http://money.cnn.com/2015/03/24/news/economy/middle-class-smaller/index.html?iid=HP_LN
Since the year 2000, middle class households have decline in every state. As many state populations continue to grow, it's shocking to believe that only 51% of population is in the middle class, compared to the 70's when 61% of the households were in the middle class. Wisconsin had the largest drop of 5.8% while Wyoming on decreased by .3%. So which class are American household migrating towards? Actually, many have made their way to upper middle class. Signs are showing that our nation is becoming richer as the lower class also decrease by 3%. It will be interesting to see if this trend continues and what effect it will have on future policies.
7 comments:
This article is interesting. It's surprising that the middle class in every state is declining and not just a few. I wonder why some states are declining by a greater percentage than others.
An interesting aspect of this article is how the middle class is determined, which according to the article is defined as those making between 67% and 200% of the states median income. What is not included in the article is what the median income was before and after their comparison between 2010 and 2013. If the median income dropped, then more people would be considered upper and middle class without having improved their economic situation. If the median income stayed constant or grew, then this article is good news.
This is a very interesting article, as I would have initially thought that more and more people are entering lower classes as opposed to upper middle classes. I have the same question as Jonel, why are some states declining by a greater percentage than others? Does this have anything to do with job opportunities, or minimum wage?
This article relates to the report we read for class called "International Comparisons of Economic Mobility." The report mentions that inter-generational economic mobility is low in the US. According to the article the upper-income households have increased from 14% to 20%. While this may seem high it might be helpful to know the percentage from previous years to conclude that economic mobility is truly increasing in the US.
Moreover, the median income is calculated on a state by state basis, so the middle class of one state may not correspond to the middle class of another state. So, to draw a conclusion that the overall upper-income households in US have increased seems a bit confusing.
While it is great to hear that more American households are migrating towards the upper class and the lower class has decreased by 3%, I wonder if income inequality has increased. That is, if the poorest of the poor in the lower class have gotten poorer and the richest or the rich in the upper class have gotten richer.
I believe this gap is becoming narrowed and we see a disappearing middle class thanks to the abundance of educational opportunities. I also think the tech sector and oil markets have created a market for jobs that has not been realized in previous decades. Interesting and encouraging stuff.
What matters isn’t the size of the middle class. What matters is that 90% of folks have seen wages stagnate, or actually drop if you’re in the bottom third. Being in the middle with a group of folks who are watching their wages drop is not a good thing. Couple this with the fact that education and healthcare have tripled in cost since 1980.
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