Shame...

[happyslug]

26. By whose definition???

I hate to say this, the term "Middle Class" is a meaningless term today. I have seen Multimillionaires call themselves "Middle Class" and I have had clients on Welfare call themselves "Middle Class".

If we go by what people call themselves (i.e. Welfare recipients are "Middle Class" for that is what they call themselves), then an increase in the Minimum wage will increase the Income of the "Middle Class".

If we use the traditional definition of the Middle Class, the top 10% of wage earners LESS the top 1-3% (Who tended to be the Nobility), then an Increase will have minimal effect on their income (it will have some effect for as a general rule low income people spend their money, buying various items. Those items tend to be sold by people with slightly higher income, thus the money works its way to the Middle Class where it is lost to the Economy in the form of "savings".

This was known as early as the 1600s, increase income to the poor, the economy will boom, increase money to the top 10%, all of it will be lost in the form of "Savings". "Savings" are NOT good for an economy, until it is used to buy something (thus paying off Credit Card debt is "Savings" for the money is NOT being used to buy things).

Thus the economy gets the biggest kick from money getting into the hands of the lowest economic groups. The Bottom 25%.

Lets look at a graph:




http://en.wikipedia.org/wiki/Wealth_in_the_United_States

Please note all number are 2006 numbers:

The top 1% receive 34.6% of the wealth (Income $350,000 and up)
The Next 4% receive 24.3 of the Wealth (income $167,000 to $350,000)

Thus the top 5% of American Receives 58.9% of the wealth

The next 5% earns: 11.2 %

Thus the traditional "Middle Class" the pre WWII definition received 70.1% of all wealth in the US


Next 10% receives 12% of all income

Thus the top 20% of people get 82% of all wealth in the US. Income is over $92,000 a year in 2006

While the Traditional "Middle Class" is the top 10%, that definition has been the definition of "Middle Class" since WWII. Thus it is the top 20% of Income received or the top 40%?


The next 20% receives 10.9 % (People making 55-92,000 a year).

Thus if we use the term "Middle Class" to mean people receiving the top 40% of all income that excludes anyone making less then $75,000 a year.

The Next 20% receives 4% (People receiving $35 to $55,000 a year). This is the middle 20% of the traditional five 20% groups used in such comparisons. This is the true middle. Half the Population makes MORE, half makes less.


The bottom 40% receives .2 % (Making less then $35,000 a year)

The bottom 20% received less then $18,00 a year

The bottom 10% received less then $10,500 a year.

Lets look at those groups in terms of actual Income:




Thus what is "Middle Class" if we use my Client's definition that included Welfare Recipients is the cut off $55,000 a year? For that is 60% of the population?

Sorry, the problem with your response is you do NOT define what you mean by "Middle Class". Is it the top 10% less the top 1%? i.e Income less then $350,000 but more the $100,000?

Is it the middle 20%? Income $35-55,000?

Is it the lower 60%? Income from zero to $55,000

Is it the top 50% less the top 10%? $50,000 to $100,000

Is it excluding the top and bottom 20% (i,e, the middle 60%)? $18.500 to $92,000

I can safely say the top 1% is NOT in your definition of being in the "Middle Class", but which is your definition of "Middle Class"

Part of the problem is that in most surveys people put themselves in the Middle Class NOT the rich or poor. On the other hand if "Working Class" is an option, about half of the people calling themselves "Middle Class" defect to "Working Class". This reflects the US policy of saying the Post WWII economy lifted up the Working Class to Middle Class income. That was NOT completely true but it was the what was said.

My definition is the lowest 10% are the poor, that is people whose income is less the $10,500.

Above $10,500 to the 60% point (Income between $10,500 and $55,000 is the traditional Working Class.

Above that but below the top 5% is the Upper Middle Class, incomes from $55,000 to $100,000. I avoid the use of the term "Middle Class" for it has been so abused it can not be defined.