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Old 10-11-2010, 09:38 AM   #21
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The middle class is not a recent phenomena - it has been around since at least the middle ages, if not ancient times: Middle class - Wikipedia, the free encyclopedia Although the term "middle class" was not used, Ian Mortimer gives a very good break down of classes in the middle ages in "A Time Traveller's Guide to Medieval England").
I don't think the real question is whether or not the existence of a middle class is a "new" post-WW2 construct.

But I would say that a society with a significant majority of its people solidly in the middle class was a fairly recent phenomenon. The middle class will always continue to exist -- but the percentage of folks who are "middle class" is eroding, with a few becoming "wealthy" but most dropping down below what we would consider a middle class lifestyle.

Or perhaps more likely, the upper middle class may feel more like the middle middle class and the "middle middle class" may start gravitating toward the lower middle class. In other words, just as the definition of a "middle class" lifestyle rose sharply from (say) 1950 to 2000, the definition of that lifestyle may be entering a correction.
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Old 10-11-2010, 10:04 AM   #22
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I don't think the real question is whether or not the existence of a middle class is a "new" post-WW2 construct.
Thanks - perspective gets lost sometimes.
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Old 10-11-2010, 11:22 AM   #23
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I think on of the biggest factors in the decline of the middle class is that the jobs in the middle are disappearing. There are plenty of good-paying jobs for people with high demand skill sets, so the top 20% of the population is doing very well. There are also plenty of low-paying service jobs, so the bottom 40% are in the same boat they've always been in-- ie, poor but employed.

The other 40% are lossing ground as the middle skill jobs that pay $25/hour disappear, though. It is starting to look like most of those people are going to be working those <$10/hr service jobs down the road.
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Old 10-11-2010, 11:26 AM   #24
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The other 40% are lossing ground as the middle skill jobs that pay $25/hour disappear, though. It is starting to look like most of those people are going to be working those <$10/hr service jobs down the road.
I agree. There are certainly some in the middle class who are still "upwardly mobile" toward being more affluent. But for every one of those, I suspect there is more than one who is losing ground as more and more of the jobs they compete for are being offshored and those who are left are engaged in a "bidding war" with each other over the remaining crumbs, and employers can keep dropping wages and benefits (yes, they benefit from high unemployment). It's pretty sad, I think.

The worst part about businesses "privatizing the profits" of offshoring good jobs to "cheap" labor nations is that they are able to "socialize" the social and economic costs of unemployment in terms of unemployment insurance payouts, food stamps and other public assistance for the displaced workers.
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Old 10-11-2010, 11:37 AM   #25
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The worst part about businesses "privatizing the profits" of offshoring good jobs to "cheap" labor nations is that they are able to "socialize" the social and economic costs of unemployment in terms of unemployment insurance payouts, food stamps and other public assistance for the displaced workers.
I think the proper word is nationalize as in debt.
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Old 10-11-2010, 11:51 AM   #26
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Unwise financial decisions aside...

The issue(s) that challenge the middle class are the relatively recent unaffordability of housing, medical care, higher education, and taxation. Paying for those things, or not being able to afford such, causes many to fall out of the middle class.
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Old 10-11-2010, 12:23 PM   #27
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The issue(s) that challenge the middle class are the relatively recent unaffordability of housing, medical care, higher education, and taxation. Paying for those things, or not being able to afford such, causes many to fall out of the middle class.
I agree with you. And I also think this is not happening only in America. My mom lives in Europe and she is losing ground every year. Her property taxes just went up 38% this year, reimbursements of her medical costs by the state have been reduced and her co-op fees have doubled over the past 5 years. She feels squeezed out of her own home. And it's not just her. The erosion of the middle class' purchasing power has become the number 1 topic of conversation when I go to Europe. Even the upper middle class is starting to feel the pinch.
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Old 10-11-2010, 01:07 PM   #28
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Unwise financial decisions aside...

The issue(s) that challenge the middle class are the relatively recent unaffordability of housing, medical care, higher education, and taxation. Paying for those things, or not being able to afford such, causes many to fall out of the middle class.
In other words: For many people (if not most), incomes are failing to keep up with personal inflation rates. And as long as demand for the basics remains constant (or rising) and high unemployment allows employers to keep putting the squeeze on wages and benefits, it will continue.
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Old 10-11-2010, 01:33 PM   #29
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This discusssion reminds of the changing views of working and middle classes in England in the 70's as traditional laboring jobs were becoming more 'technical' and better paid.

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Old 10-11-2010, 09:33 PM   #30
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Even if you believe that society is divided into the "rich and clever" and the "poor and stupid", the continual wealth transfer to the "rich and clever" by exploiting the "poor and stupid" is not a viable strategy for long term economic stability, nor is it particularly moral.
I don't mind the clever becoming rich...it's just tough watching them pass it on to their not so clever relatives who sometimes wind up running things. Many big companies and the presidency are replete with examples.
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Old 10-12-2010, 03:35 PM   #31
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I don't mind the clever becoming rich...it's just tough watching them pass it on to their not so clever relatives who sometimes wind up running things. Many big companies and the presidency are replete with examples.
I'm not sure I can buy into the phenom of presidents "passing on" their
presidency to their children/wives/etc... I'm more inclined to think it's more
self inflicted group-think than super genius masterminding.
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The middle class (or lack thereof) seems to be...
Old 10-12-2010, 03:54 PM   #32
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The middle class (or lack thereof) seems to be...

... the current hot topic. Another story on the topic in which the author points out that the vast majority of "middle class" really are not, given their lack of assets.

Dear "Middle Class" Americans: Most Of You Are Debt Serfs With Zero Assets
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Old 10-12-2010, 03:59 PM   #33
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I'm not sure I can buy into the phenom of presidents "passing on" their
presidency to their children/wives/etc... I'm more inclined to think it's more
self inflicted group-think than super genius masterminding.
I didn't mean to imply there's any genius at all. More like dumb luck or dumb electorate. Could be money, perhaps being at the right place or in the right circles at the right time, or sometimes it just the last name. If I'm winning the monopoly game and my son gets to take my place when I leave, it's highly likely he will continue to win the game.
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Old 10-12-2010, 04:31 PM   #34
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... the current hot topic. Another story on the topic in which the author points out that the vast majority of "middle class" really are not, given their lack of assets.

Dear "Middle Class" Americans: Most Of You Are Debt Serfs With Zero Assets
OK. They showed the issue of wealth concentration. But there was no workable solution presented to upgrade the lower rungs.

If the implied solution is to confiscate the higher rungs wealth then, in my opinion, that is the route to poverty for everyone.
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Old 10-12-2010, 04:34 PM   #35
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The US has a large and thriving middle class IMHO. It is more described than well defined.

There is (are?) lots of data pointing to the concentration of wealth and declaring that upward mobility is at an end in the US. I havenít seen any good analysis to support the lack of upward mobility and have the impression that it may not be well analyzed.

Wealth and income are clearly concentrated, but 1) the drivers that affect the lowest income earners may not be the same as those that enable the highest, and 2) I havenít seen any good data that separates salary, non-risk investment income that is really compensation, and investment income resulting from risking capital. These need to be disaggregated to really understand them.

At the end of the day I suspect most US citizens are availed the options needed to be ďmiddle class membersĒ, mobility may be more difficult and require tough choices but is still there, and innovation will still find a greater the US to be the most receptive country in the world.

This is a subject that cries for more analysis and reasoning and less opinionating.
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Old 10-12-2010, 04:49 PM   #36
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OK. They showed the issue of wealth concentration. But there was no workable solution presented to upgrade the lower rungs.

If the implied solution is to confiscate the higher rungs wealth then, in my opinion, that is the route to poverty for everyone.

I certainly hope that the solution is not to confiscate wealth (other than the usual progressive tax rates). We should, however, look to impact the results of wealth concentration at the margins through tax policies, but that will not be sufficient.

The reason no one has put forth a workable solution is because the problem is deeply structural at this point IMHO. The basic answer is to have an expanding economy that is generating sustainable, well paying jobs. I donít see how this is remotely possible given the global arbitrage in wages, especially given the Chinese focus on pegging the yuan to the dollar to maintain their own employment levels.
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Old 10-12-2010, 05:06 PM   #37
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The reason no one has put forth a workable solution is because the problem is deeply structural at this point IMHO. The basic answer is to have an expanding economy that is generating sustainable, well paying jobs. I donít see how this is remotely possible given the global arbitrage in wages, especially given the Chinese focus on pegging the yuan to the dollar to maintain their own employment levels.
I agree. But I would also like to note that Americans are shunning respectable and well paying careers in science for example. DW's employer has to hire mostly foreign-born employees to fill vacant scientific positions. It's a sad day when, in a country of 300 millions with 10% unemployment, you have to fill some of your best paid positions with foreigners for lack of a qualified native workforce.
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Old 10-12-2010, 05:12 PM   #38
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I agree. But I would also like to note that Americans are shunning respectable and well paying careers in science for example. DW's employer has to hire mostly foreign-born employees to fill vacant scientific positions. It's a sad day when, in a country of 300 millions with 10% unemployment, you have to fill some of your best paid positions with foreigners for lack of a qualified native workforce.
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Old 10-12-2010, 05:13 PM   #39
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I agree. But I would also like to note that Americans are shunning respectable and well paying careers in science for example.
Shunning would be good!

I'm afraid we aren't turning out sufficiently educated Americans to fill the scientific jobs you're referring to and so companies out of necessity are turning to foreign students.
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Old 10-12-2010, 05:14 PM   #40
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I think it is odd to judge membership in the middle class by how many assets you own. Middle class concerns your place in society and, indeed, your wealth, but not in the sense how much your IRAs are worth, or whatever, but how well you can live. You can be deeply in debt, but if your credit cards still work so you can mostly buy what you want, and live pretty well, you can still be middle class, or even upper class. There's a confusion between means and ends here -- owning many assets may enable you to live well, and impress your neighbors, but it's not the assets that count in reckoning your class in society.
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