In Case You Missed This... Middle Class Suffered ‘Worst Decade In Modern History’ - ThinkProgress

[WillyT]

STUDY: Middle Class Suffered ‘Worst Decade In Modern History’ As Wages Stagnated, Share Of Income Fell
By Travis Waldron - ThinkProgress
Aug 23, 2012 at 11:15 am

<snip>

The middle class is shrinking, and so is its share of America’s income and wage growth, according to a new study released Thursday. The study from the Pew Research Center found that the middle class — defined as Americans with incomes between $39,000 and $118,000 — fell backward in income for the first time since the end of World War II, and the number of Americans who fit into that category shrunk from 61 percent in 1971 to just 51 percent in 2011.

The share of income that went to the middle class also fell during the first decade of the 21st century, a 10-year period that featured two damaging recessions, including the worst economic downturn since the Great Depression, and a major housing crisis. The share of income that went to the wealthiest Americans, however, has grown substantially since 1970, as the Washington Post notes:

In 1970, the share of U.S. income that went to the middle class was 62 percent, while wealthier Americans received just 29 percent. But by 2010, the middle class garnered 45 percent of the nation’s income, tying a low first reached in 2006, compared to 46 percent for upper-income Americans.

Since 2000, the median income for America’s middle class has fallen from $72,956 to $69,487.

The Pew survey is the latest to note rising income inequality in America as the middle class continues to struggle while the wealthy remain relatively prosperous. Income inequality in the U.S. is now comparable, if not worse, than it is in countries like Ivory Coast and Pakistan, as middle class wages have stagnated. A 2010 Census Bureau study found that incomes for the bottom tier of Americans fell four times faster than they did for the wealthiest after the recession.

<snip>

More: http://thinkprogress.org/economy/2012/08/23/734781/middle-class-worst-decade/

[kestrel91316]

1. The 1%'s response:

[a geek named Bob]

2. Amen

[HiPointDem]

3. kr

[ProSense]

4. Interesting,

the biggest declines came between 1980 and roughly 1995.

About 12 percent of the overall 17 percent drop.

Reaganomics?

[girl gone mad]

8. What would you characterize as Reaganomics?

In what ways do the current administration's major economic policies differ from Reaganomics?

Wikipedia describes the four pillars of Reaganomics as: reducing the growth of government spending, reducing income tax and capital gains tax, reducing government regulation of the economy, and controlling the money supply to reduce inflation.

3/4 of these are stated goals of our current leadership. See this, this, this and this.

So, the key difference between Reaganomics and current economics is an as yet unaccomplished desire to raise income taxes (Reagan actually did raise taxes on capital gains). Is a modest income tax hike enough to reverse the significant damage to the middle class caused (in your eyes) by Reaganomics?

[hfojvt]

5. did they say where the other 10% went?

If the middle class got smaller by 10% "the number of Americans who fit into that category shrunk from 61 percent in 1971 to just 51 percent in 2011." Then where did that 10% go? Up? Or down?

That answer affects the "share of income" chart that they show. If the wealthy class got bigger and the middle class smaller, then the trend of their aggregate income is not that shocking or outrageous.

My charts talk about the same size group, although I wish I had data going back to 1966 or even just 1976, because it was Reagan who started the ball rolling and even 1986 is sorta post-Reagan. http://www.koch2congress.com/5.html

[moondust]

6. It's liable to get worse.

As the middle class shrinks so does the customer base for most goods and services.

Of course the yacht makers will be fine.

[hunter]

7. I know it's true in our family.

My wife and I, our union fathers worked hard and live comfortably even in retirement.

It feels like our generation has to fight for the smallest gains and against huge retreats. And for most of us there are no unions.

[CabCurious]

9. k&r

[dickthegrouch]

10. It's not just income that's down

The value of 401Ks has gone down by at least 30%, property values are down by at least 30% (if you've been lucky enough to hold onto the property at all) as are many other investments.
Those of us on the wrong side of 50 are likely to have far less enjoyable retirements as a result, particularly if we don't enjoy excellent health. Having to preserve substantial funds for possible health crises is barbaric.
If we can bail out banks who are too big to fail, we can certainly bail out "the little people" who fall on hard times, and who made those banks too big to fail.