The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it

Posted Jul 15, 2010 02:25pm EDT by Michael Snyder in Recession

From The Business Insider

Editor's note: Michael Snyder is editor of theeconomiccollapseblog.com

The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

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.

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

Here are the statistics to prove it:

•    83 percent of all U.S. stocks are in the hands of 1 percent of the people.
•    61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
•    66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
•    36 percent of Americans say that they don't contribute anything to retirement savings.
•    A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
•    24 percent of American workers say that they have postponed their planned retirement age in the past year.
•    Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
•    Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
•    For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
•    In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
•    As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
•    The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
•    Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
•    In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
•    The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
•    In America today, the average time needed to find a job has risen to a record 35.2 weeks.
•    More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
•    or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
•    This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
•    Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
•    Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
•    The top 10 percent of Americans now earn around 50 percent of our national income.

Giant Sucking Sound

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.

But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.

The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult to rebuild.

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100 Comments

  • A Yahoo! User
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    A Yahoo! User Wed Sep 01, 2010 08:24 am PDT Report Abuse
    My conclusion is that all of us will become stress,cancer and lost many time and money if we continue reading all articles about politics, economics, laws ... in this Yahoo website and other websites as well as watching on TV.

    I donot care about your solutions and discusions because all parties are corrupted and all citizens are brain washed by TV, movies, newspapers, websites, our education system, and parties.

    All partiots have no change to become the USA President because all people are corruptions and all of patriot's comment in Yahoo website are deleted :(

    My best solution is that I will search for healthy foods (fruits and vegetables) and eat them instead of eating drugs, try to pay off my debt, watch funny movies and Dr. Oz shows on Channel 16, and read healthy books of Dr. Edward Griffin.

    Good luck to you! Have a nice day! Be healthy!
  • 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    OK-bot Fri Aug 27, 2010 10:51 am PDT Report Abuse
    Ask yourself.

    Who owns you.

    Now deal with it because you're pwnd
  • 2 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 3 users disliked this comment
    Kat2010 Wed Aug 25, 2010 09:55 pm PDT Report Abuse
    There are NO FREE RIDES; Democratic or Republican, it does not matter! BRING BACK MANUFACTURING INTO THIS COUNTRY! REPEAL NAFTA! Having said this, outlaw ALL income tax and get RID of all the loop-holes.... NOW then, put a flat 15% SALES TAX on EVERY PENNY SPENT, on EVERY ITEM SOLD in this country; hardlines, softlines, food, entertainment, EVERYTHING!!!. Sounds scary right? Well, stop and think for a moment. WHO spends MORE money; the Wealthy or the Poor? NOW you begin to see FAIR taxing... AND guess WHAT? The ONLY tax exemptions will be to MANUFACTURING.... Oh my goodness, do I see Corporations RUSHING to bring the manufacturing plants BACK inside the U. S.? The wealthy may NOT show genuine incomes, but be assured, they DO SPEND! TAX the their spending and let their factories claim exemptions....
  • 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    god in devils clothes Sat Aug 21, 2010 05:04 pm PDT Report Abuse
    This is a recession where there are no GOOD jobs. McDonald’s is hiring, there is a bank teller shortage. Is that what you really want to do?

    Perhaps you've thought of getting your MBA?

    MBA applications always go up during a bad economy. The problem is that an MBA tends to make it worse.

    Here are several reasons why...
    ...
    1. Business school won’t help you be a good entrepreneur.
    2. You likely don’t need an MBA for what you want to do.
    3. The cost of the degree is so much more than the combined cost of taking two years off of work and paying for the degree.

    If you really want an education, You need to learn how to earn using the best practices in today's economic reality.

    Globalization and technology will continue to eliminate more and more jobs. This is nothing new.

    In fact, we've been experiencing this shift for more than 6 decades. I liken it to boiling a frog. If you stick a frog in a pot of boiling water, it immediately jumps out to saftey. However, if you put a frog in a pot of room-temperature water and slowly bring it to a boil, the frog stays in until it boils to death.

    Americans have become like the frog due to the length of time this transition has been taking place. We have been desensitized. The reality is, we are moving into a new type of economy faster and faster as time goes by.

    It is important to note, YOU have control over your own economy. There are more opportunities today than at any other time in history. And, with the collapsing banking system and the stock market in shambles, your finances should now more than ever be controlled by YOU! Your financial future is at stake.

    There's one simple reason why most people don't make the improvements in their lives that would make things better... They choose to 'rationalize' that is, tell themselves 'rational lies,' because it might shake things up a little too much.

    You've got a choice:

    You either be dependent on the government, in essence they own you, or you stand true to the values that this great country was founded upon, (i.e. the land of opportunity). Or, to put it another way...

    Either go after the knowledge and opportunities that will make a difference or continue to dwell in your own misery.

    Matthew Avalon - Mount Avalah Education Services
  • A Yahoo! User
    1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    A Yahoo! User Wed Aug 18, 2010 07:12 pm PDT Report Abuse
    I knew this was going to happen when intellectual achievement went unnoticed in the U.S. and the literary traditions vanished from common people. Among the elites the intellectual stuffs are still modestly appreciated as long as the intellectual elites behaved like emotional workers for wealthy college kids.
  • 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    Trisha Wed Aug 18, 2010 07:46 am PDT Report Abuse
    Our biggest vote counts where we make our purchases. We as consumers can end this dependence on the foreign market and bring jobs back here by insisting on buying American whenever possible. This is how we are slowly making changes in the food industry. People started being concerned about what they were eating and started paying a little extra for organic. Now the organic market is booming. The same thing can be applied to our market. Big companies must go to where the money is.
  • 5 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 2 users disliked this comment
    Greg Sun Aug 15, 2010 01:25 pm PDT Report Abuse
    America is mad, mad, mad because Obama can't fix America now. He was hired to fix it and he was on the way then BP spread oil all over the Gulf. He has made some movement in America towards decent health care. He is trying to get us out of two wars started by them and he is trying to bail us out of a total world depression, caused by them, and to fix the system so that it doesn't happen again.

    We are mad because the Government does not work. We keep forgetting that takes a couple of years to fix a broken Government Work Force.
    And we are mad at him because he can't create employment other then Government jobs. Folks he can't bring the jobs back, they are gone. Either you demand jobs from the financial sector or you work for the government or go on welfare, there are not a lot of options.
    America was created because we wanted something better and we were willing to work fore it. We took over a land that was like Eden and we moved here to better our selves. We moved to America from all over the world because we wanted something better for ourselves and our children. And we worked for it. In the beginning we had great leaders who tried to set up a government that was structured to benefit every citizen of America, and they did a very good job. It is too bad that they did not realize that Capitalism needed to be controlled from the beginning. They did not realize that men would create a world where businesses had the same rights as citizens and were not responsible for their actions as citizens are. The founding fathers did not realize that Capitalism is too addicting to left uncontrolled.
    If you want to help fix this problem you can starting telling Capitalism that this is a Democracy. If not you can move to Panama where you can afford to live well with very little money plus they have a good national health care system with very skilled medical people.
  • 5 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    Bernard Sun Aug 15, 2010 10:07 am PDT Report Abuse
    The western elite throws resources toward middle class demise from all angles through political bribes and control of the media. Success breeds success and it is harder for the people to dig out of this whole. Unfortunately, the post war middle class has become an historical aberration and the struggles of previous generations lost. FDR was called a traitor to his class. The elite have been working for this day since the 1930's. The surprise is how many middle class people have historical amnesia and agitate for the demise of middle class institutions rather than taking them back to meet their needs. Social security is next. Read Charles Dickens for your future.
  • 9 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 3 users disliked this comment
    Jo Sat Aug 14, 2010 11:19 pm PDT Report Abuse
    What amazes me is the inability of the American people to see that, as flawed and passive as the Democrats might be in their ill-fated attempt to be bipartisan and fair, they at least promote legislation that serves the needs of the working and middle classes. The Republicans care only about profits, not people, and if somebody can't see that, well, de-nial is not just a river in Egypt.
  • A Yahoo! User
    7 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 2 users disliked this comment
    A Yahoo! User Sat Aug 14, 2010 08:15 pm PDT Report Abuse
    This has nothing to do with god. This has to do with decline of unions, selfishness and greed, stupidity and arrogance, the Republican party, individualism vs. collective caring, repeal of estate tax, etc. Wake up, America.

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