Over five years ago, when we first dared to make the "bold" claim (a tangent of which now serves as the basis for bestselling books that paraphrase Karl Marx) that all Bernanke's idiotic assault on the average American, known as Quantitative Easing, would achieve, would be to crush the US middle class, it was ridiculed - perhaps we too should have charged a perfectly capitalist $23.97 [4]for this profound assessment to be taken seriously. Still, we are gratified to learn, some five years later, that indeed, the US middle class, well on its way to extinction, just took out the first and most critical milestone, to wit - the US middle class is no longer the world's richest. And yes, "it's all downhill from here."
Sadly, mostly for America's chauvinism, the distinction of the world's richest middle class now goes to Canada, while the poor in much of Europe now earn more than poor Americans.
From the NYT [5]:
The American middle class, long the most affluent in the world, has lost that distinction.
While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.
After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.
The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.
Much more in the full NYT article which in many words says what we said in a very few words back in 2009. Here is Pew's take on it too:
This week’s chart of the week (our screenshot doesn’t capture the interactive version [6])shows how after-tax incomes at different levels grew between 1980 and 2010 in the U.S. and 10 other advanced economies. (The data come from the Luxembourg Income Study Database [7].) Besides showing how steep income growth was at the upper levels relative to the lowest ones, the graphic shows how much different tiers of Americans have fallen behind their peers in other countries.
For instance, Americans in the 20th income percentile earned less in 2010 than Norwegians, Canadians, Dutch, Germans, Swedes and Finns in those countries’ respective 20th percentiles. Three decades earlier, 20th-percentile Americans earned more than everyone except Canadians. American and Canadian median per capita incomes were about equal in 2010, at $18,700, according to the LIS data. But other, more recent income surveys, “suggest that since 2010 pay in Canada has risen faster than pay in the United States and is now most likely higher,” the Times wrote.
But the American rich still make considerably more than other
countries’ rich. At the 95th percentile, U.S. per-capita income was nearly $60,000, more than $10,000 ahead of Canada’s top earners.
Enough words, here are the charts.
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