Saturday, May 14, 2016

The American middle class is losing ground in metropolitan areas

    The American middle class is losing ground in metropolitan areas across the country, affecting communities from Boston to Seattle and from Dallas to Milwaukee. From 2000 to 2014 the share of adults living in middle-income households fell in 203 of the 229 U.S. metropolitan areas examined in a new Pew Research Center analysis of government data. The decrease in the middle-class share was often substantial, measuring 6 percentage points or more in 53 metropolitan areas, compared with a 4-point drop nationally.

    The shrinking of the middle class at the national level, to the point where it may no longer be the economic majority in the U.S., was documented in an earlier analysis by the Pew Research Center. The changes at the metropolitan level, the subject of this in-depth look at the American middle class, demonstrate that the national trend is the result of widespread declines in localities all around the country.

    The widespread erosion of the middle class took place against the backdrop of a decrease in household incomes in most U.S. metropolitan areas. Nationwide, the median income of U.S. households in 2014 stood at 8% less than in 1999, a reminder that the economy has yet to fully recover from the effects of the Great Recession of 2007-09. The decline was pervasive, with median incomes falling in 190 of 229 metropolitan areas examined. Goldsboro ranked near the bottom with a loss of 26% in median income. Midland bucked the prevailing trend with the median income there rising 37% from 1999 to 2014, the greatest increase among the areas examined. 4

In other words, households may have moved from the middle- to upper-income tier simply by staying put or perhaps increasing income only a modest amount. Those households that dropped into the lower-income tier from the middle lost even more income than the median dropped, outpacing the economic downturn and losing even more ground than these comparisons suggest.

Some of these issues relate to local economies, some to the national stagnation that has followed the Great Recession. But this study makes a good data point to explain the political environment of this cycle and the anger that has fueled it. Perhaps nothing might explain it better than the fact that the greater DC area ranks third among the percentage of metropolitan areas with the highest percentage of upper-income households (32%), behind Midland, Texas and the Bridgeport, Connecticut region. The rich get richer … and the powerful, too.

I think it is not helpful that the country is being flooded by low-income illegals. It's undercutting wages not just of entry level positions, but of skilled contractor / construction type jobs across the board.

According to the Pew Hispanic Trust, less than 4% of illegal aliens in the U.S. are employed in agriculture of all types. The vast majorities work in substantial jobs such as CONSTRUCTION, ROOFING, landscaping, and EVEN MASONRY and plumbing, where their low wages have driven many millions of Americans out of work.

I blame the Federal Reserve and the Keynesian philosophy that drives it. The middle class is wealthy enough to have some savings, but generally not wealthy enough to be heavily invested in anything but their own families. This means that Keynes-inspired inflation steals from the middle class and gives that money to the investor class. Quantitative Easing did this even more directly, by deliberately inflating stock market prices (helping investors) to stop deflation (which would have helped those with savings).

Of course minimum wage laws also contribute, by dividing the country into those with high-paying jobs, and those who can't find ANY job.

So do you mean it would be better if more low-income jobs were done by Americans? Or do you mean it would be better if Americans had to pay more to have those jobs done?

Tiffany Zhang It's true that if you flood the country with low wage illegals then consumers of services, as construction services, will pay less.

But the costs are HUGE. The erosion of the incomes of the lower and middle classes means greater inequality and greater entitlement and welfare costs, so ultimately much of the 'savings' of higher income consumers is lost to taxes. Further, in the US we are seeing the thirdworldification and bi-lingualification of the country. That's not necessarily a welcome addition.

Worst of all the demographic change tilting the country heavily toward the low income immigrants and their low income offspring will ... TURN THE COUNTRY SOCIALIST. So those 'savings' in service costs will ultimately be paid for in higher taxes for socialist redistribution and entitlements, and probably in direct socialist property confiscations.