For much of the most productive era in American history the middle class was the dominant force in the country. The nation was so aligned along that center of the income range that the term “Middle Class America” described the nation, not merely a socioeconomic band. Politicians talk a good line and pay lip service to supporting the middle class, but the fact is they’re not getting the job done. Less than half of America, 49.9% to be exact, now belong to the middle class, down from 61% in 1971. The middle class is disappearing and there’s evidence to suggest that trend is accelerating.
It’s important to distinguish between the American middle class and the rest of the world because, everywhere else, the middle class is growing, just not here. In the U.S. middle class incomes fell an average of 4% between 2000 and 2014, according to data released by the Pew Research Center.
The Rich Get Richer
Never has the old truism about the rich getting richer been more true than it is today. Upper income Americans now account for nearly half of all aggregate U.S. income. If you think of the aggregate income of the nation as a pie, that means roughly 21% of the population takes half the pie before the other 79% even get a bite. Income has grown faster for those at the top than those in the middle, which means gains in income go disproportionately to those in the upper income ranges.
Still Feeling The Great Recession
Surprisingly, the middle class was doing pretty good, right up until the meltdown of 2007/2008. That not only wiped out the accumulated wealth of the middle class, but it also clobbered incomes. While the higher ups never missed their bonus checks, wages were slow to recover even as the stock market set new records. Instead of giving their employees raises, big companies used the money to buy back their own stock. If you’re part of the 54% of Americans who have any money in the stock market, you did well. Otherwise, the years after the Great Recession were times of longer hours and meager paychecks.
Not Changing Anytime Soon
Probably most disheartening about the report is the near certain conclusion that the trend is likely to stay in place nearly indefinitely. The middle class is no longer the majority and will continue to shrink in both size and influence in American politics. The wealthy will continue to expand and expand their piece of the pie, which means their political influence will also continue to dominate the political landscape.
A Glimmer of Good News
If there’s a glimmer of good news in the report it’s that the number of wealthy Americans has increased and the number of lower income and poor Americans has stayed relatively consistent. That means at least part of the loss in the middle class is because they moved into a higher income bracket. Which side of the political spectrum you’re on will most likely determine which elements get the most attention. If you’re part of that upper 21%, life is good.
What the change means in more certain terms is that the middle class will continue to unravel as both a political and social force. That will mean profound changes to American society and not all of them will be positive. Even though the ranks of the wealthiest have grown, the American dream is now an 80/20 split.