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n2doc

(47,953 posts)
Tue Apr 22, 2014, 09:20 AM Apr 2014

The American Middle Class Is No Longer the World’s Richest

The American middle class, long the most affluent in the world, has lost that distinction.

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.

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.

The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.

Although economic growth in the United States continues to be as strong as in many other countries, or stronger, a small percentage of American households is fully benefiting from it. Median income in Canada pulled into a tie with median United States income in 2010 and has most likely surpassed it since then. Median incomes in Western European countries still trail those in the United States, but the gap in several — including Britain, the Netherlands and Sweden — is much smaller than it was a decade ago.

more

http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?smid=tw-upshotnyt&_r=3

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abelenkpe

(9,933 posts)
2. Canada, Britain and New Zealand
Tue Apr 22, 2014, 09:28 AM
Apr 2014

Subsidize what used to be a flourishing industry with thousands of upper middle class jobs here in the US so of course those jobs have left here for countries interested in having a strong middle class. Maybe the US should do something about off shoring? But it won't. Why change something that enriches the wealthiest US citizens at the expense of our working class?

Romulox

(25,960 posts)
4. This is why it was *so crucial* to bail out the banks first, and to the exclusion of regular people.
Tue Apr 22, 2014, 09:42 AM
Apr 2014

This was planned.

merrily

(45,251 posts)
8. Yep. Remember all those stories then about "liar loans" and
Tue Apr 22, 2014, 10:37 AM
Apr 2014

people running out on their mortgage obligations?

Good times.

KurtNYC

(14,549 posts)
5. Part of this is because of the way we buy real estate in the USA
Tue Apr 22, 2014, 09:49 AM
Apr 2014

the 30 year fixed rate mortgage here produces higher default rates than the loans in europe which are backed by government bonds or guarantees and are typically variable rate. We have one bubble after another while Canada has stricter laws on banks and reaps the benefits.

Another recent factor is the newly legal ability of US financial institutions to bet against their own customers. Not much incentive in that equation to "do right by the customer." In many cases it may more profitable for the bank to put someone in a house they will default on than to ride out the 360 monthly payments. IRAs, mutual funds, etc are all areas where banks can now bet against you. So we have moved from something analogous to a casino, to a casino where the HOUSE can break you all the faster by sitting down at the card table to bet against you while looking at, even controlling what card comes out of the deck next.

erpowers

(9,350 posts)
15. Can You Provide Information
Wed Apr 23, 2014, 08:32 AM
Apr 2014

I am not trying to contradict you; I just want to read up on this myself. I want to see what the banks can do and what rules are being used.

bvar22

(39,909 posts)
9. The Economic and Trade Policies of FDR (New Deal) HST, and LBJ (Great Society)...
Tue Apr 22, 2014, 10:58 AM
Apr 2014

...built the Largest, Wealthiest, and Most Upwardly Mobile Working Class the World had ever seen.

Low Taxes on the RICH (39.5% is LOW), Free Trade, "Free Markets", de-regulation, and privatization is what killed it.
We KNOW what works.
We simply lack the Political Will and the Political Leadership to do it.... for now.





nxylas

(6,440 posts)
13. There's an American middle class?
Tue Apr 22, 2014, 12:21 PM
Apr 2014

I thought that had gone the way of fluorescent socks and "Frankie Says" t-shirts.

 

Ron Obvious

(6,261 posts)
14. I think that's been true for a while...
Tue Apr 22, 2014, 12:22 PM
Apr 2014

Oh maybe not if you look at numbers like GDP per capita (which measures ALL economic activity, even bad and harmful ones, and says nothing about how the wealth is distributed), but ertainly for as long as I've lived in America (34 years) the much-vaunted prosperity of the American middle class has always seemed fragile and phony to me.

It's been financed by debt (when I was growing up, buying anything except a house on credit was seen as deeply shameful), living beyond one's means, and by working excessively long hours. Because of the lack of a real safety net virtually anyone, including seemingly very prosperous people, is just a few paycheques away from penury.

All those decades of unregulated capitalism, trickle-down, privatisation and anti-union, anti-government, and anti-tax sentiments have resulted in hollowed out middle class, a downtrodden working class, and a frightened upper-middle class.

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