The decline of the American middle class continues

Middle Class
The American middle class is still dying. While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades. After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

Not surprisingly, the poor in the United States are even worse than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true.

That change seems to have been caused by a variety of factors, with education chief among them. Americans between 16 and 24 years old rank behind the same demographic in Canada, Australia, Japan, and Scandinavia in literacy, math, and technology performance. Young Americans still rank alongside citizens in Italy and Spain, although elderly US nationals lead the world in the same categories.

Another, perhaps more substantial factor, is how companies compensate American employees. CEOs in the US make far more than those in Europe, and the poor earn far less. The minimum wage in America is lower than in other developed countries and labor unions have been weakened in recent decades, unlike on the other side of the Atlantic Ocean.

Median income in the US, after taxes, is approximately $74,000 for a family of four. Income levels rose by about 20-percent between 1980 and 2000 but have remained largely unchanged since then. Canadians, on the other hand, enjoyed an income increase of 20-percent between 2000 and 2010 alone.

Published by Stout Law Firm

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