# Shrinking Middle Class in the US(?) **URL:** \ **Category:** Great Debates\ **Created:** [December 9, 2015, 11:38pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992 "2015-12-09T23:38:33Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [December 21, 2015, 1:44pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/101 "2015-12-21T13:44:12Z")
Yes, it is. Is taking a big raise away from someone who innovated and giving it to someone who didn’t, a good way to encourage innovation? Regards, Shodan ---
**Author:** ![Hocus\_Pocus](https://avatars.discourse-cdn.com/v4/letter/h/41988e/32.png) [@Hocus\_Pocus](https://boards.straightdope.com/u/Hocus_Pocus)\ **Post date:** [December 21, 2015, 1:54pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/102 "2015-12-21T13:54:06Z")
> [@Shodan](#): > > Yes, it is. > > Is taking a big raise away from someone who innovated and giving it to someone who didn’t, a good way to encourage innovation? > > Regards, > Shodan How was the big raise taken away when he is getting a 25% raise? ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [December 21, 2015, 2:00pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/103 "2015-12-21T14:00:39Z")
> [@Dr.Strangelove](#): > > Anyone with a positive net worth has more wealth than perhaps the bottom 25% of American households combined. That’s a problem, but the Waltons are a total red herring. It’s not income inequality that’s the problem; it’s the fact that a big segment of the American public has negative net worth. Do you know how this maps with present and former middle classers? I’m not finding good data. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [December 21, 2015, 3:16pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/104 "2015-12-21T15:16:22Z")
> [@Hocus\_Pocus](#): > > How was the big raise taken away when he is getting a 25% raise? Because half of it is going to someone who didn’t innovate. Could you please answer the question? Regards, Shodan ---
**Author:** ![elfkin477](https://avatars.discourse-cdn.com/v4/letter/e/a9a28c/32.png) [@elfkin477](https://boards.straightdope.com/u/elfkin477)\ **Post date:** [December 27, 2015, 3:39am UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/105 "2015-12-27T03:39:04Z")
> [@Evil\_Economist](#): > > If your argument is that raising the minimum wage makes people worse off through price increases, I’m going to have to say that’s contrary to the literature, [e.g.](http://ftp.iza.org/dp1072.pdf): > > Despite the different methodologies, data periods and data sources, most studies found that a 10% US minimum wage increase raises food prices by no more than 4% and overall prices by no more than 0.4%. This is a small effect. …The overall reading of the above evidence on price effects, together with the evidence in the literature on wages and employment effects is that the minimum wage increases the wages of the poor, does not destroy too many jobs, and does not raise prices by too much. If people wanted to raise minimum wage by 10% this study’s information might be relevant. Instead what a lot of people want is to raise it by over 100% (twice times 7.25 only being 14.50 and the oft cited desired wage is $15/hour). So… inflation would only raise food prices by what, 40% if it followed the previous pattern in the study? That’d be great! ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [December 27, 2015, 10:16am UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/106 "2015-12-27T10:16:52Z")
> [@Ruken](#): > > Do you know how this maps with present and former middle classers? I’m not finding good data. Unfortunately, no. It is hard to find data. My figure came from a percentile distribution of wealth. IIRC, the zero crossover was at around the 15th percentile. Obviously you have to integrate somewhat past that to get a sum of zero (I guesstimated 25%). No indication of the income class of the population, though. ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [December 27, 2015, 3:17pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/107 "2015-12-27T15:17:46Z")
> [@elfkin477](#): > > If people wanted to raise minimum wage by 10% this study’s information might be relevant. Instead what a lot of people want is to raise it by over 100% (twice times 7.25 only being 14.50 and the oft cited desired wage is $15/hour). So… inflation would only raise food prices by what, 40% if it followed the previous pattern in the study? That’d be great! Huh? Do you not know the difference between .4% and 40% or am I missing something? ---
**Author:** ![elfkin477](https://avatars.discourse-cdn.com/v4/letter/e/a9a28c/32.png) [@elfkin477](https://boards.straightdope.com/u/elfkin477)\ **Post date:** [December 27, 2015, 3:29pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/108 "2015-12-27T15:29:12Z")
> [@Mr.Nylock](#): > > Huh? Do you not know the difference between .4% and 40% or am I missing something? Yes, you missed something. Like most of the sentence before the overall 0.4. 4% at a 10% increase is the same as 40% at a 100% increase. > [@](#): > > Originally Posted by Evil Economist View Post > If your argument is that raising the minimum wage makes people worse off through price increases, I’m going to have to say that’s contrary to the literature, e.g.: > > Despite the different methodologies, data periods and data sources, most studies found that **a 10% US minimum wage increase raises food prices by no more than 4%** and overall prices by no more than 0.4%. This is a small effect. …The overall reading of the above evidence on price effects, together with the evidence in the literature on wages and employment effects is that the minimum wage increases the wages of the poor, does not destroy too many jobs, and does not raise prices by too much. ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [December 27, 2015, 4:15pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/109 "2015-12-27T16:15:52Z")
> [@elfkin477](#): > > Yes, you missed something. Like most of the sentence before the overall 0.4. 4% at a 10% increase is the same as 40% at a 100% increase. Ok, thanks :smack: ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [December 27, 2015, 5:49pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/110 "2015-12-27T17:49:37Z")
> [@Dr.Strangelove](#): > > Unfortunately, no. It is hard to find data. My figure came from a percentile distribution of wealth. IIRC, the zero crossover was at around the 15th percentile. Obviously you have to integrate somewhat past that to get a sum of zero (I guesstimated 25%). No indication of the income class of the population, though. I’m struggling with how best to think about all this. Income inequality maps differently from wealth inequality, and they both contribute to economic inequality. The link in the OP defines middle class by income, but it’s more complicated than that. Both income and wealth increase with age, to a point (many data just stop at “55+”, so I’m not sure where that point is) and the age distribution in the US has certainly been changing. Although my zero-order guess is that the rising median age would contribute to rising income and wealth, and I don’t think we’re seeing that. Or we are and it’s muddled by other effects. Wealth measurements get weird because of how things get counted. Any sort of benefit plan has a present actuarial value. And that value is not necessarily concentrated among the nation’s wealthy. But of course you can’t cash out a pension or SS or pass them on to your kids, so it seems weird to factor those in. ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [December 27, 2015, 10:43pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/111 "2015-12-27T22:43:09Z")
One point that has been going unchallenged by the defenders of wealth inequality is that WE, THE PEOPLE set minimum wage and if we don’t like it we can change it. Uttterly untrue, because [Congress only pays attention to the rich](http://www.slate.com/blogs/weigel/2014/04/24/gilens_and_page_find_that_rich_americans_rule_politics_but_despair_the_fact.html), specifically, wealthy campaign donors, especially with regard to economic policy. Basically, Walmart and other wealthy corporations and individuals DO set the minimum wage. Our opinions simply do not matter. We are mere spectators at our own government. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [December 27, 2015, 10:49pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/112 "2015-12-27T22:49:43Z")
So true. And this is why congress has never passed a minimum wage increase. ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [December 28, 2015, 12:00am UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/113 "2015-12-28T00:00:23Z")
> [@Ruken](#): > > Although my zero-order guess is that the rising median age would contribute to rising income and wealth, and I don’t think we’re seeing that. Or we are and it’s muddled by other effects. It’s really difficult to tease apart all the different effects. Take student loans for instance. They’ve become an increasing problem in recent years, and burden new graduates with significant debt. However, a solid chunk of those graduates will get good jobs and pay off the debt after being in the workforce for several years. The remaining people won’t, either because their industry lacks jobs or because they got a useless degree, and they’ll remain in significant debt. It’s not possible to tell these two groups apart just by looking at the population of 22-25 year olds, though. The debt is not a good predictor of future performance. ---
**Author:** ![Urbanredneck](https://avatars.discourse-cdn.com/v4/letter/u/ea5d25/32.png) [@Urbanredneck](https://boards.straightdope.com/u/Urbanredneck)\ **Post date:** [December 28, 2015, 12:05pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/114 "2015-12-28T12:05:13Z")
> [@Dr.Strangelove](#): > > It’s really difficult to tease apart all the different effects. Take student loans for instance. They’ve become an increasing problem in recent years, and burden new graduates with significant debt. However, a solid chunk of those graduates will get good jobs and pay off the debt after being in the workforce for several years. The remaining people won’t, either because their industry lacks jobs or because they got a useless degree, and they’ll remain in significant debt. It’s not possible to tell these two groups apart just by looking at the population of 22-25 year olds, though. The debt is not a good predictor of future performance. Maybe eventually. But paying off a $100,000 debt even with a good job can easily take 10 years or more meanwhile you have to delay getting a house or doing much else with your money. I listen to Dave Ramsey alot and it takes huge discipline and sacrifice to pay off that debt. A big problem is that student debt hits you right when your in your 20’s and going thru many transitions in your life like wanting to start a family. So yes they may eventually pay it off and get into a middle class life but it will be in their 40’s at least. ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [December 28, 2015, 6:10pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/115 "2015-12-28T18:10:35Z")
> [@Ruken](#): > > So true. And this is why congress has never passed a minimum wage increase. Well, it’s why the minimum wage has never been a living wage. Point is, the people who have been saying that Walmart is just Following The Law when it pays minimum wage and not morally culpable for their employees’ low wages are wrong, because Walmart, much more so than The People, is in a position to set minimum wage. Walmart LIKES low minimum wages, such wages allow them to pay their employees less, boosting their profits. Walmart’s owners and shareholders are the largest drinkers at the public trough for the poor, and they LIKE it that way. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [December 28, 2015, 10:03pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/116 "2015-12-28T22:03:58Z")
> [@Dr.Strangelove](#): > > It’s really difficult to tease apart all the different effects. It would help if we knew the right question. The link in the OP answer the question it asks, but I’m not sure how useful the question is. Some random crap I found during my blind internet flailing: Household income by age: [http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-Age-Brackets](http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-Age-Brackets) Note that the \>65ers have shit income on par with 15-24ers. But as you noted earlier, wealth is important too. And old folks are the wealthiest: > **[Media | Demos](https://www.demos.org/media)** But each each income group in the \>65ers is going to have a distribution of wealth. Assuming we have the data, is there a good way to plot that all at once? You mentioned loans in your post. Looking at that wealth-by-age link I posted, I wonder how that plot has changed over the years. People appear not to accumulate much wealth before age 35. Is wealth accumulation being delayed? If yes (I don’t know the answer), is that due to loans, shit jobs, or both? Another poster mentioned $100k in student loan debt. While that’s atypical, I haven’t yet seen how the median debt has changed over time. I suspect it’s increasing, but not as fast as the mean debt. ---
**Author:** ![Justin\_Bailey](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/justin_bailey/32/8792_2.png) [@Justin\_Bailey](https://boards.straightdope.com/u/Justin_Bailey)\ **Post date:** [December 28, 2015, 10:50pm UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/117 "2015-12-28T22:50:12Z")
> [@Evil\_Captor](#): > > One point that has been going unchallenged by the defenders of wealth inequality is that WE, THE PEOPLE set minimum wage and if we don’t like it we can change it. > > Uttterly untrue, because [Congress only pays attention to the rich](http://www.slate.com/blogs/weigel/2014/04/24/gilens_and_page_find_that_rich_americans_rule_politics_but_despair_the_fact.html), specifically, wealthy campaign donors, especially with regard to economic policy. > > Basically, Walmart and other wealthy corporations and individuals DO set the minimum wage. Our opinions simply do not matter. We are mere spectators at our own government. Several dozen states will raise their minimum wages on January 1st. So WE THE PEOPLE most certainly are having an effect. It’s not going up as quickly as I’d like, but the process is working. > **[Minimum wage in the United States](https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States#State)** > > Employment > In the United States, the minimum wage is set by U.S. labor law and a range of state and local laws. The first federal minimum wage was instituted in the National Industrial Recovery Act of 1933, signed into law by President Franklin D. Roosevelt, but later found to be unconstitutional. In 1938, the Fair Labor Standards Act established it at 25¢ an hour ($5.41 in 2023). Its purchasing power peaked in 1968, at $1.60 ($14.00 in 2023). In 2009, Congress increased it to $7.25 per ho E... ---
**Author:** ![psikeyhackr](https://avatars.discourse-cdn.com/v4/letter/p/97f17d/32.png) [@psikeyhackr](https://boards.straightdope.com/u/psikeyhackr)\ **Post date:** [December 31, 2015, 5:47am UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/118 "2015-12-31T05:47:12Z")
> [@puddleglum](#): > > This makes no sense. The purpose of a business is to generate a return for its owners. The reason people make money is for consumption. If people thought like a capitalist everyone would hoard assets and live in poverty. Studying accounting would not have anything to do with what people chose to spend their money on. It is funny how some people know what other people will do with knowledge and figure that is a reason to keep them ignorant. A Swedish socialist who said he taught English in high school told me that he objected to mandatory accounting on the grounds that the math would make capitalism seem logical to the students. psik ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [January 7, 2016, 4:10am UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/119 "2016-01-07T04:10:29Z")
> [@septimus](#): > > Googling, it appears that, although Joseph Stiglitz is frequently mentioned in SDMB threads on income inequality, nobody has mentioned his relatively recent book > _The Price of Income Inequality: How Today’s Divided Society Endangers our Future_. > [@Ruken](#): > > Let’s do a thread on Stiglitz’s book. I gotta read it though. > > I nominate myself for playing the roll of possibly unhinged thread curmudgeon. > [@Mr.Nylock](#): > > It sounds like fun. I’ll play the role of down trodden blue collar worker. Now, if we can only find a high minded liberal arts major from an prestigious university . . . I bought it and read the first couple chapters yesterday. There is some good and some bad. I’d be interested in discussing here or elsewhere if there’s interest. ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [January 8, 2016, 12:05am UTC](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992/120 "2016-01-08T00:05:29Z")
> [@Ruken](#): > > I bought it and read the first couple chapters yesterday. There is some good and some bad. I’d be interested in discussing here or elsewhere if there’s interest. I’ll try to start reading it this weekend. [Previous page](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992.md?page=5) [Next page](https://boards.straightdope.com/t/shrinking-middle-class-in-the-us/739992.md?page=7)