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The "Middle Class" is shrinking FAST. It was allegedly just over 60%. Now?

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JanMichael Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 05:57 PM
Original message
The "Middle Class" is shrinking FAST. It was allegedly just over 60%. Now?
Edited on Wed Feb-23-05 05:59 PM by JanMichael
52-54%?

At least if one uses the method of one-half of Median to twice Median.

The 2003 Inflation Adjusted Median Household Income was $43,318. The NonAdjusted Median was $58,639.

Before you start barking that these are too high remember that Americans have one of the highest two-income spouse rates AND the highest GINI Ratio so the Top PULLS the Median up.

If you use the $43,318 Median the "Middle Class" is approximately 53.6% of all Households, with the bottom at $21,073, and the top at $86,062.00.

If you use the higher $58,639 the "Middle Class" is around 52.3% with the bottom at $31,019, and the top at around $118,880.

I've extracted the numbers from the 2003 Household Income Report which the Economic Policy Institute (EPI) reviews here.

At this rate we'll be like Argentina in just a few short years with a decimated Middle Class, VIVA GENERALISSIMO EL BUSHO!!!

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Eric J in MN Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:00 PM
Response to Original message
1. In the Middle Ages, when most people were peasants,
wouldn't about 90 percent of the European population have between 1/2 and twice the median?

I don't understand that as a definition of middle class.
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JanMichael Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:02 PM
Response to Reply #1
3. Don't ask me, it's a common method.
I suppose we could use smoked salmon to determine these things but I'd eat it before I finished the math.
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Cleita Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:28 PM
Response to Reply #1
8. Peasants were serfs and were bound to the land
meaning that they worked for a lord who owned the land they worked on exchange for a place to erect a hovel. A good lord looked after his peasants and they fared reasonably well, and a bad one or incompetent one caused the lower classes a lot of grief. Most fiefs were self-sufficient, meaning they grew their own food and made their own goods for their needs. There was always a small merchant class and guilds of craftsmen in the towns whom you could call middle-class, but they really didn't come into a powerful class until the Renaissance.
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porphyrian Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:01 PM
Response to Original message
2. Guess which class is the biggest and fastest growing... - n/t
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SoCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:03 PM
Response to Original message
4. A large, educated middle class is no benefit to the rich and powerful
They do not like to share, and consider EVERYTHING, theirs :(

As the middle class grew, they saw the handwriting on the wall, and had the power to "correct" it :(
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EVDebs Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:04 PM
Response to Original message
5. When the richest 1% (those making $3 million +) get tax cuts while
the middle class, or 'the other 99%' get the shaft, you have the makings of a revolution. 'Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else', by David Cay Johnston, should be required reading in the USA right now.

Chapters 7 and 8 show we are subsidizing the richest 1 and 1/2% along with the globalizing multinational corporations who outsource jobs and capital overseas, leaving Joe Sixpack to pick up the tab ! With everyone who makes less than $3 million the 'suckers' in this tax system game, the Republicans have played us for fools in order to pay for foreign adventures in Iraq and taxcuts for those in an economy that, as Edward Wolff puts it, is Top Heavy.

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JanMichael Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 08:08 PM
Response to Reply #5
21. I'll look that book up.
Thanks for the reccomendation.
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EVDebs Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 08:19 PM
Response to Reply #21
22. Also see Kevin Phillip's "Wealth and Democracy" with the quote by
Louis Brandeis 'We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both'

Then look into the concentration of wealth in the US
http://www.osjspm.org/101_wealth.htm#3

How much longer can that last ?
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Career Prole Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:16 PM
Response to Original message
6. Shrub's said all along that class size reduction
was a goal of No Child Left Behind. I guess he's "accomplished another mission".
:eyes:

"Pssst! You're supposed to say middle school classes, sir!"
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Stop_the_War Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:18 PM
Response to Original message
7. What percent is "lower class"?
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JanMichael Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 07:37 PM
Response to Reply #7
18. 24% and 35% or there about.
These are all rough numbers but I think they're good for waking up class unconcious America.
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earth mom Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:31 PM
Response to Original message
9. * and Co want to turn this country into a third world country
that IS their plan. Many people in the middle class are fast becoming the working poor class-just look at declining wages, and the death of unions. Most people in this country are just too damn complacent, comfortable and oblivious to care. They ONLY care when it happens to them, which no doubt it will in the near future, and by then it will be too late...
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ultraist Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:34 PM
Response to Original message
10. The median income has decreased
Edited on Wed Feb-23-05 06:48 PM by ultraist
How did you come up with that definition for middle class? Generally, income stratas are broken into quintiles.
21k is not middle class, it's lower class.

http://www.census.gov/prod/2003pubs/p60-221.pdf
Definition of income
Quintiles
Gini index
1. Money income excluding realized
capital gains (losses) (MI) . . . . . . . .
Lowest Second Third Fourth Highest
Lowest 2001/2: 3.5 3.4
Second 2001/2: 8.8 8.8
Third 2001/2: 14.5 14.9
Fourth: 2001/2: 23.1 23.2
Highest 2001/2: 50.1 49.6

Ginni index: 0.450 0.448

http://www.census.gov/prod/2003pubs/p60-221.pdf

Percent distribution income
Total
Poverty
3.2% Under $5,000

5.9% $5,000 to $9,999

7.0% $10,000 to $14,999

Lower Income

13.2% $15,000 to $24,999

12.3% $25,000 to $34,999

Middle Class

15.1% $35,000 to $49,999

18.3% $50,000 to $74,999

Upper Class

11% $75,000 to $99,999

14.1% $100,000
and over
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JanMichael Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:39 PM
Response to Reply #10
11. Here:
"The middle-earning group of households, defined as those with income
from half to twice the median, shrunk to 60.7% in 2002 from 68.0% in
1979."

Found here.

I didn't make it up if that's what you're insinuating.

Basically if you don't like it crunch your own numbers.

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ultraist Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 06:43 PM
Response to Reply #11
12. I didn't say you made it up
But there are different definitions for middle class depending on which way the economist wants to sway the argument.

That seems like a broad sweep of middle class to include what many consider lower income.
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JanMichael Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 07:05 PM
Response to Reply #12
13. There's no certified "one way". But if we're using Income Distribution...
...Tables then it's a good approximation.

A quick search found this:

"There's no standard definition of "middle class," so we looked at households with pre-tax income of between $25,000 and $75,000 -- a group occupying roughly the middle half of the Census income distribution tables. As we noted before, that group grew smaller during the economic recession of 2001 and the initially slow recovery of 2002. Now the new Census figures indicate it continued to decline in 2003, and while this time some of the middle group were moving up , a larger portion were moving down."

this is from Fact Check and found here.

The problem of course with "Household Income" is that a "Household" can be from one individual on up. But generally speaking as a calculating tool, not necessarily for outputs but relationships, they're pretty helpful IMO.
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ultraist Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 07:35 PM
Response to Reply #13
16. Ah...I see , thanks for the info
A portion are moving down and a portion of the lower class has fallen into poverty. 1.3 million people fell into poverty last year. This was the first increase in the poverty rate we have had a long time.

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Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 07:09 PM
Response to Original message
14. You're not taking into account that the poverty formula
is seriously out of date. It assumes that a family of four spends about a third of its income, or $6,000 a year on food, meaning the poeverty level is $18,000 for a family of four.

Well, lo and behold, food has not inflated as fast as housing, healthcare, transportaion, fuel, clothing, and everything else, so that average family now only spends one sixth of its income on food, the same $6,000 of a market basket of staples, and that means the real poverty level for a family of four is $36,000 per year.

That is awfully close to our median wage folks, and that's the kind of thing that the Democratic party needs to address. Not only has the middle class been thrust into the working class, the working class is now living in real poverty. Poverty, according to the old formula, may now be classified as destitution, since it doesn't afford subsistence.
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ultraist Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 07:37 PM
Response to Reply #14
17. I agree, the FPL is too low---it's outdated and unrealistic
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JanMichael Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 07:32 PM
Response to Original message
15. Instead of the EPI ratio here's another one.
Edited on Wed Feb-23-05 07:38 PM by JanMichael
From this report...

"A second meaning of middle class is an economic one. On this
definition, being middle class is having a middle-class standard
of living or having an income level that is somewhere in the
middle of the income distribution. Virtually all empirical
studies in economics have all taken this route and have examined
either the percentage of income going to the middle income
quintiles or middle 60% of the population (Levy 1988), or some
income space around the median level of income (Thurow 1985, 1987;
Blackburn & Bloom 1985; Horrigan & Haugen 1988; Davis & Huston
1992). For example, Thurow (1985) defines the middle class as any
household with 75 percent to 125 percent of median household
income
, a definition which has been used in a large number of
empirical studies.

Let's see what happens.

The 2003 Inflation Adjusted Median Household Income was $43,318. The NonAdjusted Median was $58,639.

If you use the $43,318 Median the "Middle Class" is approximately 23.6% of all Households, with the bottom at $32,488, and the top at $54,147.

If you use the higher $58,639 the "Middle Class" is around 24.3% with the bottom at $43,988, and the top at around $73,313.
===========================================================

Since I haven't done this for 2002 down I really don't know what it means.

I can imagine it's shrinking too but we already know that from the one-half/double equation...
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ultraist Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 07:41 PM
Response to Reply #15
19. Middle class
Edited on Wed Feb-23-05 07:47 PM by ultraist
Middle Class according to that definition is:
Lower middle Class $32,488
Median $43,300
Upper Middle Class $73,313

That's pretty much where I put it based on USCB quintiles:

Middle Class

15.1% $35,000 to $49,999

18.3% $50,000 to $74,999

Approx 33% of the population.

41.6 % of the population is in the lower income or poverty bracket: less than $35,000.

That is simply WRONG. 41.6% are really struggling.
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JanMichael Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 07:49 PM
Response to Reply #19
20. The problem is that the $73,313 number comes from the $58,639 Median.
Edited on Wed Feb-23-05 07:50 PM by JanMichael
These are all just ratios. The key is to compare them to different years which is what EPI did so I used their calculation.

Personally I think the 50% Median is too low as is the 125% Median.

Maybe 75% and 200% is the most realistic which puts the bottom Middle at $32,475 and the high Middle at $86,600.

I'll run that ratio over the 1999-2003 period tomorrow and see what happens.
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ultraist Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 08:39 PM
Response to Reply #20
23. Defining the bourgeoisie
I think 86k is lower upper class.

This survey puts middle class at generally what the USCB does. Granted, this article is slightly outdated, but wages have not increased in the last year, in fact the median has decreased.

http://lubbock.hiringnetwork.com/common/article88.html

If you ask the average American to classify him or herself, they're most likely to say that they're "middle class." The vast majority of Americans will willingly accept that title, but obviously, mathematically, only about 20% of us can be middle class if you divide things up in the range of poor or near poor, lower middle class, middle class, upper class and rich to near rich.

A recent nationwide survey by the Gallop poll and CNN/USA Today, found that, by income, the average middle class household earns around $40,000 total in income, the lowest bracket covers no earnings at all up to about $17,000-- the lower class definition by income is about $17,000 to $31,000. Middle class, by this survey is around $31,000 to $49,000, upper middle class from $49,000 to $76,000 and that top 20% bracket, over $76,000. Interestingly enough, this survey found that middle class households tend to be clustered right here in the middle west as well as the east and west coast.

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JanMichael Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-23-05 08:57 PM
Response to Reply #23
24. Top 20% is $85,000 and up in 2003.
Edited on Wed Feb-23-05 08:59 PM by JanMichael
So the cutoff is right where I had it. 85k is the high end of the Middle class if one wants to use that Upper 20% Rich catagory.

All of the computations that I'm doing are off of excel, and the tables, so it's easier to just go with the 75-200% of Inflation Adjusted Median.

Yes that makes it 86k but for the purposes of comparing fiscal years the round numbered percentages are best. Shaving off a percent or two isn't clean or neat.
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ultraist Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Feb-24-05 12:30 AM
Response to Reply #24
25. Yes, this USCB 2003 report does show it at $86,900
Edited on Thu Feb-24-05 12:33 AM by ultraist
You are correct.

Interesting that income level of lowest 20% decreased but the income level of the highest 20% increased (starting now at $86,900). More evidence of the fact the poor are getting poorer.

http://www.census.gov/hhes/income/income03/prs04asc.htm...

The income level separating the lowest 20 percent of households from the second 20 percent decreased by 1.9 percent, to about $18,000, while the level separating the fourth 20 percent from the highest 20 percent increased, by 1.1 percent, to about $86,900. A third measure involves the share of aggregate income that each 20 percent of households received. The share of income received by the lowest 20 percent of households declined from 3.5 percent to 3.4 percent, while the shares of the other groups did not change.
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