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Why is the Middle Class Disappearing?

Updated on December 14, 2013

The Middle Class are Disappearing!

People in Western nations - such as the USA, Canada, Japan and the Western European nations - are all finding that the middle class is disappearing. People who used to form the majority of people in these countries are losing their jobs and are either reinventing themselves or are being swallowed by poverty. The vast majority are being swallowed by poverty; they're going down, not up. What's happening? Why is this happening?

The Cold Truth

The harsh truth is that the middle class in Western countries is not disappearing.

The middle class in the richest nations in the world are merely being dragged down to the level of the middle classes in less-wealthy nations.

If you look at the entire world as one big country, you'll understand. For example, if the world was one big country:

  • All Americans, Japanese, Western Europeans would be considered "upper class".
  • All Taiwanese, South Koreans, Chileans would be considered "middle class".
  • All Haitians, Indians, Tanzanians would be considered "lower class".

Just as any one country has people at all economic levels, so the world has entire countries at the various economic levels.

So, you will now understand that the people of the middle class of the richest nations are actually just being dragged down to the middle class level of the nations that are not rich and powerful, but are not poor, either (i.e. developing nations; such as Taiwan, South Korea, Chile, Brazil, Bahrain, Argentina, etc.).

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Why Are They Being Dragged Down?

Basically, you can blame the Digital Revolution, which lead the entire world to now be in the Information Age. We are now in the Information Age and technology has changed, is changing, and will continue to change our world.

According to Wikipedia's article on the Information Age, there are several factors which have caused this dragging-down of Western middle classes.

  • Traditional middle-class jobs are being automated; it's cheaper to buy and run a robot than it is to pay the high wages of workers.
  • Traditional middle-class jobs are being outsourced to foreign countries; technology has enabled the employment of far-away workers who will accept lower pay.

All this is bad news for the middle class of richer countries - but it's good news for the middle class of poorer countries. At the same time that the middle class of rich countries is getting much less pay; the middle class of poor countries is getting much more pay.

You could say that a re-balancing of wages on a global scale is happening. No longer are wages set based upon the national economy; they are now set based upon the global economy. This is a direct result of globalization and in hindsight, should come as no surprise.

Save Yourself

  • Re-train yourself
  • Do your own business
  • Move to another country

Probable Effects of the Disappearing Middle Class

  • The wealthiest nations in the world will not be as comparatively wealthy in the future as they once were.
  • Countries that used to see net immigration might start to see net emigration (i.e. more people leaving than coming in).
  • The class divide in these wealthy nations will mirror that of the traditional class divide: few people are rich, most people are poor, nobody in between.
  • Looking on the bright side, what could happen is that the middle class that is being dragged down reinvents itself and reasserts itself, thus continuing to be the middle class of rich nations and the upper class of the entire world.

What Can You Do?

If you're of the middle class of a rich nation... first, consider yourself lucky to be born with such privilege! Second, don't give up. You either fight on or you risk being dragged down like most other people.

  1. Train or re-train yourself for a highly-skilled profession (i.e. a job that relies on your expertise, rather than on your physical labor or plain experience); such as engineer, doctor, lawyer, etc.
  2. Build a business for yourself; a service business is the simplest (restaurant, cafe, etc.), but you should always seek to innovate.
  3. Get creative! Become someone who sees financial reward due to the fruit of his or her imagination; designer, artisan, artist, creator, inventor, etc.
  4. Move to a country where the middle class is rising and things are cheap; Taiwan is a good example. The average person in the country makes just over $20,000 USD per month, but because things are so cheap, people there live one of the top-20 lifestyles in the world (Check out the source).

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    • Shawn Chong profile image
      Author

      Shawn Chong 3 years ago from Taipei, Taiwan

      Thanks for the comment, HSchneider.

      I really do hope most of the disappearing middle class re-educate themselves and move up, rather than down.

    • profile image

      Howard Schneider 3 years ago from Parsippany, New Jersey

      Excellent insights, Shawn. The new information age has leveled the playing field tremendously allowing countries to catch up rapidly. This was already occurring but technology has sent this into overdrive. Your remedies for the middle classes in developed countries is also correct. Constant and improved education is needed to remain on the cutting edge.