End of a middle class?

Thanks to Wikicommons

Are You about to become EXTINCT?!?  If you are a member of the Middle Class, we are talking to YOU!

That’s right there are some pretty smart people out there saying the American middle may go the way of the DoDo bird and be found only in museums.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

This is the dark projection Michael Snyder provides via Yahoo! Finance.  The article provides a number of shocking statistics to support this view.

Not only is the middle class being squeezed while they work but their retirements are threatened as well.  Laura Basset of the Huffington Post notes

The percentage of American workers who said they have less than $10,000 in savings grew to 43 percent in 2010, according to a recent survey by the Employee Benefit Research Institute. Nearly a quarter of the workforce said they have postponed their planned retirement in the past year and a CareerBuilder.com survey reports that 61 percent of workers say they are now living paycheck to paycheck, as compared to 43 percent in 2007.

Such a large issue can’t suddenly appear; why hasn’t the collapse of the middle class been noticed before?  An excellent piece by Edward Luce of the Financial Times answers this noting that

For years, the problem was cushioned and partially hidden by the availability of cheap debt. Middle-class Americans were actively encouraged to withdraw equity from their homes, or leach from their retirement funds, in the confidence that ­property prices and stock markets would permanently defy gravity (a view, among others, promoted by half the world’s Nobel economics prize winners, Spence not included). That cushion is now gone. Easy money has turned into heavy debt.

There is truth in this statement but the collapse of the American middle class has been noted before.  It was so long ago we forgot.

The great American middle class, the provocateurs contend, is no longer so great. It is shrinking steadily, goes the theory, and shedding its members into the economic extremes of wealth and poverty.

This is part of the opening paragraph from a Times article written in 1986.  Fears of a disappearing middle class are nothing new.

If this problem has been seen as a threat for so long is it really a problem than?  The middle class survived the 1980s can’t they survive the 2000s?  That will have to be seen but this recession has far surpassed its post War predecessors.

Thanks to Democracy in America

As reported by the Economist’s Democracy in America the duration of unemployment has increased to levels previous unseen.

This would make one believe things are worst than before.  However, the US middle class has over come in the past so perhaps they can continue to soldier on.

Frankly, we at US Democrazy have no idea.  What could really help us, and you, understand the state of today’s middle class would be for our readers to report what the US  (or other countries) economies are like in their area.  So stop just reading and start reporting; we’re glad to listen for a while.