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Is the “Middle Class” disappearing in America? (1 Viewer)

george kaplan

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While, as many have pointed out, the size of the middle class, the nature of the middle class, and the percent of people in poverty are 3 different (though related) topics, the following history might be of interest.

This comes from U.S. Census Bureau data:

At the tail end of the 1950's, 22.4% of Americans lived in poverty (including 55.1% of African-Americans). This high poverty rate drove LBJ's war on poverty, and by the end of his administration, the poverty rate was down to 12.1%, and it stayed around there through the end of the Carter administration when it was 11.7% (Naturally, there's always a little random variation from year to year). During the Reagan years, it jumped back as high as 15.2%, and when Clinton took office it was at 15.1%. When Clinton left office it was down to 11.3%. It was at 12.6% in 2005, on a slow, but upward trend.

It's never, since the war on poverty, been anywhere near the levels pre- war on poverty, but it does flucuate, and does tend to go up or down during certain administrations, though I will do no more than present these historical facts, since speculating as to why would be talking politics.

Again, however, this isn't really the issue of the middle class, since many people above the poverty level are still dirt poor, and the quality of the middle class (e.g., needing 2 incomes) is less related to poverty than the size of the middle class is.
 

MarkHastings

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Ok, I've heard people mention poverty a few times and I wonder what people are equating between poor and poverty. I know when I was referring to poor people, I wasn't exactly talking about the poverty stricken people, I'm talking about the ones that just don't have enough money to really live by.

...or are they one in the same? Is there something between lower class and poverty? I always assumed poor was inbetween.
 

mylan

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"no offense to mylan" None taken, Mark. My wife and I have no children, we've tried most everything, except invetro (sp?) fertilization which runs into the tens of thousands per pop and is not guaranteed. We decided that we did not want to be in the hole, say 20 grand and not have anything to show for it, or be 20 grand (or more) and have a new baby.
I do not know where we fall as far as middle class but we do make six figures and have skilled professions, we would love nothing more than to have a child so I am not speaking from experience here (why I felt the need to clarify things, I do not know).
I think most people procreate because it is human nature, not because they, like you and others here, made a decision, to be wealthy and alone. The problem stems from the repeat pregnancies that occur from lack of planning or just pure ignorance and the fact that those people are stuck in a never-ending cycle of bills and dead end jobs and child care issues. Most young couples get married in their twenties and want to start families because if they wait their chances of conception go way down, this is what happened to us, also there is a saying, if you wait till you can afford kids, you'll never have them, it is just most people sacrifice something when they do have them, less nights out dining or movies, or fewer vacations,and most families do well with this formula (ok, rant over, you can come out now!).
A.F.A the original question about the middle class shrinking, I prefer not to read surveys as they tend to be swayed one way or the other politically but anyone can see that wages are not keeping up with costs, on everything and by listening to real people telling real stories about how hard it can be to makes ends meet, even those with good incomes. My raises became less over the past two years due to my approaching top pay for my job so if inflation goes up 4% in two years and my pay only 2%, as an example, then I am now making less than I was two years ago, meanwhile, the cost of housing, energy, groceries, heathcare is exceeding almost all the working population except for the very wealthy. We are literally taking two steps back for every step forward as a nation and we want to continue our standard of living, again human nature, so we fall further and further behind.
I could go on and on, please do not think i'm pissed at anybody, this is one of the best debates we've had here in awhile, we do have our differences of opinion, don't we?
htf_images_smilies_chatter.gif
 

MarkHastings

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I totally agree with this...I understand people need to make sacrifices, but I hate it when I listen to the endless bitching about couples not being able to afford stuff after they've put themselves into this situation. Like Chris said, I think it's the 'victim' mentality that goes along with the bitching that rubs me the wrong way.
 

Eric_L

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I'm not familiar with any tax increase or government programs which has created prosperity (or even mediocrity) for any substantial number of people. (With the exclusion of graft, kickbacks, nepotism and other unethical practices) Please explain how you perceive the mechanics of removing money from an economy to create propserity for the participants of that economy?
 

JoeyR

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Mark, I really disagree with your poor comment on the previous page......

My father lived in homes that had holes in the floor big enough to fall through, some of the houses he lived in they had dirt for floors, I could go deeper and tell you things that would make you cry but I dont really care to share that part of his personal life on the net.....................

Anyway I'm an only child, my father worked long and hard hours, I got pretty much anything I wanted, we were middle class, we made it but my father was always working........I did very good in school had some things go down before graduation and I could really care less about life in general, made some bad decisions, I was poor, ended up with 2 kids(thats with protection folks, I think I understand about the comment of the multiple kids but just want to let yall know it can happen), the trade I'm in you start off making nothing, when you top off you are still making nothing(compared to other states(I'm in Louisiana)), we dont make much even with the demand ratio on our trade being very high and supply very low, my wife lost her job but recently got a knew one, making the most she has ever made, that is half what I make now(bills are still there, we are always on the edge)

But anyway the thing about the poor being lazy, I've done things for 6 dollars an hour that 75% of the people on this forum wouldnt do, so that doesnt hold in the wash, you want to enjoy your family, you want to spend time with them but you live everyday knowing one false step, one wrong move, you'll be driven even further in the hole, the middle class it is dissappearing with both my wife and I working we probably would be considered poor by most standards, I'm not looking for sympathy or anything just trying to prove my point.........

And whoever made the CEO comment, after 9/11 all these airlines were running around screaming without help we are going to go bankrupt, Delta was one of them, do you know with his salary and stock options the CEO of Delta makes something like 15million plus a year? There was only one airline that had no problems----------------Southwest and the reason was because the CEO felt if he capped his salary at 1 million he could live a very nice life and any extra he put away for a rainy day and that rainy day came on 9/11 and because he wasnt greedy, the grunts, the guys just like me, that provide the service so the CEO could make his money didnt lose their jobs like they did at Delta, the downfall of America is here and I vote either way(no political discussion intended), when CEOs makes millions and millions and screw the guys in the field(Enron) and a 18 year old kid that can dribble a basketball gets 80 million in a contract and a shoe deal, yet are teachers start off at 22,000 a year.........

9 times out of 10 to make money you have to have money and the guys in the middle dig their nails in the dirt hoping not to lose anymore ground

/rant off

Edited because I had my supply/demand ratio backwards.............
 

Eric_L

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Persent measures of poverty include only taxable earned income or retirement benefits (and maybe a bit of interest or other benefits). Anti-poverty programs such as food stamps, housing assistance, the Earned Income Tax Credit, Medicaid and school lunches, among others are not considered income. So, regardless of everything they do to reduce poverty, they aren’t counted when the poverty rate is measured.

In 2002 the government spent $522 billion on these programs, $418 billion of that was not considered in calculating any family’s income. Did that $418 billion do nothing to reduce poverty? Because of how we measure poverty, progress is unreported, even when families are doing better.

Studies that do take these programs into account have found a decline in poverty. In 2006 the Journal of Economic Perspectives reported poverty rates in 2003 would have declined from 12.7 percent to 9.9 percent if these programs had been included, meaning that poverty rate fell by more than 20 percent.

Here is a sniglet from an article I found;
"For most Americans, the word "poverty" suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. But only a small number of the 35 million persons classified as "poor" by the Census Bureau fit that description. While real material hardship certainly does occur, it is limited in scope and severity. Most of America's "poor" live in material conditions that would be judged as comfortable or well-off just a few generations ago. Today, the expenditures per person of the lowest-income one-fifth (or quintile) of households equal those of the median American household in the early 1970s, after adjusting for inflation.1

The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:

Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
Nearly three-quarters of poor households own a car; 30 percent own two or more cars.
Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher. "

IMHO for most people poverty (real poverty) is a temporary condition. Most folks are too self-motivated to stay in poverty for a lifetime. The lazy, foolish and drug addicts are the most likely to be in a state of permanent poverty.
 

SethH

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That certainly may be part of the reason, but there are several other reasons that SW has held up better than most airlines. Not the least of these is that the finance folks at SW did a MUCH better job with their hedging on gasoline prices. I'm pretty sure that to this day they are paying (or have the option of paying) the equivalent of around $35-$40 per barrel of oil.

Sure, one reason that they were able to hedge better is due to the fact that they didn't go into backruptcy (you can't hedge while in bankruptcy) and perhaps that's partially due to the CEO's salary reduction . . . BUT $15 million, while it is an absurd amount of money, would not really do all that much to boost the financial situation of a company the size of these major airlines.
 

JoeyR

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Maybe so, but when your fighting bankruptcy and your cutting mechanics jobs, ground crew, flight attendents, etc., I think its pretty relevant......

But to thats the mentality, I have enough of these little guys throats I can cut so why should I sacrifice......
 

Ken Chan

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How old are they? What condition are they in? Same go the for the TVs, VCRs, and microwave ovens.
 

Eric_L

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Ken; I think you missed the qualifying statement which places those items in proper context;

"For most Americans, the word "poverty" suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. But only a small number of the 35 million persons classified as "poor" by the Census Bureau fit that description. While real material hardship certainly does occur, it is limited in scope and severity. Most of America's "poor" live in material conditions that would be judged as comfortable or well-off just a few generations ago. Today, the expenditures per person of the lowest-income one-fifth (or quintile) of households equal those of the median American household in the early 1970s, after adjusting for inflation."

Also, I do believe a person is entitled to whatever wealth thy are able to accumulate through luck, work, talent, risks and intellect. I do, however, agree that in too many cases these things are not accurately reflected in some of the excessive executive incomes. Hell, not even for many entertainers. (Willian Hung should be paying ME! $#@!) The earned incomes of these people should not be a factor of luck when proper board governances are instituted. Most executives are paid fairly. A few of the highly compensated ones even are fair. It is only the abusive ones we ever really pay attention to (cough-cough Jill Barad cough).
 

Brian Perry

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Perhaps not moral but definitely practical. Imagine a corporation as a pyramid, in which you have hourly employees at the bottom, then supervisors, managers, and executives. At each higher level (and even within categories such as VP and Senior VP) there needs to be a significant increase in compensation to provide competition for promotion to the next level.

Let's say you were a VP making $80,000 and responsible for 30 employees. You are also one of 10 VPs at the same level, and your boss is a Senior VP responsible for all 11 VPs and a total of 200 employees. If you found out that your boss made "only" $90,000, would you want that job and its associated headaches? Probably not. However, if you and the other 10 VPs knew that your boss made $200,000 or more, there would be intense competition to be his successor and the company would theoretically benefit from all of the VPs trying their hardest. Likewise, the manager making $40,000 would try much harder to become VP if the VP made $80,000 instead of $45,000.

In other words, the CEO probably doesn't deserve $1 million or more per year; it's just that structuring the pay scales in an almost exponential fashion is the most effective way to incentivize better performance from people lower on the ladder.

Of course, there are some companies that are more horizontal (i.e., fewer layers from top to bottom). But the more layers, the greater the chance the top guy's pay is in the stratosphere.
 

Mike Graham

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I'm saddened to hear that some people on this board think the majority of poor people are "lazy." Work a few jobs associated with "poor" people and I think you'll quickly find how hard these jobs can be --- lots of stress, long hours, little compensation, and probably very little fulfillment.

They may not be poor because they lack initiative but because they've lacked the right opportunities.

Why is it hard for employers to fill these jobs in North America? It's not because people are lazy, its because the cost of living and the like is so high that people are constantly trying to find a better paying job to meet their needs.
 

Buzz Foster

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Steve

I'm not up on that data, but I would like to hear about this. I know that Toyota builds some vehicles here. If that is what you are talking about, then I am ok with companies earning money in America returning some of those earning to the local economy. But I would find it equally immoral for Toyota to build cars int eh U.S. for 30 cents an hour and then ship them back to Japan for sale and huge profits.

My Tacoma was built in Fremont, CA. My Kawasaki Vulcan was built on Hokaido island. Both were built by skilled, well-compensated employees. I have no problems with foreign trade between countries that have similar structures for employee rights and good wages.
 

SethH

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I don't have the exact data, but I do know that over the past several years we've had a pretty large ($50-$100 billion) trade surplus of white collar and service-based jobs. This means that other countries are outsourcing more of these jobs to us than we are outsourcing to them. These numbers also included the call centers that american companies are notorious for outsourcing.
 

drobbins

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I think you are in the minority, or Wal-Mart wouldn't be doing so well. As was brought up through out this thread, wages have stagnated and the standard of living is higher than the previous generation. This is because instead of buying one US made bike, for the same price, I can buy one foreign made bike, a few DVDs and some chips.
I had a job 10 years ago as a tool & die maker, & lived in 2 bedroom house in NJ. The three major companies that we built dies for closed doors and moved production elsewhere. I remember that one company that I made deliveries to, had a $20.00/hr high school drop out driving a forklift and he complained the whole time he unloaded my truck. The company couldn't compete in the world market.
I now worked my way up into management. Our company has as starting hourly salary of $14-15/hr. We have a 50% turn over rate. There are jobs out there if people want to work! And for the record, my wife started working full time only 3 yrs ago. You still can support a family on one income and I haven't been to college.
 

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