Are there any measures that show objectively how the middle class is being destroyed?
seeing layoff after layoff after layoff over the past few years, yet theyre selling the economy as GREAT because theres a ton more low paid jobs and part time jobs.
Are there any measures that show objectively how the middle class is being destroyed?
If by destroyed, you mean shrinking from 61% in 1971 to 51% of households now, then yes, there is data for that.
But that 10% decline was ~8% moving into above middle class and ~2% moving below middle class.
So yes, the middle class shrunk, because more people got richer. I'd also hardly call it destroyed - more like the % of people in various age groups has shifted, and people stay in education longer (meaning a higher % below middle), but those people over a lifetime will likely also become above middle class.
When you do the simple math that in 1970 about 25% of 18-24 were in college, and that % is now around 50%, and you factor that in, you can compute (or check Census/BLS reports for the same) to see outside people staying in school longer, the middle class is shrinking due to people getting richer.
I think the perception of the middle class shrinking is that it is
1) true there are more people in lower middle class than before and less in the middle
2) even for those who moved “up” to upper middle class, the buying power has been stripped by rapidly rising housing prices, medical, and education costs. So even with a high income, disposable income has likely decreased. Those items have far exceeded inflation for years
3) much of the ability of families to move to UMC has been on the backs of two working parents. Which itself entails expensive childcare (often more than the mortgage), and a huge decrease in family leisure time and sleep. But with those rising expenses in 2), a single earner is not feasible.
true there are more people in lower middle class than before and less in the middle
Yes, because as I pointed out more people stay in college longer ( poor now but not for long), more people retire early due to good stock markets (simply read BLS/Census data).
Here's a simple way to check the rough argument: Suppose on avg it takes 5 years to post HS education. A working career is about 50 years. So 10% of a college student is spent poor with near certainty.
25% of people went in 1970. That accounts for (1/4)*(1/10) = 2.5% of the population being in poverty, yet they will mostly do quite well over a lifetime.
Now about 50% go to college. That's a 2.5% increase in the poverty rate, yet in reality people over a lifetime are going to be richer.
Do the same thing to retirees, to early retirement due to stock growth, early retirement from COVID where many people also decided to retire early since they could afford it, and your increase in the poor evaporates.
Also, US poverty rate puts one in the top 15% of world incomes, so our poverty rate is a pretty nice income. And poverty is measured pre-govt transfers, which provides a lot more income.
I just gave you the stats, and you can check them. Stop repeating things for which I pointed out solid and provably correct reasons your interpretation is wrong. If you want to refute there are more people in college, or that people aging into retirement or retiring early are not increasing then do so.
Simply do the math, or read Census or BLS data.
the buying power has been stripped by
Inflation adjusted median wages has risen significantly [1]. So no, buying power has not been stripped. When you pick only a few items but ignore the overall purchasing power of an income you are making reasoning errors. This is also true of you break it down by decile or quintile - BLS/FRED/Census again has all the data you need. You continually cherry pick the extreme edges of things and ignore the actual data for the entire thing.
much of the ability of families to move to UMC has been on the backs of two working parents
Individual income, as shown above, has greatly increased relative to inflation. The reason people use two incomes is they have more than twice as much stuff as 1970: median house sizes have more than doubled, more cars per family, more TVs, massively more entertainment expenses, more of everything. If a family wanted to live like 1970 then one income now is more than enough (provably so, since again, inflation adjusted wages since 1970 have increased significantly).
In general, be wary of Newsweek articles
Nothing in that article is different than you can source yourself from the root data sources for all this knowledge: Census, BLS, FRED, and a few other stats gathering agencies. If you dispute the stats in the article, present your stats and sources. Stop pretending cherry picked anecdotes replaces analysis of the entire dataset.
I would expect that a more charitable reading of GP would say that people from the lower class have not come in the middle class as much as they had earlier?
At any rate, imo for stability to exist, every generation must _feel_ better off than the previous on average.
that people from the lower class have not come in the middle class as much as they had earlier
When famous economist Chetty et. al. [1] at the Harvard Equal Opportunity project went to prove this, they were surprised to find it's not true. They obtained never before access to lifetime IRS income statements to see how people moved over time, and they found that social mobility has not changed from around 1960 on. (Other studies had already shown this to be true for the first half of the 20th century). Other studies since theirs have obtain similar results. Here's a summary article about their results [2].
See my post above - they have ample data. The majority of people in the lowest income quintile are not there 10 years later. Also the majority of those in the top quntile do not stay there long either - for both ends there is powerful reversion to the middle.
Here's [1] plenty of data and graphs illustrating mobility over different time frames
In this case, John Deere has skated by with incredibly exploitative business practices for years. Their insular repair scheme has led to an over-hiring of official licensed support engineers that shouldn't persist in a competitive market.
This is a broader trend in the US economy that will self-correct as regulators become less recalcitrant.
The mechanics are not independents, in this case. They are specifically trained, retained and dispatched by John Deere, for paying John Deere customers. These are salaried people that are more or less employed as part of a scheme to prevent price-competitive repair from existing, not mom-and-pop wholesalers fixing a radiator.
For example I live in Asuncion, Paraguay where the median wage is $420/month.
Vancouver, Canada has a purchasing power index that is 220% as high. Eg. The average person in Vancouver makes as much as a Paraguayan making $840/month living in Asuncion.
You could also compare NY to Cali, Colombia where NY has a score of 100 (by definition) and Cali has a score of 48. So the average Colombian is 1/2 as wealthy as the average New Yorker, or 1/3 the average Austinite with a score of 170.
The American middle class is doing amazingly well by moving to where they are exporting everyone’s jobs to. They double their income by not paying taxes anymore, and then compound that with a 1/3rd cost of living.
Comments
Are there any measures that show objectively how the middle class is being destroyed?
seeing layoff after layoff after layoff over the past few years, yet theyre selling the economy as GREAT because theres a ton more low paid jobs and part time jobs.
If by destroyed, you mean shrinking from 61% in 1971 to 51% of households now, then yes, there is data for that.
But that 10% decline was ~8% moving into above middle class and ~2% moving below middle class.
So yes, the middle class shrunk, because more people got richer. I'd also hardly call it destroyed - more like the % of people in various age groups has shifted, and people stay in education longer (meaning a higher % below middle), but those people over a lifetime will likely also become above middle class.
When you do the simple math that in 1970 about 25% of 18-24 were in college, and that % is now around 50%, and you factor that in, you can compute (or check Census/BLS reports for the same) to see outside people staying in school longer, the middle class is shrinking due to people getting richer.
I guess things aren't at negative as you imply.
https://www.newsweek.com/america-middle-class-shrinking-1913...
I think the perception of the middle class shrinking is that it is
1) true there are more people in lower middle class than before and less in the middle
2) even for those who moved “up” to upper middle class, the buying power has been stripped by rapidly rising housing prices, medical, and education costs. So even with a high income, disposable income has likely decreased. Those items have far exceeded inflation for years
3) much of the ability of families to move to UMC has been on the backs of two working parents. Which itself entails expensive childcare (often more than the mortgage), and a huge decrease in family leisure time and sleep. But with those rising expenses in 2), a single earner is not feasible.
In general, be wary of Newsweek articles, this is not the magazine we grew up with: https://www.thedailybeast.com/how-newsweek-has-gone-down-the...
Yes, because as I pointed out more people stay in college longer ( poor now but not for long), more people retire early due to good stock markets (simply read BLS/Census data).
Here's a simple way to check the rough argument: Suppose on avg it takes 5 years to post HS education. A working career is about 50 years. So 10% of a college student is spent poor with near certainty.
25% of people went in 1970. That accounts for (1/4)*(1/10) = 2.5% of the population being in poverty, yet they will mostly do quite well over a lifetime.
Now about 50% go to college. That's a 2.5% increase in the poverty rate, yet in reality people over a lifetime are going to be richer.
Do the same thing to retirees, to early retirement due to stock growth, early retirement from COVID where many people also decided to retire early since they could afford it, and your increase in the poor evaporates.
Also, US poverty rate puts one in the top 15% of world incomes, so our poverty rate is a pretty nice income. And poverty is measured pre-govt transfers, which provides a lot more income.
I just gave you the stats, and you can check them. Stop repeating things for which I pointed out solid and provably correct reasons your interpretation is wrong. If you want to refute there are more people in college, or that people aging into retirement or retiring early are not increasing then do so.
Simply do the math, or read Census or BLS data.
Inflation adjusted median wages has risen significantly [1]. So no, buying power has not been stripped. When you pick only a few items but ignore the overall purchasing power of an income you are making reasoning errors. This is also true of you break it down by decile or quintile - BLS/FRED/Census again has all the data you need. You continually cherry pick the extreme edges of things and ignore the actual data for the entire thing.
Individual income, as shown above, has greatly increased relative to inflation. The reason people use two incomes is they have more than twice as much stuff as 1970: median house sizes have more than doubled, more cars per family, more TVs, massively more entertainment expenses, more of everything. If a family wanted to live like 1970 then one income now is more than enough (provably so, since again, inflation adjusted wages since 1970 have increased significantly).
Nothing in that article is different than you can source yourself from the root data sources for all this knowledge: Census, BLS, FRED, and a few other stats gathering agencies. If you dispute the stats in the article, present your stats and sources. Stop pretending cherry picked anecdotes replaces analysis of the entire dataset.
[1] https://fred.stlouisfed.org/series/LES1252881600Q
I would expect that a more charitable reading of GP would say that people from the lower class have not come in the middle class as much as they had earlier?
At any rate, imo for stability to exist, every generation must _feel_ better off than the previous on average.
When famous economist Chetty et. al. [1] at the Harvard Equal Opportunity project went to prove this, they were surprised to find it's not true. They obtained never before access to lifetime IRS income statements to see how people moved over time, and they found that social mobility has not changed from around 1960 on. (Other studies had already shown this to be true for the first half of the 20th century). Other studies since theirs have obtain similar results. Here's a summary article about their results [2].
[1] https://scholar.google.com/scholar?hl=en&as_sdt=0%2C15&q=che...
[2] https://www.cfr.org/blog/new-harvard-study-us-social-mobilit...
The world was stable for a loooong time with no noticeable increase in standard of living.
Yeah this is exactly what Im asking to be honest.
Thanks for clarifying this.
How difficult is it to escape the lower class.
See my post above - they have ample data. The majority of people in the lowest income quintile are not there 10 years later. Also the majority of those in the top quntile do not stay there long either - for both ends there is powerful reversion to the middle.
Here's [1] plenty of data and graphs illustrating mobility over different time frames
[1] https://www.frbsf.org/research-and-insights/publications/eco...
In this case, John Deere has skated by with incredibly exploitative business practices for years. Their insular repair scheme has led to an over-hiring of official licensed support engineers that shouldn't persist in a competitive market.
This is a broader trend in the US economy that will self-correct as regulators become less recalcitrant.
Finally, those mechanics were getting paid too much. I’m glad someone is shutting down this practice so their wages can be lowered.
The mechanics are not independents, in this case. They are specifically trained, retained and dispatched by John Deere, for paying John Deere customers. These are salaried people that are more or less employed as part of a scheme to prevent price-competitive repair from existing, not mom-and-pop wholesalers fixing a radiator.
TRUE LOVE IS POSSIBLE ONLY IN THE NEXT WORLD -- FOR NEW PEOPLE
IT IS TOO LATE FOR US
WREAK HAVOC ON THE MIDDLE CLASS
- Disco Elysium
Yes, go into numbeo and look at the purchasing power indexes.
https://www.numbeo.com/cost-of-living/rankings_current.jsp?d...
For example I live in Asuncion, Paraguay where the median wage is $420/month.
Vancouver, Canada has a purchasing power index that is 220% as high. Eg. The average person in Vancouver makes as much as a Paraguayan making $840/month living in Asuncion.
You could also compare NY to Cali, Colombia where NY has a score of 100 (by definition) and Cali has a score of 48. So the average Colombian is 1/2 as wealthy as the average New Yorker, or 1/3 the average Austinite with a score of 170.
The American middle class is doing amazingly well by moving to where they are exporting everyone’s jobs to. They double their income by not paying taxes anymore, and then compound that with a 1/3rd cost of living.