The United States was once known for its middle class who formed the backbone of many industries in the nation. However, the American middle class no longer enjoys the comfortable way of life that used to be so easy to achieve. Data from economists shows that the United States middle class seems to be rapidly shrinking as the gap between the insanely wealthy and the very poor continues to grow.
According to our gross domestic product, the United States continues to be the wealthiest nation in the world. However, a lot of that wealth belongs to just a few people, and it is now increasingly common for people to be in dire financial straits. Research from the Pew Research Center shows some concerning trends.
In 1971, most of the nation was middle class while the number of people in either the upper or lower income classes was significantly less than the number of people in the middle class. That ratio has dropped significantly in modern times. Currently, there are more lower or upper class people than middle class people. Instead of 62 percent of the nation’s wealth belonging to the middle class, only 43 percent of the country’s wealth now exists among middle class people.
A lot of people see this as a sign of general economic trends across the world, but this is not actually the case. In other countries, the middle class continues to flourish. The United States middle class is actually far poorer than the middle classes of other countries. An analysis of the middle class share of wealth by country reveals that the United States is far behind almost everyone. In addition to affluent countries like Japan, Belgium, and Germany, the United States middle class is also far behind countries such as India and Brazil that have many economic problems.
Economists theorize that there are a few underlying factors responsible for these alarming trends. First of all, the middle class was the demographic most harmed by the housing bubble crash of 2008, and many are just starting to recover from the mountains of debt they incurred during this period. The other issues are all directly related to an income rate that is not growing at the same rate as inflation. The cost for college, homes, cars, and food have all skyrocketed while most middle class people are not receiving any significant pay increases.
All of this combines to make it difficult for many people to afford a middle class lifestyle. Corporations continue to increase their profits, but most middle and lower class people are starting to have trouble making ends meet. It is interesting to note that the middle class income share has declined at roughly the same rate as union memberships. Without any way of sticking together for workers’ rights, many people are finding that they can no longer find decently paying jobs, even if they have a college education.
Sadly, if this trend continues, the United States middle class may be almost entirely gone in just a few decades. While other nations continue to have middle class growth, the American tendency to prioritize the needs of big businesses over the needs of the average person is greatly harming our middle class. In the long run, this may end up hurting the nation’s economy because people will no longer be able to afford many of the luxury products that make up so much of the market.