Last year, the Pew Research center reported that the income gap in the United States between
the middle and upper class was the largest on record. The wealth owned by just the top
“zero point-one percent” was equivalent to the wealth of the bottom 90 percent. Many
economic analysts and politicians have lamented the decline of the middle class, and petition
for its growth. So why does the middle class matter?
Well, to begin with, let’s define the middle class. The term is so nebulous that it seems
to apply to almost everyone. The New York Times and the American Enterprise Institute
use the income bracket between 35 thousand to 100 thousand dollars a year. But a 2012
Pew study reports that even people below and above these boundaries consider themselves
part of the middle class - depending on where they live and how many dependents they have.
According to the US Census Bureau’s most recent data, the nation’s median annual
income is about 50 thousand dollars.
Because there are so many that fall into the middle class category, they wield significant
political and economic power. Politicians often make promises to the middle class during
election campaigns. In the President’s 2015 State of the Union address, he made sweeping
commitments to the middle class, pledging tax cuts and more social programs. He vowed
to close tax code loopholes for corporations and the “super rich”.
The middle class has significant buying power throughout America. The financial security
of towns and cities, depends on local businesses, which in turn, depends primarily on middle
class patronage. Restaurants, movie theatres, shopping malls - these all depend on the customers
with disposable income.
And yet, the middle class is shrinking. It’s been in decline since the 70s. That was when
the Post-World War II industries of Europe and Asia caught back up with the United States.
Companies began outsourcing labor to cheaper foreign nations. American factories, which
once gave high-paying jobs to workers with just a high-school education, are all but
extinct. The American Automobile industry, which employed hundreds of thousands of Americans
fifty years ago, was near bankruptcy in the late 2000s. Pew reports that the aggregate
wealth claimed by the middle class in 2010 was 45%, while in 1970, it was 62%.
The middle class is also a critically important ladder of social mobility. The Pew Charitable
Trust, a public policy organization, reports that without the middle class, the American
Dream may be unattainable. Perhaps that’s why President Obama has been fighting for
social programs that protect the middle and lower classes - programs like Medicare, and
Free Community College. However, with much of the American political system composed
of, and influenced by, the wealthy elite - the gap between rich and poor is likely to increase
in the coming years.
Want to know just how rich the top 1% really are? Check out this awesome visualization
from our friends at AJ+. Thanks for watching TestTube, make sure to subscribe by clicking
the box below, or the link in the description!