THE AMERICAN MIDDLE CLASS IS NO
LONGER THE WORLD’S RICHEST
Brief Introduction
This happens not only in America, said the author of this article. Mal de todos consuelo de tontos, decimos in Spanish. Since middle classes are getting poor allover the world, it means that the neoliberal system is obsolete. The most stupid thing would be to blame Russia and China for the collapse of our empire. Its is our fault, does it; and we know who caused.. big bankers, big corporations and the crooks in Wall Street.
This is not going to be solved with our military might, not even recycling the rich inside the government with phony elections; we have to change the whole political and economic system from the bottom up. If needed a people revolution to such endeavor.. bienvenida, welcome!!. Let’s start by opening a third choice in the next election: we need the People United Front to rebuilt America. We can do it faster than the Russian after Yelsin and faster than China after Den Siao Ping. Hugo Adan. April 23, 2014.
The American middle class, long the most affluent in the
world, has lost that honor, and many Americans are dissatisfied with the state
of the country. “Things are pretty flat,” said Kathy Washburn of Mount Vernon,
Iowa. “You have mostly lower level and high and not a lot in between.” Nicole Bengiveno/The New York Times
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.
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.
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.
In European countries hit hardest by
recent financial crises, such as Greece and Portugal, incomes have of course
fallen sharply in recent years.
The income data were compiled by LIS, a
group that maintains the Luxembourg Income Study Database. The numbers were
analyzed by researchers at LIS and by The Upshot, a New York Times website
covering policy and politics, and reviewed by outside academic economists.
The struggles of the poor in the
United States are even starker 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.
LIS counts after-tax cash income
from salaries, interest and stock dividends, among other sources, as well as
direct government benefits such as tax credits.
See figure by opening
the website above: The United States’
once-strong lead in middle class incomes is shrinking. Median per capita income after taxes
The findings are striking because
the most commonly cited economic statistics — such as per capita gross domestic product — continue to
show that the United States has maintained its lead as the world’s richest
large country. But those numbers are averages, which do not capture the
distribution of income. With a big share of recent income gains in this country
flowing to a relatively small slice of high-earning households, most Americans
are not keeping pace with their counterparts around the world.
“The idea
that the median American has so much more income than the middle class in all
other parts of the world is not true these days,” said Lawrence
Katz, a Harvard economist who is not associated with LIS. “In 1960,
we were massively richer than anyone else. In 1980, we were richer. In the
1990s, we were still richer.”
That is no longer the case, Professor Katz added.
Median per capita income was $18,700
in the United States in 2010 (which translates to about $75,000 for a family of
four after taxes), up 20 percent since 1980 but virtually unchanged since 2000,
after adjusting for inflation. The same measure, by comparison, rose about 20
percent in Britain between 2000 and 2010 and 14 percent in the Netherlands.
Median income also rose 20 percent in Canada between 2000 and 2010, to the
equivalent of $18,700.
The most recent year in the LIS
analysis is 2010. But other income surveys, conducted by government agencies,
suggest that since 2010 pay in Canada has risen faster than pay in the United
States and is now most likely higher. Pay in several European countries has
also risen faster since 2010 than it has in the United States.
Three broad factors appear to be
driving much of the weak income performance in the United States. First, educational attainment in the United States has
risen far more slowly than in much of the industrialized world over the last
three decades, making it harder for the American economy to maintain its share
of highly skilled, well-paying jobs.
Americans between the ages of 55 and
65 have literacy, numeracy and technology skills that are above average
relative to 55- to 65-year-olds in rest of the industrialized world, according
to a recent study by the Organization for Economic
Cooperation and Development, an international group. Younger Americans, though,
are not keeping pace: Those between 16 and 24 rank near the bottom among rich
countries, well behind their counterparts in Canada, Australia, Japan and
Scandinavia and close to those in Italy and Spain.
A second factor is that companies in
the United States economy distribute a smaller share of their bounty to the
middle class and poor than similar companies elsewhere. Top executives make
substantially more money in the United States than in other wealthy countries.
The minimum wage is lower. Labor unions are weaker.
And because the total bounty
produced by the American economy has not been growing substantially faster here
in recent decades than in Canada or Western Europe, most American workers are
left receiving meager raises.
American Incomes Are Losing Their Edge, Except at the Top
See figure: Inflation-adjusted,
after-tax income over time, in the website above
Finally, governments in Canada and
Western Europe take more aggressive steps to raise the take-home pay of low-
and middle-income households by redistributing income.
Janet Gornick, the director of LIS, noted that
inequality in so-called market incomes — which does not count taxes or
government benefits — “is high but not off the charts in the United States.”
Yet the American rich pay lower taxes than the rich in many other places, and
the United States does not redistribute as much income to the poor as other
countries do. As a result, inequality in disposable income is sharply higher in
the United States than elsewhere.
Whatever the causes, the stagnation of income has left many
Americans dissatisfied with the state of the country. Only
about 30 percent of people believe the country is headed in the right
direction, polls show.
“Things are pretty flat,” said
Kathy Washburn, 59, of Mount Vernon, Iowa, who earns $33,000 at an Ace Hardware
store, where she has worked for 23 years. “You have mostly lower level and high
and not a lot in between. People need to start in between to work their way
up.”
[Mal de
todos consuelo de tontos, decimos en español]
Continue reading the main story http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?_r=0
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