Follow ZeroHedge in Real-Time on FinancialJuice [5]
Every wondered why the rest of the world envied the US middle-class? There were many reasons once, a long time ago and one of them was their affluence, their wealth, their ability to be able to afford whatever they wanted. But, that was back in the days when there was a team spirit out there in the US. People were working together not against each other. Today, nobody envies or eyes the American middle-class; it’s poverty-stricken and has turned into the poor workers (if they even have a job). Middle America is so yesteryear. Today, it seems as if it’s fashionable to be poor; at least, we’re all doing it.
The fat cats are grabbing the cream at a faster pace than most other countries in the world, but Middle Americans are doing far from well in comparison with other middle-classes around the world today. For the first time in decades, the American middle class is in decline in comparison with other countries.
It’s the first time in forty years that the Canadian middle-class equivalent family has been better off than the American middle class. That can’t be said in less stark terms. The nineteenth century was characterized by the abolition of the ruling classes to the benefit of the middle classes, growth in wealth and better sharing out of what was in the coffers of our nations. Today, the decline of the middle class in the US is on and it will be mirrored by all other nations in the world in years to come. We have returned to feudal England, the ruling few and the poverty-stricken masses.
But it’s now the Canadians that are doing better than the middle class Americans. The mere fact that it’s Canada is even harder as a blow for the middle-class Americans that laugh at the late-night TV-show jokes that use the guys just over the boarder as the butt of their every joke. It’s middle-class Americans that will have the tables turned on them now. The idea that they still have more income than others in the middle classes around the world is now a thing of the past.
How can the US maintain its position of the superlative-laden economy where things are done best? It can’t in a world in which the Chinese have understood that they need to send their kids to school; Highly-skilled people are now just about everywhere and competing with that is impossible. The US has failed to redistribute the wealth of the nation in a fairer way and it’s the top layer that gets to keep more and more. The lower echelons just slumber in growing struggles to keep their heads above the water. Who gets favored by the tax system in the US? Certainly not the middle class.
Median income in Canada was already on a par with US median wages in 2010. Over the past decade countries in Europe such as the UK, Sweden and the Netherlands are slowly closing the gap in median incomes with the US. Once upon a time, it was the US that was way ahead, now the gap is closing fast.
Per Capita gross Domestic Product (PPP) shows that the USA is not doing so badly. It’s the 8th country in the world today in terms of GDP per capita (PPP):
The USA has the wealth, but it’s not being distributed in a fair-deal way. For the middle class to be suffering like this it means that the money is going somewhere else than to the middle class. Americans that are in the middle class are not managing to keep up pace with their counterparts around the world.
• Median income stood at $18,700 in the US in 2010.
• That’s $75,000 for a family of four after tax.
• This means a 20%-increase in comparison with 1980.
• But, it’s not moved at all since 2000 (after adjustments for inflation).
• In the UK there was a 20%-increase between 2000 and 2010.
• Median Income in Canada rose also by 20% over the same period.
Thankfully, the US is a country of gamblers, a place where there will hopefully be a big-game hunt for the idea that will renew the challenge of the economy. In the meantime, it’s the middle-class American that looks as if it is nearing extinction.
Originally posted: US Middle-Class Is Going [6]
Day Trading Data Sheets Futures and Forex [7]
[5]