I have started to research the idea of the disappearing or shrinking middle class as part of a book project (for 2015) I am amassing materials for. The idea is simple but the conceptualisation and demarcation of the idea is rather complex. The hypothesis is that Capitalism is now striking at the income and wealth segment that has helped give it stability (which in this sense relates to not having a revolution rather than eliminating major economic cycles and mass unemployment). Marx said that religion was the opiate of the masses that kept them in line whereas in modern times it is mass consumption and credit that seems to keep the middle class in line. The rise in income and wealth inequality over the last 3 decades under the watch of neo-liberalism is obvious and initially showed up as a widening 90/10 gap (the numbers being deciles in the relevant distribution). But as the lowest income groups were marginalised, the dynamic moved on and started hollowing out the middle deciles. Real wages have lagged well behind productivity growth and mass unemployment is infiltrating the middle-income cohorts who typically have superior education, which has insulated them from job loss. The US Census Bureau provides excellent data on – Wealth and Asset Ownership, which allows us to trace the trends in household net worth and debt in the US in some detail. This blog just documents some of the characteristics of those distributions – it is preliminary work for me but of interest nonetheless.Bill Mitchell – billy blog
Same old story – poor getting poorer and more indebted and the rich …
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia
5 comments:
It always amazes me how most Americans (and most Australians too) can think of themselves as "middle class" when (referring to the first chart in Bill's post) quintiles 1-3 have no significant net worth to speak of, quintile 4, on average, possesses about $200k, and even a substantial fraction of quintile 5 can't have that much considering the average net worth is about $600k and this average would be skewed by the top end.
I hate to break the news -- and this is coming from a guy without the income or net worth even to qualify officially as "poor" -- but these people appear to be mostly kidding themselves. They are Kalecki's quintessential "spend what they earn" working class. ;-)
The history of biological evolution is dominated by those species that fully invest what they harvest.
(Those "successful" ones, which uselessly over-sequestered assets, & over adapted to transient contexts ... are all extinct.)
We should all be working poor. As should every nation.
Options count more than foregone (i.e., hoarded) fiat.
http://mikenormaneconomics.blogspot.com/2013/12/conflating-current-fiat-with-future.html
ps: Bill lauds the excellent data available on this in the USA.
Excellent data? Ironic, how well we document our own demise …. WHILE DOING NOTHING ABOUT IT!
Data means nothing to mules …. without an accompanying 2×4? (To get their attention, to context & meaning?)
Data may be meaningless w/o context, but it's also irrelevant without practice USING it.
(In real-time.)
Most of the "middle class" is one paycheck away from the poorhouse.
So much of the world is a mere 3 meals away from total chaos.
It's frightening.
Post a Comment