I think there’s plenty of evidence showing that things are getting harder, not easier, when it comes to having the trappings we’ve traditionally viewed as the domain of the “middle class”. The middle class has always been able to obtain the “good” fruits of life. The rich get the best. The poor the worst. For lots of people, the good fruits are costlier than they used to be. So they feel not-so-middle-class.
And I think there’s something to be said for this. It’s not just perception. A college degree used to be a lot more affordable than it is now, and the ROI was higher for a typical degree. The idea that a college degree guaranteed a “good” job may have always been more myth than reality, but it certainly was more “reality” than “myth” in my parent’s day. Nowadays, only the wealthy and fools believe they can get away with majoring in anything, at any school, making any grades.
But I do think a lot of the shitty feelings people are experiencing are based on perception, irrespective of the reality. We perceive that the good life is harder to obtain because we’re being inculcated to think that anything less than the best is inadequate. Because we are in a rat race. It doesn’t matter than your middle schooler doesn’t need five extra curricular activities to receive a good education. They are being taught that if they don’t have them, they won’t be able to get into a good college. And they are being taught that if they aren’t able to get into a good college, then they will not get a job making at least $60K with health benefits and a 401K. People are hearing that if you can’t get a job like that, then you might as well not have kids because you won’t be able to afford a neighborhood with good schools–the kind that get kids into “good” colleges. Maybe the status anxiety is well-founded or maybe it’s irrational–I don’t know. But I can’t help but think that it has an effect on how people frame their socioeconomic situations.
I also think people are defining their economic situations based on their parents. It totally makes sense to do this, but maybe we need to start realizing that just because our parents’ had it “better” doesn’t mean that something is necessarily wrong with today’s system. Maybe our parents had it better because of imbalances in the system–particularly globally–and now that things are evening out, we have to let go of some expectations. My parents live in a 3500 sq ft McMansion. My house is 1/4th the size of theirs. Comparatively speaking, I suppose I’m “worse” off. But why should this make me sad? They weren’t entitled to a house like that, and neither am I.
I do worry about social mobility and growing inequality. I do not want the middle class to shrink if that means more people living in poverty. But I do think it is important for people to maintan perspective.
That’s an argument frequently heard from the right and it’s utter nonsense. First of all as Evil Economist cites, it doesn’t have much of an effect, which makes intuitive sense because you wouldn’t expect minimum wage earners to be big consumers or big spenders. But the more fundamental question is, what’s the alternative? On what kind of moral foundation do you build the argument that a particular economic class should be pushed into complete destitution so you and I don’t have competition for our favorite loaf of bread and therefore have to pay 3 cents more for it?
50% of Americans don’t graduate high school. Can you reasonably obtain a middle-class lifestyle without a high school diploma?
The only growth in inflation-adjusted income is among the highest income earners. Everyone else has stagnated or declined. If this trend continues, where will our society be in 50 years?
The economy is becoming increasingly integrated and competitive globally. This puts downward pressure on wages for American workers as they are now competing with foreign workers.
Studies generally show that “happiness” (speaking of arbitrary metrics) is typically defined not by one’s absolute income, but rather how one fares relative to his neighbors. If the trend continues towards a bifurcated society of “have’s” and “have-not’s,” does this lead to a large segment of disenfranchised Americans who seek more radical measures to rectify the situation?
“The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.” - Adam Smith
“An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” - Plutarch*
I agree whole heartedly with Stringbean.
I don’t think the CNN statistics on income etc… indicate anything about the middle class.
Household debt would have to be factored in, many people have a salary, and create the illusion they are middle class— nice car and house and clothes, but its all surface stuff bought on credit and they are just barely making their payments, they have no equity in their house, owe 30k on their car, no savings… Determining middle class would be easier if you just ask people: If you lose you lost your job today, how many months will go by before you have to move in with your relatives or live in your car?
I say this a lot in “middle class” threads, but the types of goods that are available in the different eras needs to be considered.
In 1960, a state-of-the-art television was a 23" color set that weighed a ton and cost $495 (almost $4,000 in today’s dollars).
Today, a 23" flat panel that weighs almost nothing and has a much better picture quality only costs $100. A state-of-the-art television can even be obtained for that very same $495. But now it’s 60 inches and can get on the Internet.
And a whole slew of products are like that nowadays. A middle class salary will go a lot further today than it did in 1960.
Well-being is more dependent on healthcare, housing, food, and college tuition than it is on electronic toys. “Nearly one in five children in America lives in households that struggle to put food on the table.”
I don’t know what universe you inhabit, but when we first moved to this area a little over 25 years ago our first house in a nice area cost about $160,000. Today the average house price in the whole metropolitan area is over $1 million and that particular house is, I’m guessing, in the neighborhood of about ten times the original amount (we sold it long ago.)
So someone arriving here now instead of 25 years ago would find their TV would be $300 cheaper but the equivalent house about $1.5 million more expensive. Tell us again about the middle class gains in the real world. Are you assuming that these people are going to be living under a bridge and powering their TVs with a pedal-powered generator?
But that’s not what people talk about when they talk about being middle class. People that consider themselves middle class have ready access to healthcare, housing, food, and college tuition. It’s the extras, the so-called “American Dream” of two cars in the driveway and big screen in the living room, that make someone middle class.
Not only is that figure inflated, it’s ridiculously irrelevant. For a person to establish a comfortable income in what decade would a high school education be required?
Did you need one in 1920? No. Women weren’t allowed to hold serious jobs then either so if you were a man your income would have to cover two earners.
You’re forgetting “access to information”, which has only been made possible via “electronic toys.”
“The internet” is perhaps number 5 or 6 on the list of things I need to live. A large house with a yard is, I dunno, #174.
The benefits of modern technology aren’t just limited to information, either. The cheapest, worst car you can buy today is vastly safer than anything you could buy a few decades ago. Perhaps the leather seats are less affordable, but in exchange you get to die horrifically less often.
Life expectancy has been continuously increasing. This is not because the 1%ers are now living to be 1000 years old.
If the economy were such that there was only one good, everybody bought as much of it as they could, and the supply of that good was fixed, then that would be a good analogy. But it isn’t.
I think you’ll find that models are useful ways to understand complex dynamics. For example, my map has lines, whereas reality has roads; still useful to understand how to get places.
FYI: The one-good two period model is the standard model for analyzing the dynamics of consumption choices.
Also, I was being funny. My post had a smiley face and everything.
The problem with this model is that income is divorced from productivity. If the person who had the raise had upped his production by a comparable amount it would not have affected the consumption of the other person.
You are correct in one sense, but in a world where inequality is a relative measure in which society is evaluated, you now have $100k less whereas before you only had $50k less. To correct this imbalance a system should be designed where I am taxed an additional $25k and it is redistributed to you, so that your adjusted income is now $75k and mine is now $125k. This restores the original income inequality of $50k. And society is whole once again. Everyone should be happy.
That would be an excellent way to discourage innovation and hard work. Are you seriously proposing that, or just throwing something theoretical out there?
Interesting to note that most companies only give raises of 3% pet year. Inflation over the last 50 years has averaged 3.22% meaning that over the long run most people never get an actual raise in pay, and actually get paid less even if they earn the full 3% every year. If they didn’t earn their raise for the year they were not simply not rewarded, they were punished. With the exception of promotions, which for most professions means becoming certified or reaching a higher level of education.
