Is The Middle Class Really Disappearing?

[Hayabusa Rider]

I still believe that wages aren't declining and statistics are being fudged to make the situation look bad. I am a big supporter of Capitalism but I still agree that free trade has done more harm than good for the US, its only lead to more jobs being lost to China which really does cause a lot of the worlds problems.

A key metric has been in use since the '20s so the statistics are consistent. If anything they are too generous since purchasing power isn't taken into account. Consider disputable income. The lower the income the greater the impact of things like driving matter. Since transportation costs account for a higher percentage of income, theres less left over. Now if I were in the top 0.1%, the difference between $2 & $4 gallon isn't significant. To others it's staggering.

Nevertheless neither party address jobs nor income. The Reps pretend all is well and the Dems just want to tax as if that magically created jobs.

The number one economic concern is good jobs, not getting government more, on a vague pretense that doing so will create prosperity. It most certainly will not.

We need a reasoned trade policy which encourages jobs here.

 

[Incorruptible]

A key metric has been in use since the '20s so the statistics are consistent. If anything they are too generous since purchasing power isn't taken into account. Consider disputable income. The lower the income the greater the impact of things like driving matter. Since transportation costs account for a higher percentage of income, theres less left over. Now if I were in the top 0.1%, the difference between $2 & $4 gallon isn't significant. To others it's staggering.

Nevertheless neither party address jobs nor income. The Reps pretend all is well and the Dems just want to tax as if that magically created jobs.

The number one economic concern is good jobs, not getting government more, on a vague pretense that doing so will create prosperity. It most certainly will not.

We need a reasoned trade policy which encourages jobs here.

Agree that both parties are screwing the American people. NAFTA really shouldn't have been brought in, it only caused the loss of jobs and its also a way to create a North American Union.

The US must stand up to China which actually devalues their currency and the US cant compete with them which isn't fair.

 

[Jhhnn]

Nevertheless neither party address jobs nor income. The Reps pretend all is well and the Dems just want to tax as if that magically created jobs.

You're really smarter than that, arguing against a strawman. Dems create & sustain jobs with govt spending. Repubs just promote hoarding by laying off workers of all sorts, damping demand. That's what's really happening in the private sector- a liquidity trap.

The middle class isn't so much disappearing as being beaten down to working class, who are, in turn, being beaten down to near poor & poor.

Income has shifted radically to the top 1% over the last 30 years, for a variety of reasons. Offshoring. Automation. Efficiency. Tax cuts at the top, which, when invested, double every 10 years at 7% average rate of return. A 5% $10K taxcut invested in 1982 is $80K today. if you can hold onto that taxcut for another 30 years, keep investing, the amount of money is quite enormous. If you're rich enough to be part of a hedge fund or PE group, your investments can follow the market tax free, until you cash out. Today, you pay only 15% when you do. As part of a PE group, you can pay yourself special dividends with money borrowed in another company's name, a la Bain Capital. When you're big enough, you create offshore subsidiaries, avoid US corporate taxes with transfer pricing, putting the profit in the subsidiaries. You then re-invest as you see fit.

None of those strategies are available to middle wage earners, obviously. Even when they do invest, it often just turns over into the pockets of wealthy insiders who play the market a helluva lot better than the average Joe.

It's all about increased financialization of the economy, where money is made by manipulating money, not by actually producing much of anything. In that, the guys at the top don't need many workers to do so.

Add a nice boom/bust cycle in housing, follow it up with deflation if possible, so that underwater homeowners really get screwed- the more they pay, the more they owe in terms of value. Cut jobs, cut wages, because the more you do so, the more valuable your hoarded liquidity becomes, risk free.

The perps? Give 'em another tax cut, so they'll "invest" to "create jobs" even if that's only in your dreams.

 

[Incorruptible]

You're really smarter than that, arguing against a strawman. Dems create & sustain jobs with govt spending. Repubs just promote hoarding by laying off workers of all sorts, damping demand. That's what's really happening in the private sector- a liquidity trap.

The middle class isn't so much disappearing as being beaten down to working class, who are, in turn, being beaten down to near poor & poor.

Income has shifted radically to the top 1% over the last 30 years, for a variety of reasons. Offshoring. Automation. Efficiency. Tax cuts at the top, which, when invested, double every 10 years at 7% average rate of return. A 5% $10K taxcut invested in 1982 is $80K today. if you can hold onto that taxcut for another 30 years, keep investing, the amount of money is quite enormous. If you're rich enough to be part of a hedge fund or PE group, your investments can follow the market tax free, until you cash out. Today, you pay only 15% when you do. As part of a PE group, you can pay yourself special dividends with money borrowed in another company's name, a la Bain Capital. When you're big enough, you create offshore subsidiaries, avoid US corporate taxes with transfer pricing, putting the profit in the subsidiaries. You then re-invest as you see fit.

None of those strategies are available to middle wage earners, obviously. Even when they do invest, it often just turns over into the pockets of wealthy insiders who play the market a helluva lot better than the average Joe.

It's all about increased financialization of the economy, where money is made by manipulating money, not by actually producing much of anything. In that, the guys at the top don't need many workers to do so.

Add a nice boom/bust cycle in housing, follow it up with deflation if possible, so that underwater homeowners really get screwed- the more they pay, the more they owe in terms of value. Cut jobs, cut wages, because the more you do so, the more valuable your hoarded liquidity becomes, risk free.

The perps? Give 'em another tax cut, so they'll "invest" to "create jobs" even if that's only in your dreams.

I dont think I have seen a more biased post, both parties have raped the middle class

 

[Jhhnn]

I dont think I have seen a more biased post, both parties have raped the middle class

Pure denial via false equivalency, one of your favorite methods of resolving cognitive dissonance. It's a symptom of ideological snakebite.

 

[rchiu]

You're really smarter than that, arguing against a strawman. Dems create & sustain jobs with govt spending. Repubs just promote hoarding by laying off workers of all sorts, damping demand. That's what's really happening in the private sector- a liquidity trap.

The middle class isn't so much disappearing as being beaten down to working class, who are, in turn, being beaten down to near poor & poor.

Income has shifted radically to the top 1% over the last 30 years, for a variety of reasons. Offshoring. Automation. Efficiency. Tax cuts at the top, which, when invested, double every 10 years at 7% average rate of return. A 5% $10K taxcut invested in 1982 is $80K today. if you can hold onto that taxcut for another 30 years, keep investing, the amount of money is quite enormous. If you're rich enough to be part of a hedge fund or PE group, your investments can follow the market tax free, until you cash out. Today, you pay only 15% when you do. As part of a PE group, you can pay yourself special dividends with money borrowed in another company's name, a la Bain Capital. When you're big enough, you create offshore subsidiaries, avoid US corporate taxes with transfer pricing, putting the profit in the subsidiaries. You then re-invest as you see fit.

None of those strategies are available to middle wage earners, obviously. Even when they do invest, it often just turns over into the pockets of wealthy insiders who play the market a helluva lot better than the average Joe.

It's all about increased financialization of the economy, where money is made by manipulating money, not by actually producing much of anything. In that, the guys at the top don't need many workers to do so.

Add a nice boom/bust cycle in housing, follow it up with deflation if possible, so that underwater homeowners really get screwed- the more they pay, the more they owe in terms of value. Cut jobs, cut wages, because the more you do so, the more valuable your hoarded liquidity becomes, risk free.

The perps? Give 'em another tax cut, so they'll "invest" to "create jobs" even if that's only in your dreams.

Blah blah blah, 1% this 1% that but you people never address the fact that

Quote from Article

The percentage of families that have an income of more than $75,000 a year has tripled from 9% to 27%. But it’s not just the rich that are getting richer. Virtually every income group has been lifted by the tide of growth in recent decades.

-----

American industries has shifted from low wage, low value adding to high wage, high value adding ones. People don't keep up their skill, education up to speed with the shift is going to get lost in this transition. People who keep up, makes much more.

But yeah, socialist with their simple brain is gonna keep blaming the rich, the 1%, the invisible force to beat down the working class, when this is a natural shift of an economy that is becoming more advanced, developed with higher value adding business that focus on intellectual labor force instead of manual labor force.

 

[nehalem256]

The biggest problem I see is stability.

Lets say you go to college and land the good paying job. What are the chances of you keeping that job for years, or even decades? How long will it take you to find a similar paying job in the same city?

The only honest answer I can see are not good. Which basically means you have to be crazy to purchase a house. Which has major disastrous impacts on the economy. It delays the housing recovery. It makes it less likely for you to make purchases in related household goods like lawnmowers, furniture, etc. It decreases social stability.

And this is really close to the best case scenario.

 

[Jhhnn]

Blah blah blah, 1% this 1% that but you people never address the fact that

Quote from Article

The percentage of families that have an income of more than $75,000 a year has tripled from 9% to 27%. But it’s not just the rich that are getting richer. Virtually every income group has been lifted by the tide of growth in recent decades.

That's what happens with hogwash inflation figures. People earning AGI of $75K/yr in 1967 were part of the 1%. Hell, they were very near the top 1% in 1980-

http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0

-----

American industries has shifted from low wage, low value adding to high wage, high value adding ones. People don't keep up their skill, education up to speed with the shift is going to get lost in this transition. People who keep up, makes much more.

As if the shift doesn't demand fewer workers, anyway. Un & under employment currently spans nearly all education levels & areas of expertise. Better educated people are generally better off than the rest, but it's not as if enormous numbers of job openings exist to cover everybody, regardless of education. There are more people with degrees than jobs for them to fill.

But yeah, socialist with their simple brain is gonna keep blaming the rich, the 1%, the invisible force to beat down the working class, when this is a natural shift of an economy that is becoming more advanced, developed with higher value adding business that focus on intellectual labor force instead of manual labor force.

An observation that solves nothing, actually serves as an argument for more socialism rather than less if we're to remain a cohesive society.

 

[Doppel]

I more or less refuse to believe that adjusted for inflation those figures in the OP's first link are accurate.

 

[rchiu]

That's what happens with hogwash inflation figures. People earning AGI of $75K/yr in 1967 were part of the 1%. Hell, they were very near the top 1% in 1980-

http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0

-----

As if the shift doesn't demand fewer workers, anyway. Un & under employment currently spans nearly all education levels & areas of expertise. Better educated people are generally better off than the rest, but it's not as if enormous numbers of job openings exist to cover everybody, regardless of education. There are more people with degrees than jobs for them to fill.

An observation that solves nothing, actually serves as an argument for more socialism rather than less if we're to remain a cohesive society.

Pff, that just show how much you know about economy. Do you know what real income means? That is the income after adjustment for inflation. The figure is already adjusted for inflation, and your statement is exactly saying what I am already say, more people joining the rank of $75k income now than the past.

And no, well educated people with the right skills get great jobs and high pay. Only those with education that doesn't teach employable skills don't get good jobs..

 

[Ninjahedge]

$75K/year is not enough to cover my mortgage and property tax.

$75K sucks.

CONGRATS! More people are earning less than what they need in most of the populated areas of the US to live comfortably!!!! WOO!

 

[cybrsage]

Wow, you either own too much of a house, or you need to move to a more affordable area.

 

[werepossum]

Pure denial via false equivalency, one of your favorite methods of resolving cognitive dissonance. It's a symptom of ideological snakebite.

LMAO

Everyone who doesn't agree that your party is absolutely right on every issue for all time and that Republicans are absolutely wrong on every issue for all time is suffering from ideological snakebite and cognitive dissonance. Even Craig isn't quite that bizarrely biased. Congrats, I suppose - at least you're accusing the world of TWO conditions. You hang in there Skippy, you're making real progress!

 

[werepossum]

$75K/year is not enough to cover my mortgage and property tax.

$75K sucks.

CONGRATS! More people are earning less than what they need in most of the populated areas of the US to live comfortably!!!! WOO!

Ever notice how many people in this country are either useless parasites holding you down or worthless gluttons with far more than they need who are hoarding what should be yours? Weird, huh?

I keed, I keed!

 

[the DRIZZLE]

Add a nice boom/bust cycle in housing, follow it up with deflation if possible, so that underwater homeowners really get screwed- the more they pay, the more they owe in terms of value. Cut jobs, cut wages, because the more you do so, the more valuable your hoarded liquidity becomes, risk free.

The perps? Give 'em another tax cut, so they'll "invest" to "create jobs" even if that's only in your dreams.

Perhaps you haven't noticed the fact that the government has been using every tool they can think of to prevent asset prices from deflating. The last thing the banks want is to foreclose on your house.

The common sense logic that inflation hurts those with money while benefiting debtors is not entirely true. The wealthy have access to investment strategies to protect against inflation that may be feasible for the middle class. The real victims of inflation are those that need to invest in fixed income producing assets like middle class retirees.

Conversely, deflation after a housing bubble is far more likely to hurt the financial elite than the middle class. Remember in non-recourse states the most the bank can get is the market value of the house less foreclosure costs. Essentially the homeowner has a call option on real estate values. The bank would much rather keep the asset bubble inflated and take the inflation loss, especially when the Fed has completely distorted the debt markets which allows them borrow at negative real interest rates.

 

[Zebo]

It's done gone. My grandpa paid cash for a house. My parents took a loan but only one worked. Today both work and owe bank for everything they got.

 

[WhipperSnapper]

The middle class is not disappearing. It's just "right-sizing" to third world standards.

 

[Ninjahedge]

Ever notice how many people in this country are either useless parasites holding you down or worthless gluttons with far more than they need who are hoarding what should be yours? Weird, huh?

I keed, I keed!

That was a worthy post.

Worthy enough for me to POOP ON!

 

[Ninjahedge]

It's done gone. My grandpa paid cash for a house. My parents took a loan but only one worked. Today both work and owe bank for everything they got.

Zeb, in all fairness, have you looked at the size of the house your parents, or grandparents lived in?

Our standards have gotten so over inflated we somehow think we all need a 270 Hp V6 sedan as "standard". Places where every room has to have enough space for a home entertainment center and walk in closet. Houses where every kid has their OWN room, and less than 2.5 bathrooms is "slumming it".


Agreed, now that 3br 1.5 bath ranch in the 'burbs can cost you $350K (instead of the $30K it cost back in the 70's), but our whole baseline has been so unrealistically shifted it makes it hard to be "average" in anything anymore.

 

[nehalem256]

It's done gone. My grandpa paid cash for a house. My parents took a loan but only one worked. Today both work and owe bank for everything they got.

But on the flip side. I work in the same basic job is my dad. But in the early 80s he could barely afford to buy a house, whereas I am sure I could do so comfortably. It would just be stupid for me to buy a house given the state of the economy.

 

[jackstar7]

...more people joining the rank of $75k income now than the past....

This overlooks an important distinction: individuals making over $75k vs. families (often multi-income) earning over $75k.

You're talking about the former, not the latter, and in so doing, you're off.

 

[Exterous]

Zeb, in all fairness, have you looked at the size of the house your parents, or grandparents lived in?

NPR did a study/reported on a study about this. The average house size has gone from 1000 sq ft in 1950 to 2400 sg ft in in 2006 even though the average family size has shrunk

 

[Ninjahedge]

Yep.

I am not saying people do not deserve to live in bigger places, but our standards have gone WAY off track and it is hard to rein that back in.

TRY finding a 1000sf house in a neighborhood with a decent school system and under an hour from NYC by mass transit. It is nearly impossible. And those you DO find are elevated in price due to the possible expansion on the property lot.