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Where the Middle Class Is Shrinking

nytimes.com

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Re: Where the Middle Class Is Shrinking

#111

Post by chc »

dragonwriter wrote: post #16

The article makes the extremely common media error (which is also present in the source research, or at least the press release from Pew announcing it -- the article uses "class" pretty exclusively, the Pew release uses "class" in the headline and much of the body, but also uses "income tier" in some places) of conflating income (which is simply a measure of the amount of money received per year) with class (which is…

In common discourse in America, at least, "middle-class" doesn't really seem to mean either of these things. It generally seems to refer to people who are not recognizably in poverty, but are not recognizably wealthy either — think of the stereotypical '50s atomic family that you've seen on so many TV shows, which owns a home and a car and can reliably put food on the table, but is still strongly dependent on wages and can't afford a large amount of luxuries.

So when people talk about the decline of the middle class, I think they mean a decline in people who are not obviously poor or rich, and instead fall "in the middle."

Re: Where the Middle Class Is Shrinking

#112

Post by nugget »

qsymmachus wrote: post #61
sixtypoundhound wrote: post #55

Ugh - while I agree with the conclusion, the statistical definitions here don't have any connection with reality. $125,000 is "upper class", you say, regardless of location? Let's translate that into the real world, shall we? $125,000 Household Income.... Who makes it: - IT manager or Senior Dev with stay at home spouse - Mid-level Dev ($90K) married to a K-12 teacher ($40K) - Two junior software developers (co-habit…

> Sad to say, there are many areas of the country where living on $125,000 still definitely sucks. Only by truly decadent standards could an income of $125,000 be said to "definitely suck". $125k is 2.4x median income and puts you in the 97th percentile of all American workers.

I always found median income a little bit frustrating in these class and lifestyle discussions. Median income doesn't expose people who don't work because they receive passive income nor does it capture wealth very well. Let's say I am working 60 hours/week to bring in $125k and $4k/month of that goes to rent. My neighbor has $2 million in SPY yielding $40k/year and minimal overhead because his parents bought him a house free and clear (and, with no job, he has the free time to exercise, cook his own food, and enjoy a higher quality of life). These are extreme examples (although increasingly more common in SF, LA, and NYC) but demonstrate how median income can be misleading.

Re: Where the Middle Class Is Shrinking

#113

Post by g00gler »

vox_mollis wrote: post #56
g00gler wrote: post #44

Earlier quoted context omitted.

That's true, but what do you do for a living? I think it'd be significantly harder to find a job as a developer in the middle of nowhere, it's even hard to find an interesting job in the suburbs IME.

I'm a 60% developer / 40% small team lead. Do it all remotely with trips to California every two months or so. Plenty of positions are available for remote workers. From what I've seen, it's not the employers, but rather the employees. For some reason, the convenience and distractions of cities are lifestyle requirements, not employment requirements. Which is fine, but I take issue with the widespread delusion that l…

I guess that's true, I'm just a fancyite. Gotta have that sushi delivered to me, etc

Re: Where the Middle Class Is Shrinking

#114

Post by 6stringmerc »

tosseraccount wrote: post #42
6stringmerc wrote: post #23

A noteworthy companion piece would be this FiveThirtyEight look into the relationship between Unions, Wages, and the Middle Class: http://fivethirtyeight.com/features/americans-dont-miss-manu... One of the more interesting points I took away is that the Midwest, though facing issues, is one of the last holdouts of a large demographic that might be called Middle Class, often in close correlation with Union presence.

Polls show a tight race between Mr. Trump and Mrs. Clinton in the Midwest ... so we're likely to have focus on the middle income vote. We typically don't see the income inequality that we see on the coasts.

Thanks for adding the perspective - it wasn't something I was familiar with, re: Midwest and that kind of demographic. I was familiar with good wages in a lot of dominant industries (when jobs are available, etc). The region should be interesting to watch, as you note, regarding how the bloc is courted (and whether it works or not).

Re: Where the Middle Class Is Shrinking

#115

Post by drawkbox »

nxzero wrote: post #8

Anyone able to offer an explaination of why having a large middle class is viewed as positive? For example, say large population was happy, educated, healthy, etc. - why does it matter what the class distribution is?

I was always told the lower class or poor are there to scare the middle class into working and supporting the upper class.

The middle is the padding/margin that keeps the possibly of moving up and out of your class a seeming reality, but also keeps the divide from rich/poor from being too strong. If you just have rich/poor, the opportunities seem more dire, less opportunity and less mobility is possible and lots of bad things start to happen.

A society that tends to the middle is a more healthy one, one that tends solely to rich/poor needs leaves those middle people out of luck, that is what we have now.

This is also a consumer economy, the lower/middle spend over $1 or 100%+ of their incremental dollar earned, the rich only spend .05 or 5% of their incremental dollar. It is good to have consumers that can spend in a consumer economy, it helps all levels of class/wealth. Rich/poor do not spend enough to keep a consumer economy afloat that actually moves money the way it is supposed to move and you end up with stagnation and long drawn out recessions. In downturns, the poor have no money and the rich don't spend or invest in downturns enough, the middle always has to spend.

If you sell products it is also nicer to have middle class out there that can buy, not just upper class. The products that target each are fairly different and there are only so many rich consumers.

Re: Where the Middle Class Is Shrinking

#116

Post by nostrademons »

refurb wrote: post #106
astazangasta wrote: post #73

Earlier quoted context omitted.

Take this with a grain of salt. The definition of "middle income" is flexible. For example, in the Pew analysis "middle income" is defined as between $45,115-$135,346 in 2013-2014 dollars for the year 2000, but as between $41,641-$124,924 for the year 2014. Given this difference it's unsurprising the Pew analysis finds the upper class grew, but since the definition shifts we should be suspicious of the meaning of thi…

Why would it be unsurprising? The upper class income range went up , so it's actually even more surprising that of the 3% that went from the middle to the upper class they had a higher bar to reach.

It went down: $135K in 2000 => $124K in 2014.

Re: Where the Middle Class Is Shrinking

#117

Post by ArkyBeagle »

thrownaway2424 wrote: post #32
nugget wrote: post #18

I used to think that science fiction's popular predictions of a dominant, out of touch urban ruling class casually oppressing subsistence level, serf-like rural populations was just a dystopian fantasy. But the older I get and the more I think about the future and human nature the more I think that may be the way we are headed.

The joke is that the rural people are oppressing themselves. "Urban elites" have long advocated for policies that would benefit the rural poor but the white rural poor are dead set against any policy that would also benefit black people. http://www.nber.org/papers/w17234 and http://www.amazon.com/Whats-Matter-Kansas-Conservatives-Amer... for more on that.

That book is so totally "OMG, what's WRONG with those people???" Emphasis "those people."

While that's one interpretation, there's Long been conflict in the US on the rural-urban axis - see Andrew Jackson's vision versus Alexander Hamilton's vision

Race is only useful in this sort of thing as a predictor of rough economic class, and even then it's less than useful. IOW, I don't think it's specifically race.

A better resource is "American Nations: A History of the Eleven Rival Regional Cultures of North America" http://www.amazon.com/American-Nations-History-Regional-Cult...

Re: Where the Middle Class Is Shrinking

#118

Post by ArkyBeagle »

qsymmachus wrote: post #61
sixtypoundhound wrote: post #55

Ugh - while I agree with the conclusion, the statistical definitions here don't have any connection with reality. $125,000 is "upper class", you say, regardless of location? Let's translate that into the real world, shall we? $125,000 Household Income.... Who makes it: - IT manager or Senior Dev with stay at home spouse - Mid-level Dev ($90K) married to a K-12 teacher ($40K) - Two junior software developers (co-habit…

> Sad to say, there are many areas of the country where living on $125,000 still definitely sucks. Only by truly decadent standards could an income of $125,000 be said to "definitely suck". $125k is 2.4x median income and puts you in the 97th percentile of all American workers.

So $125k is much more likely in one of the big cities where cost of living is dominated by real estate.

Since we tax labor and we don't tax land, this raises the suck factor. $125k in Northern Alabama probably means a darn good living. In SanFran? Probably not.

Also, Dallas used to be the place where land was cheap(er) and jobs paid relatively well, but that ended after Enron.

Re: Where the Middle Class Is Shrinking

#119

Post by ArkyBeagle »

nostrademons wrote: post #116
refurb wrote: post #106

Earlier quoted context omitted.

Why would it be unsurprising? The upper class income range went up , so it's actually even more surprising that of the 3% that went from the middle to the upper class they had a higher bar to reach.

It went down: $135K in 2000 => $124K in 2014.

... which leads me to think there's a general growth-lacking/deflationary process at work. And this is due to bad monetary policy.

Re: Where the Middle Class Is Shrinking

#120

Post by dragonwriter »

astazangasta wrote: post #73
npalli wrote: post #63

I found the following graph from the same pew research pretty interesting. http://www.pewsocialtrends.org/files/2016/05/ST_2016.05.12_m... Essentially, the middle class shrank from 55% of the population in 2000 to 51% of the population in 2014. However, the upper class absorbed 3% (3/4th) of the shrinking middle class growing from 17% to 20% of the population, while the lower class absorbed only 1% (1/4th) of the shr…

Take this with a grain of salt. The definition of "middle income" is flexible. For example, in the Pew analysis "middle income" is defined as between $45,115-$135,346 in 2013-2014 dollars for the year 2000, but as between $41,641-$124,924 for the year 2014. Given this difference it's unsurprising the Pew analysis finds the upper class grew, but since the definition shifts we should be suspicious of the meaning of thi…

> The definition of "middle income" is flexible.

The definition used is consistent: an household income of 2/3 to double to the national median income.

The range shifts because the median income (even in inflation-adjusted terms dollars) shifts over time.

Aside from the complaints I've made about conflation of class and income elsewhere in this thread, the Pew definition is a reasonable and consistent way of defining a middle income tier over time, in a way which makes sense to talk about changes in size of that tier as an indicator of polarization of the income distribution, and which is a bit more intuitively understandable than some other distributional measures that relate to the same broad distributional concepts (e.g., the Gini coefficient of income.)

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