Saturday, July 5, 2014

Does the “middle class” still exist?


I wonder if our standard concept of the “middle class” still has any meaning?

You know, the idea of the great middle, the backbone of society and the economy, the people who live in decent suburban homes, the folks who do the work of America, the family types who work hard  to give their kids a better life than they had….

Seems like every economic analysis I see these days suggests that everybody who isn’t in the top 10% or the top 1% or the top 1% of the top 10%, in terms of wealth and income, is just struggling to keep up while incomes and wealth continue to fall.

Yahoo.com reports that some standard benchmarks of financial well-being aren’t really useful anymore because the very, very wealthy are skewing the averages and hiding the fact that most folks are slipping lower on the financial benchmarks.

Yeah, the “average” American earns $44,000 and saves about 4% of income, and the “average” household has a net worth of $710,000.






But the averages are severely skewed by the very wealthy.








For instance, the top 1% of earners save 38% of their income. Try it: don’t spend 38% of your next paycheck, and that’s 38% of gross, not take-home, so you’re probably going to have to put aside half of your take-home pay. Try it.

Median household income—the mid-point of all households, which isn’t skewed by high earners—now stands at about $53,000, and that’s 7% LOWER than it was 14 years ago.

This is part of the explanation for our continuing, go-slow economic recovery, namely, that way too many folks in America aren’t recovering.






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