27 September 2012

The Middle Class

Carpe Diem | Mark Perry | Shifting Demographics Explain the "Hollowing Out"

[...] What Pew calls “economic polarization” might alternatively be described simply as changes in demographics over time. Compared to 1970, we now have more immigrants, more older Americans, and more young Americans in college as a share of the population, and that could help explain the “hollowing out” of the middle class and the increase in Americans with low incomes. Pew’s rather gloomy conclusion is that the middle class is shrinking and “falling backward in income and wealth.” But perhaps it’s more the case that shifting demographics and longer life expectancy over the last forty years can explain what is likely just a natural increase in the percentage of Americans classified as “low-income.”
To the extent the current distribution of people into arbitrary income "classes" matters at all, I'm with Perry.

You know, I was all fired up to write stuff about this but... whatever, man. I'm going to recycle some stuff:
SB7 | Robots won't kill the middle class -or- A sailor aint a sailor anymore: so what?

PS Just once when someone makes a claim about how "the middle class is disappearing" I would like them to define their terms. What do you mean by "the middle class"? Apparently people use it in Britain to mean anyone with savings who isn't part of the gentry. Many people use it to mean anyone in the middle three income quintiles. By that definition it is impossible for the middle class to disappear, since somebody must always occupy positions 20-80 out of 100. This fellow seems to use it to mean "people who hold jobs which traditionally resulted in mid-level-incomes, provided they require some skills and little physical effort." When you define it by tradition then the middle class is guaranteed to shrink. That's just how dynamic systems work. Furthermore people tend to conflate "middle class" patterns of production and "middle class" patterns of consumption. Don't forget to take that into account.
See also "The Not Too Rich."

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