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The American Middle Class Becomes Extinct

Updated on September 5, 2012

The Plight of the American Middle Class

In Nineteenth Century Britain, Sidney and Beatrice Webb set out to solve the economic and political crisis of the day; that was the condition of the Working Class. As America advances into the Twenty First Century, a similar project may need to be envisioned and executed on behalf of the Middle Class.

The Numbers Speak For Themselves

The declining size of the Middle Class signals upward and downward economic mobility.
The declining size of the Middle Class signals upward and downward economic mobility. | Source
The Middle Class are a declining engine of economic growth
The Middle Class are a declining engine of economic growth | Source
Economic mobility has been sideways to downwards over the last decade
Economic mobility has been sideways to downwards over the last decade | Source
The cost of being Middle Class has risen
The cost of being Middle Class has risen | Source
Americans have borrowed to fund the rising cost of being Middle Class
Americans have borrowed to fund the rising cost of being Middle Class | Source

The Current Ecosystem

The jobs lost in the recession were more numerous and higher paying than the jobs created in the recovery
The jobs lost in the recession were more numerous and higher paying than the jobs created in the recovery | Source
Breakdown of the low paid job recovery
Breakdown of the low paid job recovery | Source
Medium paid jobs have been destroyed in the recession and lost in the recovery
Medium paid jobs have been destroyed in the recession and lost in the recovery | Source

The Conclusion

The American Middle Class has become indebted to maintain itself, rather than to move upwards. In the recession and recovery, the downward mobility vector has been greater than the upward one. Middle Class jobs that were lost in the recession have either not been replaced, or have been replaced with much lower paying jobs. The growth of lower paying jobs challenges the Middle Class ability to remain indebted to fund the maintenance of Middle Class status, without a fall in living costs.

The American Middle Class is at an inflection point; at which it can either continue its gradual demise or vanish rapidly. The Debt Crisis of 2008 was the wake up call for the Middle Class,when they realised that debt was not an option for maintaining their status. The Federal Government took up the debts, but the recovery has not created a Middle Class that is ready to take the baton back from the Government. What compounds the situation, is that the same Middle Class must assume the debts that the Federal Government has expanded in order to stimulate the recovery.

The solution is economic growth, however this must be qualified by saying that this growth must be in mid to higher paying jobs; in order for the Middle Class to stimulate the economy and pay the Federal Government's debts. In the absence of growth however, the tendency to create inflation to address the issues of income and debt gets stronger every day.

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    • KeySignals profile image
      Author

      Crowdsourcerer 4 years ago from Dubai

      Aha.... the USSA comrade.

    • ib radmasters profile image

      ib radmasters 4 years ago from Southern California

      Key Signals

      The middle class will shrink to the government employee as the predominant occupier.

      Without Income Tax? I wonder.

    • KeySignals profile image
      Author

      Crowdsourcerer 4 years ago from Dubai

      "I wonder how the Income Tax System will fair without a Middle Class?"

      Very important question.

    • ib radmasters profile image

      ib radmasters 4 years ago from Southern California

      I agree with your hub results.

      In addition, the other factor that I didn't see were the government employees. In the last fifty years the size and scope of the federal government has increased significantly.

      This reduces our GDP because the government doesn't contribute to the GDP, but it does reduce the number of people that can work in the private sector.

      While most of these workers are in the middle class, they will be the only survivors of that class.

      I wonder how the Income Tax System will fair without a Middle Class?

      Thanks

    • KeySignals profile image
      Author

      Crowdsourcerer 4 years ago from Dubai

      Your mother is/was a visionary.

    • gmwilliams profile image

      Grace Marguerite Williams 4 years ago from the Greatest City In The World-New York City, New York

      First, many high-paying blue collar jobs disappeared in the 1970s. Now, many white collar jobs are disappearing due to being either outsourced and/or eliminated. Many jobs now are medium to low wage service jobs. Of course, there are a few lucrative jobs but they are in the technical, medical, and/or business fields.

      Due to the outsourcing and elimination of jobs, many people are become declasse through no fault of their own. Older professionals with lucrative salaries are either being laid off and/or terminated to be replaced by younger employees who the company/corporation pay less in order to save costs. This is becoming quite a deleterious situation.

      People are losing ther homes and becoming homeless. This is indeed scary. It is going to get much much worse before it gets better. As my mother once predicted 40 years ago, it is going to be either the very rich or the very poor. I paid her no attention then but her words have an alarming accuracy now!

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