Whither Goes Dad's Recliner?
October 15, 2010 11:42 AM Subscribe
Everyone seems to agree that the middle class is disappearing in the USA. What (reliable) studies and figures back this up?
Bonus points for showing a historical trend.
Bonus bonus points for a clear and precise definition of what exactly "middle class" is.
Bonus points for showing a historical trend.
Bonus bonus points for a clear and precise definition of what exactly "middle class" is.
Not focused on class specifically, but the wealth distribution of the country is increasingly skewing towards the wealthy. That is, the rich are getting richer, and the poor are getting poorer.
This is quantified by the Gini coefficient, a measure of equality of wealth distribution. Roughly speaking, gini=0 means "everyone makes exactly the same amount", and gini=1 means "one rich dude has all the money and everyone else is broke"
Here is a graph over time of the Gini coefficient for the US and other countries.
(Note what happens in 1980 when Reagan takes office)
posted by qxntpqbbbqxl at 12:10 PM on October 15, 2010 [6 favorites]
This is quantified by the Gini coefficient, a measure of equality of wealth distribution. Roughly speaking, gini=0 means "everyone makes exactly the same amount", and gini=1 means "one rich dude has all the money and everyone else is broke"
Here is a graph over time of the Gini coefficient for the US and other countries.
(Note what happens in 1980 when Reagan takes office)
posted by qxntpqbbbqxl at 12:10 PM on October 15, 2010 [6 favorites]
Robert Reich is a pretty well-respected thinker on this subject, who worked as Secretary of Labor under President Clinton. His recent book Aftershock discusses the waning earning power of the middle class over the last half century. It is full of primary citations you could use to further research this issue.
posted by Blazecock Pileon at 12:14 PM on October 15, 2010 [1 favorite]
posted by Blazecock Pileon at 12:14 PM on October 15, 2010 [1 favorite]
Actually, I will add that it is more than just incomes declining for the middle class. The real info you want to show that the middle class is declining is that the rich are getting richer, while the poor are getting poorer, thereby lowering the percentage of people in the middle. There are some figures here.
posted by sophist at 12:17 PM on October 15, 2010 [1 favorite]
posted by sophist at 12:17 PM on October 15, 2010 [1 favorite]
http://www.youtube.com/watch?v=akVL7QY0S8A
UCSF layman's lecture on the topic - not a rickroll.
Unless you're middle class, then it's an hour long rickroll.
posted by BurnMage at 4:41 PM on October 15, 2010 [2 favorites]
UCSF layman's lecture on the topic - not a rickroll.
Unless you're middle class, then it's an hour long rickroll.
posted by BurnMage at 4:41 PM on October 15, 2010 [2 favorites]
"Everyone"? I think there is a real confusion between what people are spending and what people are earning. Keeping up with your neighbors can make you look rich but keep you in the hole.
Technically there will ALWAYS be a middle class, it's those who earn the middle.
posted by zombieApoc at 8:50 PM on October 15, 2010
Technically there will ALWAYS be a middle class, it's those who earn the middle.
posted by zombieApoc at 8:50 PM on October 15, 2010
Timothy Noah's "Great Divergence" series at Slate is a great place to start:
http://www.slate.com/id/2267157/
posted by thinkingwoman at 6:21 AM on October 16, 2010 [1 favorite]
http://www.slate.com/id/2267157/
posted by thinkingwoman at 6:21 AM on October 16, 2010 [1 favorite]
"Is the rise of automation from computers software and robotics and web-fueled outsourcing leading to a shrinking middle class?" Also see the links in the comments there.
posted by Dave 9 at 1:59 PM on October 17, 2010
posted by Dave 9 at 1:59 PM on October 17, 2010
Everyone seems to agree that the middle class is disappearing in the USA.
Not Thomas Sowell in Economic Facts and Fallacies. You can see his argument by using Amazon's "look inside!," searching for "middle class," and reading pages 139-41, starting with the heading "The 'Vanishing' Middle Class." He calls out Paul Krugman and other writers on pg. 141. The book was published in 2005, so it might be dated, but he's making a broader point about how not to be misled by statistics.
I also recommend buying or borrowing the book and reading that whole chapter ("Income Facts and Fallacies") if you're going to start taking a close look at these kinds of statistics. For instead, that huge series of articles by Tim Noah on Slate seems to assume that "income" is a reliable proxy for people's affluence or wealth or class or socioeconomic status. In fact, it represents none of those things. Statistics about "income" often obfuscate more than they clarify, for many reasons that Sowell explains.
posted by John Cohen at 2:24 PM on October 20, 2010
Not Thomas Sowell in Economic Facts and Fallacies. You can see his argument by using Amazon's "look inside!," searching for "middle class," and reading pages 139-41, starting with the heading "The 'Vanishing' Middle Class." He calls out Paul Krugman and other writers on pg. 141. The book was published in 2005, so it might be dated, but he's making a broader point about how not to be misled by statistics.
I also recommend buying or borrowing the book and reading that whole chapter ("Income Facts and Fallacies") if you're going to start taking a close look at these kinds of statistics. For instead, that huge series of articles by Tim Noah on Slate seems to assume that "income" is a reliable proxy for people's affluence or wealth or class or socioeconomic status. In fact, it represents none of those things. Statistics about "income" often obfuscate more than they clarify, for many reasons that Sowell explains.
posted by John Cohen at 2:24 PM on October 20, 2010
"Everyone"? I think there is a real confusion between what people are spending and what people are earning. Keeping up with your neighbors can make you look rich but keep you in the hole.
I think there's this fairly frequently trotted-out myth that the real issue with the middle class is that they're being far to prolific with their funds. It's true that there is more spending in this area, but this is by design. The United States currently depends on consumption to drive the economy. So the middle class is expected to purchase more now than it did in the past. It's also increasingly difficult to find non-consumption alternatives to solve everyday problems. Most products purchased today are created to become garbage within a few years. It is somewhere between impossible and difficult to fix them yourself or even get them repaired. Fewer and fewer automobile problems can be addressed outside of a mechanics (compare to the renowned VW back in the 70s that owners could repair themselves using a single, easy-to-read manual). The latest resurgence of a DIY movement in the US is actual a symptom of the problem. Notice there isn't a "working longer hours movement" or a "commuting by car" movement but there is a popular movement promoting a balance between work and personal life, and a push to use bikes for transportation. Movements arise out of a reaction to the status quo, and the DIY movement is a reaction to a world where everything has to be bought and paid for (with, of course, very flexible definitions of "paid for" -- until the recent economic collapse, people were quite content to allow the middle class to drown itself in debt in order to sustain the consumer economy).
Technically there will ALWAYS be a middle class, it's those who earn the middle.
Yeah, but the point is it is getting smaller. There is a healthy, but small, population of really rich people, and a growing population of poor people. The middle class is really good for the economy: they spend a lot of their income, which helps the economy keep going, and they don't require quite as many resources from the government as poor people do.
posted by Deathalicious at 5:54 PM on October 20, 2010
I think there's this fairly frequently trotted-out myth that the real issue with the middle class is that they're being far to prolific with their funds. It's true that there is more spending in this area, but this is by design. The United States currently depends on consumption to drive the economy. So the middle class is expected to purchase more now than it did in the past. It's also increasingly difficult to find non-consumption alternatives to solve everyday problems. Most products purchased today are created to become garbage within a few years. It is somewhere between impossible and difficult to fix them yourself or even get them repaired. Fewer and fewer automobile problems can be addressed outside of a mechanics (compare to the renowned VW back in the 70s that owners could repair themselves using a single, easy-to-read manual). The latest resurgence of a DIY movement in the US is actual a symptom of the problem. Notice there isn't a "working longer hours movement" or a "commuting by car" movement but there is a popular movement promoting a balance between work and personal life, and a push to use bikes for transportation. Movements arise out of a reaction to the status quo, and the DIY movement is a reaction to a world where everything has to be bought and paid for (with, of course, very flexible definitions of "paid for" -- until the recent economic collapse, people were quite content to allow the middle class to drown itself in debt in order to sustain the consumer economy).
Technically there will ALWAYS be a middle class, it's those who earn the middle.
Yeah, but the point is it is getting smaller. There is a healthy, but small, population of really rich people, and a growing population of poor people. The middle class is really good for the economy: they spend a lot of their income, which helps the economy keep going, and they don't require quite as many resources from the government as poor people do.
posted by Deathalicious at 5:54 PM on October 20, 2010
Yeah, but the point is it is getting smaller.
That is not necessarily a bad thing if it's because they're moving up. It's arbitrary to define some block in "the middle" and just keep looking at the size of that. Also, as long as this is based on "income," it's severely flawed for many reasons, as Thomas Sowell explains.
posted by John Cohen at 7:24 AM on October 21, 2010
That is not necessarily a bad thing if it's because they're moving up. It's arbitrary to define some block in "the middle" and just keep looking at the size of that. Also, as long as this is based on "income," it's severely flawed for many reasons, as Thomas Sowell explains.
posted by John Cohen at 7:24 AM on October 21, 2010
Compare the lifestyle of the median income family 50 or 100 years ago to the lifestyle to the median income family now. I doubt it will look like the middle class is disappearing or declining.
In fact, I bet it works out for darn near every decile on the income chart, except the top one. I bet the top 10% are on average, making do with a lot fewer personal/household employees and standard "rich guy" perks. Maybe they have more income than before, but they aren't exactly consuming like they did before.
Maybe the standard deviation from the median is getting larger, but there are far fewer hobo camps and families starving to death now than pretty much ever before. As a percentage at least.
posted by gjc at 7:45 AM on October 21, 2010 [1 favorite]
In fact, I bet it works out for darn near every decile on the income chart, except the top one. I bet the top 10% are on average, making do with a lot fewer personal/household employees and standard "rich guy" perks. Maybe they have more income than before, but they aren't exactly consuming like they did before.
Maybe the standard deviation from the median is getting larger, but there are far fewer hobo camps and families starving to death now than pretty much ever before. As a percentage at least.
posted by gjc at 7:45 AM on October 21, 2010 [1 favorite]
Compare the lifestyle of the median income family 50 or 100 years ago to the lifestyle to the median income family now. I doubt it will look like the middle class is disappearing or declining.
Actually, from the perspective of someone in 1910 who could see 100 years into the future, it would look like the middle class was drastically shrinking.
It would look like the middle class had moved up to the level of the super-rich.
posted by John Cohen at 12:39 PM on October 21, 2010
Actually, from the perspective of someone in 1910 who could see 100 years into the future, it would look like the middle class was drastically shrinking.
It would look like the middle class had moved up to the level of the super-rich.
posted by John Cohen at 12:39 PM on October 21, 2010
Another thing, since gjc brought up the important (oft-overlooked) question of lifestyle standards: remember that income figures depend on inflation.
And how do we measure inflation? Partly by looking at the changing cost of consumer goods.
But what are the consumer goods we look at? In the real world, it's not like the same exact goods keep being bought and sold forever, with only the prices rising or falling. The goods themselves change wildly. Should we have faith in economic indices to fully capture these changes? For instance, laptop computers are now commonplace. There had to be some year when we started figuring those into inflation. And you're not going to start doing this the very year they're invented, but only after their price goes down enough that lots of people are buying them. And this is aside from how much more immensely fast and powerful and useful they've become. Should we simply trust that the consumer price index (which is used to measure inflation) will capture the full extent to which laptop computer prices are actually falling relative to what they offer consumers? I don't think so. There are economists who believe that that index systematically overstates inflation. (See Thomas Sowell's Economic Facts and Fallacies, pp. 131-32, for this and related points.)
In short, inflation statistics can be wildly skewed. And that means income statistics can be wildly skewed.
posted by John Cohen at 1:12 PM on October 21, 2010
And how do we measure inflation? Partly by looking at the changing cost of consumer goods.
But what are the consumer goods we look at? In the real world, it's not like the same exact goods keep being bought and sold forever, with only the prices rising or falling. The goods themselves change wildly. Should we have faith in economic indices to fully capture these changes? For instance, laptop computers are now commonplace. There had to be some year when we started figuring those into inflation. And you're not going to start doing this the very year they're invented, but only after their price goes down enough that lots of people are buying them. And this is aside from how much more immensely fast and powerful and useful they've become. Should we simply trust that the consumer price index (which is used to measure inflation) will capture the full extent to which laptop computer prices are actually falling relative to what they offer consumers? I don't think so. There are economists who believe that that index systematically overstates inflation. (See Thomas Sowell's Economic Facts and Fallacies, pp. 131-32, for this and related points.)
In short, inflation statistics can be wildly skewed. And that means income statistics can be wildly skewed.
posted by John Cohen at 1:12 PM on October 21, 2010
I didn't know about the Gini Coefficient. That's beautiful.
posted by freebird at 12:28 AM on October 24, 2010
posted by freebird at 12:28 AM on October 24, 2010
« Older Parents of kids with ADHD: What works for you? | Where can I find a Whac-a-Mole game near San... Newer »
This thread is closed to new comments.
For the median family, real annual incomes have declined from $47,599 in 2000 to $46,326 in 2005, a drop of 2.7%. For working-age families — those headed by adults younger than 65 — the decline has been even steeper. For these families, median annual incomes have declined from $55,284 in 2000 to $52,287 in 2006, a drop of 5.4%
In real terms, health insurance costs have increased by nearly $900, gasoline and other energy costs have increased by over $2,300, and college education costs have increased by over $1,500 since 2000. The median U.S. family facing these three expenses would have seen its real income drop by almost $1,300 since 2000, while its real expenses would have increased by
almost $5,000.
Since there is an official federal definition of “poverty,” does the federal government also have official definitions for such terms as “middle class,” “middle income,” “rich,” and “upper income”?
No. The federal government does not have official definitions for such terms as “middle class,” “middle income,” “rich,” and “upper income.”
Also see the for attempted definitions and much more stats "Middle Class Task Force Report". There is so much information out there on this topic I don't see the need to go any further.
posted by sophist at 11:56 AM on October 15, 2010