

I blame a significant part of the economic chaos of housing in urban America on our regressive tax policies, or not having a progressive real estate tax to help curb the artificial inflation and greedy speculation. I now just need to state that generally, it has been conservative, anti-labor policies of union busting, shipping jobs overseas, and the deregulation of the financial market that has decimated what was left of the "middle class". In my opinion, there is such a tiny, true middle class that we should just pronounce it "dead" circa the market crash of 2008 and the widest income gap seen in this country for almost 80 years!

When any liberal talks as if there is a "middle class", by even using this term; it weakens the cause to show how it was ALREADY dismantled completely by Reagan, and both Bush administrations. Please, enough damage has already been done! Let's make up our own terms that are appropriate for the new strata of classes which have been birthed out this economic nightmare caused by delusional "conservatives" which we accept as normal now.

jcgood1984's picture
jcgood1984
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Aug. 3, 2011 9:17 am

Comments

You are probably right. The perpetuation of the myth that is the middle class is in part because people done like to identify with the working class or the poor. Those are uncomfortable realities that the media and politicians rather not remind society of.

Great post.

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Russ Brewer
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Nov. 24, 2010 11:48 am

Good post. Makes me think...

micahjr34
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Feb. 7, 2011 3:57 pm

Health costs were rising fast even in the seventies. That's an important part of the decline of the Middle Class, the increasing power given to certain professions, medicine, law, finance. And the worst part is, we don't even question it. We just call them "the smart people." We don't ask why these people make the big money, and other smart people are living on the edge.

As to health costs: We used to spend 5% of GDP on health care in 1960. But in just eight years it will be pushing 20% (in 2019). And it's not because insurance companies are taking home more and more.

We need to talk about these costs, because if we don't the Super Comittee will just cut back access.

Of course I appreciate your concern with the problem of crazy real estate values. If more people had raised this issue five or six years ago, there'd be a LOT less suffering now.

Sumire's picture
Sumire
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Jul. 2, 2011 6:44 am

JCGOOD1984 writes:

"If you are not old enough to remember, just watch some of the popular TV shows from the 50's and 60's and even the early 70's. "

Did you really write that, or am I on an episode of the Twighlight Zone?

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Dr. Econ
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Jul. 31, 2007 3:01 pm

I bought my first house in the 60's.while earning minimum wage...in Los Angeles. Even back then, L.A... wasn't known as a cheap housing area. I bought a new imported sports car in the same year...an MG Midget.

While keeping up with illusory Jones's had something to do with the middle class being in dire straits, so did declining wages levels in relation to rising prices..

I know a previous middle class family who now earns their living by salvaging trash from dumpsters. Competition has gotten so fierce, their income has declined by 2/3. in the past month. Can anyone provide more dumpsters? There aren't enough to go around..

I'm curious. Just where in the class ratings do we place the increasing Dumpster Class?

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 3:01 pm

Good insight, thanks. Greed Kills!

On a vacation in Australia, I had wonderful experience with 2 doctors and a technician. It was like it used to be when I was a kid. You could show up without an appointment and pay cash. It was only $40! And the best doctors ever.

If I was young, that's probably where I'd move to. They have a really strong dollar and so many people were nice to me. I did not want to leave.

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jcgood1984
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Aug. 3, 2011 9:17 am

If I were young I'd move to Scandinavia. They have double our wages and you simply walk into a Dr.'s office and pay nothing. Min. wage in Denmark is $16 an hour.

Retired Monk - "Ideology is a disease".

polycarp2
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Jul. 31, 2007 3:01 pm
Quote Sumire:Health costs were rising fast even in the seventies. That's an important part of the decline of the Middle Class, the increasing power given to certain professions, medicine, law, finance. And the worst part is, we don't even question it. We just call them "the smart people." We don't ask why these people make the big money, and other smart people are living on the edge.

Quite right. An uneducated, unskilled person could earn decent wages in the 1950s or 1960s. Uneducated, unskilled Americans today are in a desperate situation.

The so-called "decline of the U.S. middle class" is the other side of the "postwar recovery of our economic competitors" coin. The Americans minted that coin with the Marshall Plan in 1947. Economic recovery abroad was entirely intended, predictable, and natural.

Ixtelan's picture
Ixtelan
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Jul. 31, 2007 3:01 pm

This is a link to a list of the world's top cities rated for quality of urban life.

http://www.citymayors.com/features/quality_survey.html#Anchor-The-49575

Notice that all the top 29 are ALL in Western Europe, Canada, Australia, and New Zealand.....one cannot ignore the progressive connection

I have traveled to most of these cities...You really cannot see the propaganda of American Fascism until you travel abroad where they just do...Urban...way better...

In American arrogance, we fail to follow clearly successful models in these countries....thinking that we can do it better...really?

Yeah, how has that worked out. For every 1 murder per capita in Norway there is over 5.2 (mass murder) here.

It's sad that we call ...a murder a day.... in a big, blighted city here, "normal"......hello?

jcgood1984's picture
jcgood1984
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Aug. 3, 2011 9:17 am
Quote jcgood1984:In American arrogance, we fail to follow clearly successful models in these countries....thinking that we can do it better...really?

American arrogance is undoubtedly a big part of the problem. On the other hand, the wartime damage to Europe was a mixed curse. Much of Europe's infrastructure today was built after the war and is relatively newer than the 1930s, W.P.A. crap that we still use in the United States. Economic leapfrogging is sometimes the bright side of economic ruination.

Ixtelan's picture
Ixtelan
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Jul. 31, 2007 3:01 pm

Let the good times roll. Somplace else.

Quote N.Y. Times:But step back from events this month, this year or even this decade, and a more ominous portrait comes into focus.

It shows an American economy under ever-increasing competitive pressure, demographic trends making those pressures more acute and a voting public facing repeated disappointment as it yearns for better times.

That disappointment may represent the long-term political consequence of a financial crisis and recession that has forced the nation to finally come to terms with its economic vulnerability.

For a generation, “our economy has been, for the majority of people, a slow-growth economy,” said Robert D. Reischauer, who was the director of the Congressional Budget Office in the early 1990s. “But our standards of living have improved much more, due to some factors that can’t and won’t be repeated.” ...

Then and Now

Any American economy would suffer compared with the one that emerged as a dominant force after World War II. In 1960, according to the World Bank, the United States accounted for 39 percent of global economic output.

Millions of soldiers came home to attend college under the G.I. Bill, lifting worker productivity and expanding the suburban middle class. Annual economic growth topped 5 percent four times each in the 1950s, ’60s and ’70s.

Those trend lines eventually turned down. But changes in American society helped mask the effects.

While international competition shrank the American share of the global economy, women poured into the work force and gave more and more families two breadwinners instead of one.

While men’s median income declined slightly between 1970 and 1990, the median income for women rose nearly 50 percent. So household income rose.

While overall growth slowed — the economy expanded at least 5 percent in a year just once in the 1980s, and not since — so did the rate at which Americans had children. Smaller families stretched family incomes further.

And as increases in education and the number of women in the work force reached a plateau, cheap and easy credit encouraged Americans to consume more. So did the “wealth effect” from the Internet-fueled stock market of the 1990s, and the real estate boom after that.

N.Y. Times

Ixtelan's picture
Ixtelan
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Jul. 31, 2007 3:01 pm

The twits in charge don't get that a nation relying on consumer credit rather than wages to keep an economy running reaches a dead-end.. People reach an inability to pay for more debt.

Retired Monk - "Ideology is a disease".

polycarp2
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Jul. 31, 2007 3:01 pm

My question is ....at what point will those "twits" get it? Do we have to collapse and decline and regress back to the 1800's...when we had to have child labor, no collective bargaining, no minimum wage?...they have already killed middle class dead!

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jcgood1984
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Aug. 3, 2011 9:17 am

Those with cash to invest and who are willing to accept risky investments in order to achieve high-yield returns have better places to put their money than the United States.

Ixtelan's picture
Ixtelan
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Jul. 31, 2007 3:01 pm

I'm investing in Australia...the value of their dollar against the U.S dollar has gone from around 70ish% of USD to current 105% of USD in TWO YEARS !!!!!...Plus it's in my top 5 best country list ...for too many reasons...i will have to write a book..lol

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jcgood1984
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Aug. 3, 2011 9:17 am

The Chinese are finding places to unload their excess U.S. dollars:

Quote N.Y. Times:As Investors, Chinese Turn to New York

in the past year. Investors from China are snapping up luxury apartments and planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies have signed major leases at the Empire State Building and at 1 World Trade Center, which is the centerpiece of the rebuilding at ground zero.

http://www.nytimes.com/2011/08/11/nyregion/chinese-investment-grows-in-n...

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Ixtelan
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Jul. 31, 2007 3:01 pm

Being in the "middle class" would be great, people in the middle class are bombarded with offers for credit. I'm not saying that credit and credit cards should be outlawed. Not by any means! Its just that in the USA, the lifestyle is saturated in debt. In other counties people have to save up their money to buy luxuries. I think its safe to say that the people (or the majority of people) in the USA have forgotten how to save money. I think that I am one of them, being a "starving student" of sorts, but that will change...

micahjr34
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Feb. 7, 2011 3:57 pm

Great post! It is a bad idea to simply adopt incorrect terminology. Sometimes it's important to lay the context down regarding what the middle class "is." One can say the American middle class is "gone" (if we define as what it once was, as you suggest) or that it's simply lost in real income as most of the gains in GDP over the failed expirment with Reagonomics have gone to the top 5% (especially the top 1%--especiall especiall the top .1%) and has left the "middle class" to be little more than, as you stated "working class on steroids." That brings us to the topic of our faltering education system. Right wing crazies like to blame "big government" for our falling in world standings. But of course, this has magically happened as raising a family has come to require TWO working parents, leaving them less time to devote to children and ensuring they are learning what they need.

HuxleyFan
Joined:
Sep. 18, 2011 2:44 pm

Post-industrial society probably equates with an unemployed society. Exchanging services like mowing a lawn for a haircut only goes so far. At some point, someone has to make a lawnmower and a razor. The Chinese won't trade a razor for an American haircut.

"The American working class has been destroyed. The American middle class is in its final stages of destruction. Soon the bottom rungs of the rich themselves will be destroyed." - Paul Craig Roberts, former editor Wall St. Journal and Asst. Secy of the Treasury.

http://184.168.112.47/cp/2010/11/08/phantom-jobs/

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 3:01 pm
Quote polycarp2:Post-industrial society probably equates with an unemployed society. Exchanging services like mowing a lawn for a haircut only goes so far. At some point, someone has to make a lawnmower and a razor. The Chinese won't trade a razor for an American haircut.

This is definitely true for those workers without skills or education. Making lawnmowers and razors requires skills, resources and capital; mass producing them on assembly llines reqires capital and resources but no skills. Robots never strike or take potty breaks.

Ixtelan's picture
Ixtelan
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Jul. 31, 2007 3:01 pm

Wow, Im loving the conversations.... Yes, I see that the middle class is really dead. What isnt dead is the desire to believe in the middle class dream.. Question: Is the final stake going to be driven into the heart of the remaining middle class in the coming years?? Does anyone have a clear understanding about Thom's response to Robert Wiedemer's book Aftershock?.. ( and the accompanying videos on the web predicting a major recession crash in the next two years???

...just wondering if Robert's economic ideas hold up to good critical analysis?

thanks !

salamandersound's picture
salamandersound
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Sep. 18, 2011 1:45 pm

Grocercy workers in the Los Angeles area are contemplating a strike. They struck before, in 2004. I didn't cross the picket line then and I won't cross it now.

The larger point is this: checkers and baggers earn a fair wage for jobs that essentially require few skills or education. The basic qualifications for the job are to show up and keep your hands out of the till. Because of the low skills, low edcuation aspects of the job, checkers and baggers are easily replaceable, which is why a union is absolutely essential to their job security and working conditions. Without union protection, they were be at the complete mercy of possibly merciless employers.

The largest point is this: Jobs for unskilled and uneducated workers are quickly fading from the U.S. economy. Supermarket checks and baggers are remnants of an America that hasn't existed for 20 or 30 years. Self-checkout scanners and self bagging are the future. Capital replaces labor in industrial societies, argued Marx. As this process occurs, we are becoming a post-industrial society.

I support the grocercy workers in their job action, but I also suggest that they take the time off to get some skills and education.

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Ixtelan
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Jul. 31, 2007 3:01 pm

Currently Chatting

The Death of the Middle Class was by Design...

Even in the face of the so-called Recovery, poverty and inequality are getting worse in our country, and more wealth and power is flowing straight to the top. According to Paul Buchheit over at Alternet, this is the end result of winner-take-all capitalism, and this destruction of the working class has all been by design.

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