Middle Class shrinkage: Cold water effect or real problem?

[thaiboxerken]

I keep hearing claims and reading articles that claim that the middle class is shrinking and diminishing, and I've heard this same line of thought since I can remember ever even caring about jobs.. so about 20 years or so. However, I have to wonder why, if this is really happening, that it seems so easy to find a middle class job? Why is the middle class still around? Is this claim about the middle class dying just fear mongering? Is the middle class shrinkage argument just a ploy to get companies to pay low-skill workers more money?

What are the real facts? It seems like everything I read on the internet about it is biased one way or another and there are very little, if any, scientific studies about this.

[Darth Rotor]

Originally Posted by thaiboxerken

I keep hearing claims and reading articles that claim that the middle class is shrinking and diminishing, and I've heard this same line of thought since I can remember ever even caring about jobs.. so about 20 years or so. However, I have to wonder why, if this is really happening, that it seems so easy to find a middle class job? Why is the middle class still around? Is this claim about the middle class dying just fear mongering? Is the middle class shrinkage argument just a ploy to get companies to pay low-skill workers more money?

What are the real facts? It seems like everything I read on the internet about it is biased one way or another and there are very little, if any, scientific studies about this.

Like comments about poverty, one has to first bound the limits of the term "middle class" and then try to measure its growth or contraction by economic data. Given the very loose definitions so often used, I share your confusion with the reports: what are they really talking about?

DR

[thaiboxerken]

I don't know, it's like people want me to believe that our country has two categories, rich and poor. However, most people I know and interact with are neither.

[Darat]

In the UK we say the opposite - our working class is shrinking and our middle class is expanding.

[thaiboxerken]

I think in the USA the working class IS the middle class. At least, that's what the politicians say.

[MelBrooksfan]

I don't think even they really know outside of it sounding good if you claim to be for the poor and middle classes.

I read an article recently that detailed something to the effect of the current average two-income household makes less than the average one-income household did in the 70s. I really wanted them to show their work on that one.

[WildCat]

Originally Posted by MelBrooksfan

I read an article recently that detailed something to the effect of the current average two-income household makes less than the average one-income household did in the 70s. I really wanted them to show their work on that one.

Oh yeah, that great 1970's economy, who's pining for that? Double-digit inflation, high unemployment, 17% mortgage interest rates... ah, the good old days!

[mr rosewater]

Originally Posted by WildCat

Oh yeah, that great 1970's economy, who's pining for that? Double-digit inflation, high unemployment, 17% mortgage interest rates... ah, the good old days!

Queuing for fuel, odd and even tags, red flag-green flag. I miss thoughs days

[Francesca R]

Originally Posted by thaiboxerken

I think in the USA the working class IS the middle class. At least, that's what the politicians say.

Is this the same psychology that causes the smallest coffee you can get to be labelled "tall" or "big" (followed by "bigger", "massive", "f-off huge")?

[Corsair 115]

Originally Posted by WildCat

Oh yeah, that great 1970's economy, who's pining for that? Double-digit inflation, high unemployment, 17% mortgage interest rates... ah, the good old days!

If I may nitpick for a moment, I believe both the inflation rate and prime interest rates peaked in 1981. Can't recall how much they were prior to that, especially in the 1970s timeframe you mention.

I also recall gold being about $800 U.S. an ounce back in 1981... to which I can only say, those poor saps who bought it at that price back then sure lost a ton of dough on the deal...

[NeilC]

So what classes are you supposed to have in the USA? Do you have an upper class and if so what characteristics do they have?

I even struggle to work out what "working class" in the UK s supposed to mean anymore. Do they have to work in mine or does any manual work count? I know plasterers and decorators who make more than mortgage advisors - are any of those working class or middle class? What about call centre staff? What about their managers? It all seems a bit confusing and pointless.

[Dr Adequate]

[Darth Rotor]

Originally Posted by Splossy

So what classes are you supposed to have in the USA? Do you have an upper class and if so what characteristics do they have?

Well, there is this Lamaze class men get suckered into attending. I didin't mind the first one, but I had to go through it a second time for some silly (state of CA and my wife) reason.

DR

[BPSCG]

David Hackett Fischer's wonderful book, Historians' Fallacies, discussed:

Quote:

...that omnipresent cliche of modern European historiography, the "rise of the middle class." This group has been found rising most remarkably in every period from the twelfth century to the twentieth. It has been used to explain the Renaissance and the Reformation, absolutism and liberalism, monarchy and republicanism, conservatism and radicalism, nationalism and internationalism, fascism and communism, the commercial revoultion, the managerial revolution, the agricultural revolution, the industrial revolution, the Puritan revolution, the American Revolution, the French Revolution, etc., etc. If the middle class had in fact been rising as powerfully as this, it should presently be somewhere in the disciplinary jurisdiction of astronomers, who alone could measure its continuous ascension with their powerful instruments.

Anyone claiming to be a skeptic, whether interested in history or not, should read Fischer's book. I first learned many of the terms we throw around here so easily - ad hominem, post hoc, ergo propter hoc - from this book, when I was in college.

[Jaggy Bunnet]

When poverty is defined as a family of two adults and two kids who, after housing costs (and presumably therefore after tax/NI as well) have a weekly income of £301, it is hardly surprising the middle class is shrinking.

http://news.bbc.co.uk/1/hi/scotland/6681281.stm

I am also a bit confused as to how this definition ties in to the claim that the level is set at 60% of average income as I thought this figure was somewhere around £24k of gross income. How you get from that figure to £15k of income after housing costs is difficult to understand.

[Beerina]

Originally Posted by thaiboxerken

I think in the USA the working class IS the middle class. At least, that's what the politicians say.

Yeah, there is no distinction of this in the US. You're either poor, as defined by a certain income amount (varied depending on whether you have a family to support, then it's "family income total"), or you're rich (not sure if it's a certain income amount and/or assets.) If neither, you're middle class, which varies wildly, from single people probably earning in the high teens or low 20's per year up through several hundred thousand a year.

[Beerina]

Originally Posted by Jaggy Bunnet

...this definition ties in to the claim that the level is set at 60% of average income

Defining the middle/poor boundary by a fraction of the average income?

What a cheat. What a rhetorical, populist political cheat.

Quality of life, as defined, say, by how much people can buy, could skyrocket until the fifty third coming of Christ, and you'd still have a bunch of "poor" people, even if they could afford their own space stations.

But for rhetorical purposes, the politicians must never, never define poor by how much calories they intake, nor how many color TVs they can afford, nor, in the US anyway, how many cars in the driveway.

[Beerina]

Originally Posted by WildCat

Oh yeah, that great 1970's economy, who's pining for that? Double-digit inflation, high unemployment, 17% mortgage interest rates... ah, the good old days!

I remember watching the Reagan/Mondale debate in 1984.

Reagan: You know, in 1976 [Carter/Ford contest], the Democrats created something they called the "Misery Index". It was the sum of inflation and interest rates. It stood at 12%. Four years later [Carter/Reagan contest, after 4 years of Carter] they didn't mention it because it had risen to 18%. And you know what? They won't mention it again this election, because it is down to 8%.

It was at exactly that moment that you knew that Reagan wasn't just going to win, but was going to absolutely destroy Mondale.

[Kerberos]

Originally Posted by Beerina

Defining the middle/poor boundary by a fraction of the average income?

What a cheat. What a rhetorical, populist political cheat.

No, it's simply common sense. If you prefer an absolute measure of poverty you should feel free to establish a baseline of for example conditions in hunter gatherer societies 200.000 years ago and declare everyone to be stinking rich, but it would be a rather pointless declaration. You could of cause also set the baseline as something that makes sense in a modern context, but then you'd really still be setting a relative standard. Unless of cause you can give some reasonable explanation for why exactly the conditions of the west in 2007 should be considered the universal baseline for poverty. I’m looking forward to you explanation for that.

[Ziggurat]

Originally Posted by Kerberos

No, it's simply common sense.

No, it's not. It sets up a metric where poverty [i]rates[i] can decrease if people make less money. That's not common sense, that's perverse.

[Jaggy Bunnet]

Originally Posted by Kerberos

No, it's simply common sense. If you prefer an absolute measure of poverty you should feel free to establish a baseline of for example conditions in hunter gatherer societies 200.000 years ago and declare everyone to be stinking rich, but it would be a rather pointless declaration. You could of cause also set the baseline as something that makes sense in a modern context, but then you'd really still be setting a relative standard. Unless of cause you can give some reasonable explanation for why exactly the conditions of the west in 2007 should be considered the universal baseline for poverty. I’m looking forward to you explanation for that.

Except that what you end up with is resources being targetted at moving people from 59% of median earnings to 61% because that is "reducing poverty" and you can achieve a much bigger reduction in poverty rates by doing that than by devoting the same resources to helping those who are scraping an existence much lower down the earnings scale.

And of course such a calculation assumes that people stop being poor if all the rich people emigrate - even if they are in exactly the same financial position.

[thaiboxerken]

"it's just common sense." Why is that phrase usually supportive of poor logic or bad facts?

[Kerberos]

Originally Posted by Jaggy Bunnet

Except that what you end up with is resources being targetted at moving people from 59% of median earnings to 61% because that is "reducing poverty" and you can achieve a much bigger reduction in poverty rates by doing that than by devoting the same resources to helping those who are scraping an existence much lower down the earnings scale.

Accepting that the only sensible criterion for poverty is relative does not mean that pushing people over whatever arbitrary line you set for poverty should be the main objective. In fact the exact same straw man could be levelled against somebody who championed an absolute standard for poverty. Why should we try to push people over whatever arbitrary line you might declare to be the absolute standard for poverty?

Originally Posted by Jaggy Bunnet

And of course such a calculation assumes that people stop being poor if all the rich people emigrate - even if they are in exactly the same financial position.

True, and that does seem somewhat bizarre, but as I pointed out an absolute standard of poverty entails it's own absurdities. Would you care to take a shot at defining such an absolute standard an explaining why that exact standard is the everlasting universally correct one?

[Kerberos]

Originally Posted by thaiboxerken

"it's just common sense." Why is that phrase usually supportive of poor logic or bad facts?

let's hear some good logic and good facts then. I'm sure you can provide some. What is the universal and absolute standard for poverty and why is it whatever it is?

[Kerberos]

Originally Posted by Ziggurat

No, it's not. It sets up a metric where poverty [i]rates[i] can decrease if people make less money. That's not common sense, that's perverse.

It should be obvious, but apparently it needs to be pointed out to some people: Reducing poverty rates should obviously never be the sole purpose of a government. And of cause the question I've asked the others applies to you too. What is the absolute criterion for poverty and why is it where it is? I'm just dying to hear a good answer to that one.

[Jaggy Bunnet]

Originally Posted by Kerberos

Accepting that the only sensible criterion for poverty is relative does not mean that pushing people over whatever arbitrary line you set for poverty should be the main objective.

Doesn't mean it should be, however experience suggests that it is.

Quote:

In fact the exact same straw man could be levelled against somebody who championed an absolute standard for poverty. Why should we try to push people over whatever arbitrary line you might declare to be the absolute standard for poverty?

If the absolute standard has some meaning (ability to feed, clothe, shelter and educate yourself and family) for example then pushing people over that line makes sense and ensures that funding is focussed on those who have a genuine need for something that society decides is an essential.

Quote:

True, and that does seem somewhat bizarre, but as I pointed out an absolute standard of poverty entails it's own absurdities. Would you care to take a shot at defining such an absolute standard an explaining why that exact standard is the everlasting universally correct one?

Why do you assume that a non relative standard will not change over time? Why does it have to be everlasting?

For example in the 10 seconds of thought example above, "educate" is likely to mean something massively different today than it did 100 years ago (school to age of 18 instead of 12).

[Kerberos]

Originally Posted by Jaggy Bunnet

Doesn't mean it should be, however experience suggests that it is.



If the absolute standard has some meaning (ability to feed, clothe, shelter and educate yourself and family) for example then pushing people over that line makes sense and ensures that funding is focussed on those who have a genuine need for something that society decides is an essential.



Why do you assume that a non relative standard will not change over time? Why does it have to be everlasting?

For example in the 10 seconds of thought example above, "educate" is likely to mean something massively different today than it did 100 years ago (school to age of 18 instead of 12).

Because then it is not an absolute standard, it's a relative standard then. It's not a relative standard define as a % of average income, but it's relative none the less. I really don't see any difference between you absolute standard and my relative one.

[thaiboxerken]

Originally Posted by Kerberos

What is the universal and absolute standard for poverty and why is it whatever it is?

Inability to afford food and shelter.

[Kerberos]

Originally Posted by thaiboxerken

Inability to afford food and shelter.

Ok, so being able to afford cave and a basic diet, but dying from pneumonia or appendicitis because you can't afford a doctor is not poor. Thanks for sharing your opinion, but I don't think your definition is likely to become the standard one anytime soon. At least not in the west.

[thaiboxerken]

Originally Posted by Kerberos

I don't think your definition is likely to become the standard one anytime soon. At least not in the west.

Think you can? Perhaps something more concrete than your previous attempt and can be explained in one or two sentences.

[firecoins]

I thought poor people were the ones that lived on the wrong side of the train tracks? I never knew which side was the wrong one but they are the ones on that side. Its a very precise fact. It should clear everything right up.

[steverino]

Originally Posted by thaiboxerken

I don't know, it's like people want me to believe that our country has two categories, rich and poor. However, most people I know and interact with are neither.

This is a touchy subject for me. I was middle class, making about $40,000-$60,000 a year with photography, plus a home owner.

Because of the digital age, (cheap high quality cameras, etc.) and, yes, my own business short-comings, I am at ten bucks an hour and renting an apartment. Other photographers I know are in the same boat. My friends on the Chicago Tribune may be working at Home Depot within two years.

Some of the low unemployment statistics consider realtors as employed people. However, many, or most, make $15,000 or less annually on commissions. Plus, like travel agents, people are selling their own homes through "FSBO" type agencies charging low flat fees.

Many "working class" people who made $16-$20 painting, hanging drywall, and such, are making $8 an hour now, due, in part, to being underbid by illegal workers.

Many middle-class families are surviving on refinancing their inflated-valued houses, rather than on their job incomes. And they are expected to do more work, spend more hours on the job, and are losing health benefits.

Some here might think I am some kind of capitalist pig as I stick up for Limbaugh and Cheney on these threads. The reality is that I am disillusioned by America's economy, and my own. There seem to be the "haves" and "have-nots." I am very fortunate to have parents to pay my phone bill and dentist now and then.

What worries me is when I chat with someone doing one of those jobs that supposedly "Americans don't want to do," and I learn that person is educated, articulate, and used to be middle class, like me.

[Kerberos]

Originally Posted by thaiboxerken

Think you can? Perhaps something more concrete than your previous attempt and can be explained in one or two sentences.

I notice you didn't answer my question. At least I don't think you did. It's a bit hard to tell since your reply doesn't make any sense.

[steverino]

Originally Posted by Kerberos

I notice you didn't answer my question. At least I don't think you did. It's a bit hard to tell since your reply doesn't make any sense.

If you are having trouble grappling with- "Who exactly is struggling economically, how is this all defined, and where is that line drawn?" - Then you are probably in pretty good shape, economically...for now.

[Ziggurat]

Originally Posted by Kerberos

It should be obvious, but apparently it needs to be pointed out to some people: Reducing poverty rates should obviously never be the sole purpose of a government.

I never claimed otherwise. But if you set up a metric which can display an "improvement" even in cases where things get obviously worse for everyone, then the metric is just screwed up. You aren't measuring poverty, but only disparity, and the two aren't the same. Whether or not reducing poverty is the sole purpose of government, it's still going to be something government tries to do, regardless of whether or not it should, because that's popular. So don't use a bad metric, or you can get bad policy which exploits the flaws of the metric to produce "progress" which is actually nothing of the sort.

Quote:

And of cause the question I've asked the others applies to you too. What is the absolute criterion for poverty and why is it where it is? I'm just dying to hear a good answer to that one.

EVERY metric is arbitrary to some degree. Hell, yours is just as arbitrary (why use 60% of median income, and not 55%?) as any absolute criteria. But a criteria which uses some sort of absolute scale (such as, for example, calculating the cost of food needed to survive and multiplying by some fixed factor) doesn't have the fatal flaw that your relative metric has: it cannot fall under conditions in which those under the poverty line are all getting worse off. It can ONLY drop if those who are moving above the poverty line really are experiencing an improvement.

[Ziggurat]

Originally Posted by Kerberos

Ok, so being able to afford cave and a basic diet, but dying from pneumonia or appendicitis because you can't afford a doctor is not poor.

In the US, what you describe is covered under emergency care for life-threatening conditions, and hospitals MUST provide such emergency care (plus baby deliveries) to EVERYONE who requires it, regardless of their ability to pay.

[Beerina]

Originally Posted by Kerberos

No, it's simply common sense. If you prefer an absolute measure of poverty you should feel free to establish a baseline of for example conditions in hunter gatherer societies 200.000 years ago and declare everyone to be stinking rich, but it would be a rather pointless declaration. You could of cause also set the baseline as something that makes sense in a modern context, but then you'd really still be setting a relative standard. Unless of cause you can give some reasonable explanation for why exactly the conditions of the west in 2007 should be considered the universal baseline for poverty. I’m looking forward to you explanation for that.

Actually, using the same standard for a caveman society, a pre-industrial one, an industrial one, "our modern one", and a "modern communist one" is all perfectly fine, if your goal is actual science to see how well each does in increasing the quality of life for people (assuming you have no problem experimenting on unwilling victims, which, for some odd reason, we consider highly unethical in every other aspect of society.)

If you move the goalposts like this, how in god's name do you know if your society is doing any better year after year?

It's a fraudulent metric designed to buttress the scientifically pointless, but rhetorically powerful idea of OH MY GOD THE DISCREPANCY BETWEEN RICH AND POOR IS WIDENING!

This is a pointless and fraudulent concept because it has nothing to do with average quality of life. Indeed, the vast majority of people alive would have no problem having the rich multiply their worth by 100 if it doubled their standard of life today. It is part of the politics of anger and class warfare, and has nothing to do with real economic studies of society.

[firecoins]

I measure the size of the middleclass from the base on my penis. This ios how I know the cold water effect is going on.

[Roswell-Perseis]

There are five socio-economic classes used in sociology. Try this link from my soc. class. This is designed to give people an idea, but I would not use it as more than a jumping off point. I would like to add that this crisis of the middle class consists of three major events that distort the picture: 1. an increase of knowledge of the class-based system and discrimination of minority groups (this has been building for years, but I think people thought we were further along than the reality has shown us).
2. The change of the manufacturing economy to a diverse economy. I know people want to call this the technological revolution, but I'm not sure it will take the place of manufacturing in terms of jobs and wages. I think we are headed for a very diverse economy that has less security per job or industry, but hopefully will have better security in the over all economy.
3. Americans are addicted to consumerism and have put themselves in an unstable position. The use of credit cards and loans have put Americans in a untenable situation.

I do believe the middle class is shrinking and that we are in a time of change. However, that no one seems willing (in the media) to talk about the issues surrounding this and that is a sad state of affairs.

(http://www.nytimes.com/pages/national/class/)

[steverino]

Originally Posted by Roswell-Perseis

I do believe the middle class is shrinking and that we are in a time of change. However, that no one seems willing (in the media) to talk about the issues surrounding this and that is a sad state of affairs.

I could open the general link, but not the story.

Anyway, Obama's website used to mention "strengthening unions and retraining under-employed workers for middle class jobs." That seems to have dropped from his updated website.

Hillary mentions it here, even though it is so transparent and fake that she wants to "continue Bill's work" on the middle class issue, as if Bush single handedly unraveled the middle class in 6 years after Hillary's husband had it humming right along.

http://www.washingtonpost.com/wp-dyn...031100065.html

In a speech to a Democratic Party fundraising dinner, Clinton echoed economic themes from her husband's first presidential campaign in 1992. Then, Bill Clinton talked about the forgotten middle class. Under Bush, the New York senator said, middle class Americans have been ignored.

Then there is Edwards and his "Two Americas" theme. It's cute, but once I almost lost my house to a slip-and-fall lawyer. Their whole M.O. is fear-based and threat-based.

I just don't think government can do a whole lot. Look at Detroit. People want Toyota's, not Dodge's. Michigan's senator, Carl Levin, seems to care about the little guy, but what can he do?

Ma & Pa businesses can't compete with Walmart, China, etc. I suppose government can offer assistance to community college training, or maybe low interest loans for people wanting to start up a small business.