Middle Class Shrinks Further as More Fall Out Instead of Climbing Up

[mystery-ak]

http://www.nytimes.com/2015/01/26/business/economy/middle-class-shrinks-further-as-more-fall-out-instead-of-climbing-up.html?_r=1

Middle Class Shrinks Further as More Fall Out Instead of Climbing Up

By DIONNE SEARCEY and ROBERT GEBELOFFJAN. 25, 2015

The middle class that President Obama identified in his State of the Union speech last week as the foundation of the American economy has been shrinking for almost half a century.

In the late 1960s, more than half of the households in the United States were squarely in the middle, earning, in today’s dollars, $35,000 to $100,000 a year. Few people noticed or cared as the size of that group began to fall, because the shift was primarily caused by more Americans climbing the economic ladder into upper-income brackets.

But since 2000, the middle-class share of households has continued to narrow, the main reason being that more people have fallen to the bottom. At the same time, fewer of those in this group fit the traditional image of a married couple with children at home, a gap increasingly filled by the elderly.

This social upheaval helps explain why the president focused on reviving the middle class, offering a raft of proposals squarely aimed at concerns like paying for a college education, taking parental leave, affording child care and buying a home.

continued

[massadvj]

In fairness, the middle class has been shrinking in the USA since the 1980's.  It is not a phenomenon driven by politics.  It is driven by technology and globalization.  However, until OPapaDoc, more people in the middle class were moving up than moving down.  Now there are more people moving down than moving up, which is a direct function of OpapaDoc's interference in the economy.

[jmyrlefuller]

The problem is fundamental.

The middle class is the direct result of those with money needing something that those who would become middle class can provide. Namely, labor.

Now, with automation, globalization, and the such, those with money can get what they need for less and no longer need as much labor. So they hold on to their cash.

The liberal solution is simply to tax those with money—but that is easily avoidable with a Double Irish and a Dutch sandwich.

The better solution is to find something those with money would be willing to part with that money for—something that the working class can and will provide. Do that and the economy is fixed.