5 Trends That Are Destroying The Middle Class In America

Tyler Durden's picture

Authored by Michael Snyder via The American Dream blog,

The middle class in America has been shrinking for decades, and our leaders seem powerless to do anything about it. Two years ago, the middle class became a minority in this country for the first time ever. In other words, the middle class now accounts for less than 50 percent of the population. But back in the early 1970s, the middle class made up more than 60 percent of the population. I have often compared being in the middle class to playing a really bizarre game of musical chairs. When the music stops playing each month, more chairs are being pulled out of the middle class, and most of us are just hoping that we will still have a chair for the next go around.

Earlier today, I came across a USA Today article that discussed some of the factors that are slowly but surely eviscerating the middle class. I am going to share four of those factors with you, and at the end I am going to add one extra one.

First of all, the article pointed to a decline in manufacturing and the rise of “service jobs” as one of the key trends that is changing the nature of work in America…

‘Once dominant industries, like manufacturing — which paid well even without a college degree — have been overtaken by service sector jobs, most of which are low-paying, according to the Bureau of Labor Statistics.’

In the old days, even if you didn’t have any higher education you could support a middle class family by working in manufacturing. We were the greatest manufacturing society that the world had ever seen, and Detroit had the highest per capita income in the entire country. But after decades of sending manufacturing jobs overseas, manufacturing’s share of the U.S. economy is at an all-time low and formerly great manufacturing cities such as Detroit have become rotting, decaying hellholes.

Secondly, the USA Today article pointed to the rising cost of a college education

‘The cost of getting a college degree is up more than 1,000% since 1978, according to Bloomberg.’

This is a particular pet peeve of mine, because I am still paying off my old law school loans. We encourage our students to get as much education as possible and to not worry about all the debt, but then millions of them find themselves financially crippled and without good jobs once they graduate. This makes it extremely difficult for a lot of our young people to enter the middle class.

Thirdly, the USA Today article brought up stagnant wages and the rising cost of living

‘Decades of stagnant wages mean both parents must often work to make ends meet, creating a need for child care and elder care that didn’t exist in 1950, for example, when two-thirds of women were full-time “homemakers” aka caregivers, according to the Bureau of Labor Statistics.’

Once upon a time, a single income could easily provide for a large middle class family in America. But today so many families have both parents working, and yet many of them still find it very difficult to pay the bills each month. In fact, surveys have found that somewhere around two-thirds of the entire country is living paycheck to paycheck.

Fourthly, the USA Today article mentioned “the gig economy” as a major issue

‘The gig economy (Uber, Airbnb) has exploded, giving workers more control and flexibility, but fewer benefits or legal protections.’

Independent work and contract work have become major societal trends, and this isn’t going away any time soon. These types of jobs do not typically come with health insurance, retirement benefits, etc. and so this is something that our nation is going to have to wrestle with.

Fifthly, I would like to throw in the decline of small business and entrepreneurship in America. Working for yourself or starting a business have always been ways to lift yourself up into the middle class in this country, but today it is harder than ever to become independent. The government is absolutely killing small businesses and entrepreneurs with rules, regulations, red tape and high taxes, and little relief appears to be coming our way any time soon.

At this point, the percentage of Americans that are self-employed is hovering near the all-time record low, and if we hope to have a thriving middle class ever again we need to get this fixed.

We also need to train our young people for the jobs of the 21st century. At one time we had one of the best education systems on the entire planet, but today our system of public education has become a global joke.

And I am not exaggerating one bit when I say that.

To give you an idea of how badly the quality of our workforce has declined, I want to share with you something that the owner of a small manufacturing company posted in an Internet discussion forum

I own a small manufacturing company. Most of the assembly work is done at a bench, with hand tools. The work is not difficult, but quality and consistency is paramount.

 

We are entering into our busiest time of year, and steady growth combined with losing one of our senior bench techs has caused me to run some ads (after spreading the word around to friends and associates).

 

I have been involved in the manufacturing business for about 30 years, and have seen thousands of resumes.

 

The last couple weeks I have been reviewing a couple dozen resumes a day. What I am seeing now, is stunning and disappointing. When did people stop learning how to compose a sentence? When did they decide that a resume composed of two sentences is somehow complete? The poor level of spelling, grammar, and frankly effort has me perplexed and perpetually face-palming.

 

So far, I have two resumes that were not immediately round-filed. Just two.

 

If this is the current state of our potential work force, we are in trouble.

That really resonated with me, because I have heard pretty much the same thing from so many business owners over the years.

Decades of following the “progressive agenda”, and I am talking about both Democrats and Republicans, has been absolutely disastrous for our society.

We desperately need a complete and total cultural revolution, and that means returning to the values and the principles that this nation was founded upon.

If we continue on the same path that we are currently on, the middle class will continue to deteriorate, and our nation as a whole will continue to decline.

We can do better, and we must do better.

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Croesus's picture

"We can do better, and we must do better."

Maybe you should actually try working, instead of sitting on your ass and whining about the obvious, Snyder.

Try starting a manufacturing company, and see how difficult it is firsthand, instead of cut & paste sources from web forums, used to pad your writing.

Sick of these hack writers who can't create content without relying on anecdotal evidence from others. It's lazy.

Paul Kersey's picture

The five things that are destroying the middle class:

1. banksters
2. banksters
3. banksters
4. banksters
5. banksters

subversion's picture

...and the Government working with the FedRes to print money. When the petro dollar dies so does America.

NidStyles's picture

Let's start a list:

Refugees
Illegals
H1B's
Bankers
Multi-Nationals
Environmental regulations
"Free-Trade" agreements
Dual-citizens

I could keep going...

Endgame Napoleon's picture

Welfare-buttressed workers, like single parents, do not need higher wages and, in fact, benefit from lower wages due to qualifying for more free food, free or reduced-cost housing, free energy, nearly-free childcare, free monthly cash and cash at tax time in the form of a Child Taxfare Check of up to $6,269, which is equivalent to 4 months of wages in a $9/hr job.

Workers who compete with her for jobs without access to these copulation/reproduction rewards are in trouble. They have to pay all bills from earned income, but employers prefer workers who can accept less pay due to unearned income unrelated to the job.

Ditto for moms with spousal income or child support checks that cover the big household bills.

Childcare is always cited as the next freebie to bolster working moms and the middle class, even though working moms are part of the reason for the demise of the middle class.

When women entered the workforce en mass, the middle class started its decline due to twice as many workers chasing jobs. This was particularly effective in lowering wages because of the fact that so many women have unearned income related to womb productivity, but not all, and those women (minus the affluent ones) are totally, 100% s*****d by ALL politicians, as they tend to work in the low-paying, momma-clique service sector.

GeezerGeek's picture

I notice that all those causes you listed are a result of government actions or the lack thereof. To a large extent, most of the ills of the middle class (and just about all the rest of America, too) can be traced to government not acting in the best interests of Americans in general, but rather doing whatever it can to enrich the elite.

There is one other factor involved in the decline of the American middle class, and I have not seen it mentioned. And it has nothing to do with government actions, unless you want to consider bombing the shit out of Germany and Japan in WW II as a government action.

After WW II, America was in possession of the only intact industrial complex in the whole world. It was inevitable that American industry would thrive, and back then that meant American union employees would thrive. America was without competition for supplying the pent-up consumerist desires of all those GIs and their wives and their baby-boomer children. Remember that consumer demand had been damped during the Depression and generally suppressed during WW II. Unions got greedy just as competition from rebuilt Japan and Germany built up. American industry found itself saddled with old industrial technology and unsustainable employment costs. The rest is history.

Growing up in the 1950s as I did makes it easy to see the wonders of the bright future we saw and to overlook the rather unique circumstances that enabled the American middle class to blossom. Reality requires that we understand the past to help us understand the present.

That doesn't mean we shouldn't drain all the government swamps.

Juggernaut x2's picture

The largest misallocation of capital in history is the one that has been funneled to the jews' Wall St skim

Dammit Walter's picture

The system so rigged with regulation and cronyism against the little guy that it is almost impossible to succeed.   You must sell you soul to the Corporate Lords and Earls.  Welcome to the new feudalism.  Take out a loan for education, then pay back your debt as an indentured servant.  <sarc> Get off your ass and work the fields harder!  </sarc>

 

Endgame Napoleon's picture

Well, I am for helping students some, but mostly just the top students, even though I would not get that help. I was no top student, although I did finish one degree. To maintain (regain) our status as a middle-class country, we do need some finely honed minds.

But some things complicate this issue:

1) Are we going to help people pay off other types of loans that help bolster the middle class?

My ex and paid a business loan twice the size of the average student loan in only 5 years. It was a struggle, consuming a good part of my 30s, and we did not get anything out of it, either, other than paying the bank and a meager living. We did make a living and were actually on our distributor's top 10 list, but we had to make a lot of sacrifices in our personal life.

a. going out to eat less than 10 times in 7 years of married life.

b. going on almost no trips, even minor ones.

c. buying very few clothes, no furniture or any other extras.

d. ughh, this is the worst: not utilizing the discount at a very fine gallery where I once worked.

I could go on and on. It was bare bones.

These students, not just the top echelon, often expect to have a Princess Kate wedding, a home in a trendy area and trips to Europe galore. The welfare/taxfare moms get their major bills paid for reproducing out of wedlock, and the college crowd can't reproduce unless both parents work, with most of their money -- borrowed or not -- going into a lifestyle that even the most highly educated professionals did not have in youth in past eras. One of my parents has 3 degrees from a private college in a technical field. Yet, my parents did not live like that when they were a young couple with young kids, nor did many of my customers in the luxury item business I owned. In their youths, many lived more modestly. How can you pay a student loan, in addition to keeping up with the most successful Jones'? Which brings me to my next point.

2). Two high-earner couples are not contributing to a bigger middle class, quite the opposite, and yet, the increasing level of higher education is responsible for this phenomenon. They concentrate the wealth from two, high-paying, salaried jobs in fewer households without creating jobs for others in most cases. The women insist on working throughout their childbearing years, constantly demanding even more excused absenteeism privileges. This means that fewer of the good-paying jobs open up to expand the middle class. These educated women also often take the low-wage jobs in safer areas of cities, supplementing their hubby's ample income by adding a little more money to the family till for luxuries and taking off a lot for kids. They either take low-wage jobs, helping to increase the underemployment of people who lack unearned income from spouses or reduce the number of households with a high-earning breadwinner by concentrating the wealth from good-paying jobs in fewer households. They want government to pay for their childcare, their maternity leave and their student loans, while they help decrease the middle class.

http://www.pewresearch.org/fact-tank/2014/01/29/new-academic-study-links...

The_Dude's picture

Fiat money and fractional reserve lending are the poisons.... An evil brought to you by...

1033eruth's picture

ZH is either worthless as an information source or huge numbers of people can't put the clues together because its much easier to target a segment and say, "WITCH"!!!

Majority rules is destroying the middle class

Lobbying by special interests HAS DESTROYED the middle class - Lobbying aka bribing - absolutely no difference except that Uncle Fraud legalized bribing for politicians.

Buying votes with taxpayers money is destroying the middle class

Once politicians found they could BUY your vote with YOUR money, then it was downhill from there.  Banksters had NOTHING to do with that process.  

29 idiots voting thumbs up and 2 people for whatever reason voting thumbs down

ZH where the clueless roam - in great and overwhelming numbers.

 

Endgame Napoleon's picture

Trump proposed a lobbying ban for 5 years after serving in the Swamp Congress, which holds the power of the purse. Make it 10, include wives and staff, and we might see some progress.

edotabin's picture

Hearz my resimmay for my aplikashun for, like, the top dollar jobs you menshunned. I wanna work there brah....i got skillz n shit.

I gotta a ton of det cuz i gotta degree in Lesbos of the South Pacific man so i need the incum.

 

Not exactly 1033. It's a vicious cycle really.  .Gov wants conformity.  People want security.  After a while the ethos deteriorates. .Gov makes it easier and easier to be on their payroll and less and less beneficial to work hard, innovate, progress, advance etc. So,  over time .............

Zorba&#039;s idea's picture

Yes! America's Federalized Education SUCKS! However, at the core of the MC decline is our debased currency. Fix our stinking fiat! Solve "Triffins Paradox"!

venturen's picture

PUBLIC UNIONS PAYING DEMOCRATS TO DESTROY THE MIDDLE CLASS!

Benito_Camela's picture

I'll agree with you on the anecdotes. Unsourced anecdotes unbacked by actual numbers or demographic context are lazy and meaningless. 

847328_3527's picture

Just take a look at Evergreen college and we see one more reason there is no middle class.

Benito_Camela's picture

What, a bunch of SJW snowflakes at a tiny college in Washington State are why we don't have a middle class? Get real. You're carrying water for the banksters and you don't even know it. 

curbjob's picture

Indeed.

The media (which includes ZH) have programed the sheep to look down.

 

hongdo's picture

I'm too busy filling out license renual forms and state questionaires and tax forms to write articles.

Abbie Normal's picture

Too busy to use spell-check too?

hongdo's picture

The option in the tiny header just nags you and tells you are wrong, like you.  Not helpful.

Salsa Verde's picture

Doing one's own research is triggering.

Raging Debate's picture

Croesus - I appluad Mr. Snyder's efforts. But if he is reading this his job reporting of the unreported is done, mainstream is now doing it. They sell ads to pay for it, as does ZH. 

So I hope he goes and finds a chair because God knows he deserves one. Ths man should take a bow and be proud he helped educate the people when he could in an important but dark cycle of history.

My chair is now in jeapordy and what I could say of value, has been said. I am lucky though, I had enough options to exercise my freedom of speech, I have some small hedges but enough to transition into something still with some demand but little competition. -  hopefully :^)

Bill of Rights's picture

Does Con-Me have any notes when Clinton met Lynch on the tarmac?

Dutch1206's picture

Middle class is done.  It isn't coming back.  The middle class is now just something politicians talk about to get elected.

FreeShitter's picture

This country is simply the top 20% which is doing well and the other 80 percenters which are in some sort of hell. Two tier society indeed.

Dutch1206's picture

Absolutely.  It's the way the system was intended to work.  The "American Dream" started out ok, but little did most people know that it was a long-con that has left this country in the state it is today.  I laugh everytime I hear some clown talk about re-building the middle class.  Or even insinuating that it can be re-built.  It's a fucking pipe dream at this point.  The entire monetary system was build on financial enslavement.

847328_3527's picture

Obama was too busy buildling China's middle class.

Dutch1206's picture

How much influence do you really think a President has over the economic advantage that China has in manufacturing?  If goods can be produced cheaper somewhere then they will be.  It's simple economics.  Sure we can save manufacturing here, if labor is willing to take a massive pay cut to compete with low cost Chinese workers.  Sure, we can impose tarrifs on imports from them.  Those tarrifs will just be another indirect tax on the US Consumer as some (Maybe most) of the cost is passed through to the end user.

Benito_Camela's picture

In the absense of other specifics, I'd say he tried to do that but failed - with TPP. 

hongdo's picture

And most people won't admit there is more luck than anything else ( well perhaps corruption) involved in which one you fall into.

ratava's picture

Because the 80% do nothing to make themselves useful to the modern society and cry about the good old days. Machines replaced your dad, you won't get the same job as him. Getting $100k of college debt and a useless humanities degree is not gonna help you either. Stop following the fucking unofficial rules and expert advice. They are there to enslave you. There is all the information you need on the Internet to be successful, so just use it and shut the fuck up.

rent slave's picture

All of us don't live in Nevada,the land of economic freedom.

Endgame Napoleon's picture

Yup. There are the 20% of two high-earner couples, taking all of the good-paying jobs, like the "flextime management" jobs, with the women calling for ever more absenteeism privileges for kids, although some men do as well. The feminists use that as their excuse to maintain the status quo, saying see men do it too. The womb-based feminists throw a smorgasbord of welfare/taxfare freebies to the single moms, enabling them to work low-wage jobs, with "independent" housing financed by Uncle Sam. And the rest are 100% s******d, including the single moms after their womb productivity dries up, leaving them, too, with only the wages from these temp, part-time and churn jobs in the crappy service sector. The thing that will disrupt it is automation. They have bots that can look up a law statute more efficiently than a human with a law degree. Some even say that programming and medical jobs will be reduced by bot replacements It is not just the blue-collar jobs that will be absorbed by the robot competition; it is the lower level of professional jobs as well.

aliens is here's picture

Our leader are not powerless they are the one doing it to us middle class.

LittleGreenMan's picture

Agreed!  The opening line is bullshit:

The middle class in America has been shrinking for decades, and our leaders seem powerless to do anything about it. 

Our "leaders", the 0.1% who control the gov, MSM, and corporate america have spent decades corrupting the system to their benefit at out expense.


Paul E. Math's picture

Campaign finance rules mean that the super-wealthy decide the outcomes of elections.

The rest of the wealthiest 10% are house-n****rs who don't realize they have no power but benefit just enough from the system that they support its perpetuation.

The other 90% toil in the fields with a whip across their back, no power and no voice by which to organize resistance.

It all comes down to campaign finance rules.

Endgame Napoleon's picture

He said "seem" powerless. Our leaders are good actors. Well, some are grade-C actors. Some are talented.

curbjob's picture

I don't usually subscribe to shooting the messenger  ...

Consuelo's picture

 

 

But when you do...    Please use 180 gr. JHP's...

Termin8or's picture

The plan is working.  Most everyone will be dependent upon our wonderous government overlords!  WINNING.

Endgame Napoleon's picture

Trump was trying to [save work] for American citizens of all
stripes, including the naturalized citizens, by limiting mass, job-displacing, wage-suppressing immigration and bringing some manufacturing jobs back here, etc. But the stupid Swamp Congress and the yapping MSM, with their six-figure gossip jobs, will not let him get anything done. The MSM is part of the 1%. They are the Establishment and not the most productive part, either. They do not want anything to change economically, but want to pretend like they are for the little guy by fighting a racism against minorities that was defeated in all meaningful ways 50 years ago. The reverse racism, not so much....

marcus1922's picture

"The middle class in America has been shrinking for decades, and our leaders seem powerless to do anything about it."

Powerless? On the contrary, they have spent 100+ years doing everything they can to destroy the middle class. What exactly is "progressivism" is all about, if not giving total control to a small cadre of elites while forcing the rest of us into various states of dependency?

It's the same old collectivist plan, only in much slower motion and therefore much easier to make people accept it in the name of fairness, equality, whatever. Until it collapses as it always does. Only this time the elites will be more than prepared to ride it out.

Benito_Camela's picture

Corporate and individual tax rates right now are a lot lower than they were during the U.S.'s supposed golden years of the 50s and 60s, when most of the people who started uber (sorry for that one) successful American businesses were being raised and educated and the engine of the U.S. economy was manufacturing and civil sector jobs.  

Welfare requirements are stricter than ever, private unions are the weakest ever and health care is more expensive than ever (which was the case even before Obama's giveaway to the HC corporations and insurance/pharma companies). So I fail to see this grand collectivist plan you speak of. About the only welfare programs that I see in action that don't have any real accountability are the socialist giveaways to Wall Street and the mega rich and the taxpayer funded Military Industrial Surveillance complex jobs program.  The rest of us got nothing. 

Granted, the tax code needs to be drastically re-written and there have to be realistic allowances for individuals that work as private contractors and small business owners. But it's the globalist interests, corporations and bankers who prevent that from happening - and they own both sides of the political aisle. Can't have mom and pop competing with Wal Mart or local/regional financial services companies competing with Goldman and Citi or Chase. 

hongdo's picture

You are not accounting for all the new taxes and fees we have now.

Benito_Camela's picture

Give me some examples and include loopholes and net taxes paid on a corporation-by-corporation basis. Thanks in advance. 

 

FYI - what I stated (or meant anyway) was that the MEGA rich individuals and corporations pay much lower taxes now than they ever have, including the 50s and 60s. My stance on small business is clear for anyone to see. 

 

BTW - how many of these fees and such are state and local vs. federal? 

GeezerGeek's picture

You are correct in stating that the individual tax rates were much higher in the 50s and 60s. There also were gazillions of available deductions, most of which no longer exist. My recollection is that the effective tax rates were much lower than the statutory rates.

That recollection comes from reading in the late 80s or early 90s, and sorry, but I have no link for you. Back then there were numerous complaints about Reagan's tax rate reductions, and some pointed out that the rich were in fact paying more once the rates were lowered and deductions were ended. Perhaps someone can do a better job of linking to the real data.