Tuesday, June 28, 2016

So what's really going on with the Middle Class?

The "elites" - and many College educated middle class people are freaking out about Brexit.  They're freaking out about the idea that more of Europe (France, Italy, The Netherlands among others) are considering their own exits from the EU.  They're freaking out about Donald Trump.  They freaked out about Sarah Palin and the Tea Party.

What gives?

Clearly this is a revolt of the middle class, but what's driving that?  We hear that the Middle Class is doing OK, but the numbers are interesting:
As the Antiplanner has previously noted, there is a lot of confusion about the term “middle class.” Surveys show that nine out of ten Americans consider themselves to be middle class, but in fact, six of them are wrong. Class is not distinguished by income, though it certainly influences income. The Antiplanner spent the first 20 years of my career earning a very low income, but I was college educated with college-educated parents and definitely had middle-class attitudes (never mind the fact that many of my peers scorned the “middle class” even as they formed a part of it).
Thus, when you read articles or listen to stories about the “hollowing of America’s middle class,” they don’t mean something is happening to the college-educated middle class. They mean that middle-income families are declining in importance as incomes are bifurcating into those with college educations having upper-middle incomes (or better) and those without having lower-middle incomes (or worse), with fewer having middle-middle incomes
This is in sharp contrast to the 1950s and 1960s, which were a sort of golden age for the middle incomes, and a time when the distinction between middle class and middle income was blurred. After World War II, the United States was the greatest industrial power in the world, as the rest of the world had to rebuild (or build) its industrial capacity almost from scratch. With huge amounts of capital and raw materials, labor was the scarcest of the three main factors of production. This raised working-class incomes, perhaps for the first time in history, to be nearly equal to middle-class incomes.
As Japan, Germany, and the rest of the developed world recovered or (in the case of Korea, Taiwan, and other countries) developed their industrial capacity, working-class labor wasn’t so scarce anymore. This is because it is easy for companies to hire people in other countries for working-class jobs, but much more difficult to hire people in other countries for middle-class jobs. The result, as the Antiplanner previously calculated, was that the difference in incomes between people with no college education and people with bachelor’s degrees or better grew from 65 percent in 1970 to 171 percent in 2009. Figure 5 of this Census Bureau report shows that education today has a far bigger influence on incomes than age, race, sex, or other factors.
This is very, very interesting, especially this:
In other words, what he calls the creative class is really just the middle class. When city officials say they want to attract the creative class, what they are really saying is they want to discourage the working class from moving to those cities. One way of doing that is high housing prices, and urban areas containing around 40 percent of American housing have artificially inflated housing costs thanks to urban policies designed to attract the creative class (and discourage the working class).
And so to Brexit, and the revolt of the middle class.  Class Warfare as it has been waged for the last 15 or 20 years is not openly smoldering.  And the "Elites" have absolutely no idea what to do.

Other than to ramp up the class warfare with gun control proposals and the like.  If everything weren't burning down around me, I'd enjoy the spectacle, in a very Last Days of Rome sort of way.

1 comment:

Brigid said...

All I know is I paid $56,000 in income tax last year and can't afford to buy the amount of ammo I want to go "splody" each weekend. I am seriously unrepresented by the current ruling class it appears. (We won't mention that temporary bacon shortage).