Some Questions on Income Disparity

[Bill Mattocks]

I hear and read a lot about how the 'middle class is disappearing' and the conclusion that 'this is a bad thing'. So I have two basic questions.

1) Is the Middle Class actually disappearing?

2) If true, is this necessarily a bad thing?

I recognize that no matter how one represents what the 'middle class' is, the growth of real income (adjusted for inflation and cost-of-living) since WWII has slowed considerably with reference to the growth of real income to those termed the 'ultra-rich'. But that statement does not in itself imply that a correction is either needed or desired. I read a lot of arguments that capture the condition and demand a 'fix' without describing what the problem is. In other words, yes, the rich are getting richer faster than the middle class is getting richer. And that is bad because?

It seems to me that a more valid statement from which one can develop a hypothesis of a problem and then a plan of action to resolve is it this; is the class in poverty increasing?

There is no doubt that poverty is up in recent years:

http://www.census.gov/newsroom/releases/archives/income_wealth/cb10-144.html

The nation's official poverty rate in 2009 was 14.3 percent, up from 13.2 percent in 2008 — the second statistically significant annual increase in the poverty rate since 2004. There were 43.6 million people in poverty in 2009, up from 39.8 million in 2008 — the third consecutive annual increase.

However, the same study found that...

The poverty rate in 2009 was the highest since 1994, but was 8.1 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available. The number of people in poverty in 2009 is the largest number in the 51 years for which poverty estimates are available.

This would seem to indicate to me that since 1959, poverty rates have declined 8% even relative to today's numbers. Taken strictly as a yardstick measurement, if 8% fewer of us live in poverty, then one must assume that those have joined the middle or upper classes financially. What else could this mean?

Put another way, if the middle class is indeed shrinking, where are they going? If the poverty level is increasing at the same time, one can argue that they are falling from middle class into poverty. However, is the upper class growing?

I could not find much information online to support a yes or no answer. I did find this:

http://austrianeconomists.typepad.com/weblog/2009/08/more-evidence-that-were-all-getting-richer.html

But since the data is only as recent as 2006, it does not include the recent recession, and I'm relatively sure that the percentages have changed since that time.

http://freemarketmojo.wordpress.com...shrinking-because-the-upper-class-is-growing/

But this leads me to a curious thought.

If, as it would appear at a glance, that the percentage of people below the poverty line has fallen by 8% since 1959, even including the current recession-caused increase in the numbers of people poverty, and the percentage of people becoming wealthy is increasing (or it was, again prior to the current recession), then it is reasonable to draw two conclusions.

The first is that the 'shrinking middle class' is caused by several things. People getting more wealthy, thus leaving the middle class, and the recession, which has caused an increase in poverty and (I presume) a decrease in those moving from middle class to upper class. However, minus the recession, the trend has been UP and not DOWN.

The second is that real problem is the recession and not the distribution of wealth. In other words, it is not the 1% that need to be attacked, but the recession that needs to be ended.

Is attacking the ultra-rich a valid way to end a recession? I suspect it would not be terribly efficacious.

As an aside, I just want to add once more before this discussion gets going, that I seldom read arguments against the ultra-rich that do not include value judgments about the morality of their wealth; that is, that they "didn't earn it" or that they are otherwise evil, greedy, bad people. If you're planning to introduce those elements as a reason for the income disparity to be changed, I am going to reject your argument as hate-based and not logic-based. Don't tell me how you feel about rich people, tell me why their wealth should be confiscated and what good that will do to the recovery. Thank you.

 

[decepticon]

All I can provide is my own experience. We were previously comfortably middle class. Then we were hanging by our fingernails from the bottom of the middle class. Currently we are sitting (not so pretty) on the top of the lower class heap. But I fear our downward slide may not have ended yet.

To provide a more concrete example, we used to go buy a new car every 5 or 6 years. Brand new, usually a midpriced or even lower priced option. Then we were limited to the loss leaders with no radio or carpeting. Then we found ourselves buying from the used-but-nice market. Now, my husband recently paid $3000 for his most recent Toyota. And we have another car that we paid $1000 for. All the while, the price of gas goes up, the price of groceries goes up, the cost of our utilities goes up, the cost of nearly every single item we buy goes up. However, my husband's income does not go up.

I work hard to be frugal and save as much as I can at every turn. I try to work part time online from home to earn additional income. But I'm not sure how long we will be able to continue on with life as we know it if things continue this way.

So I can't say whether the middle class in general is shrinking and why the numbers aren't showing more people living in poverty. But I can honestly say that I am getting more than a little nervous out here on our little farm. We will not starve, since we have the ability to grow our own food, but I feel that we are being pushed further and further outside of the mainstream economy.

 

[Bill Mattocks]

All I can provide is my own experience. We were previously comfortably middle class. Then we were hanging by our fingernails from the bottom of the middle class. Currently we are sitting (not so pretty) on the top of the lower class heap. But I fear our downward slide may not have ended yet.

To provide a more concrete example, we used to go buy a new car every 5 or 6 years. Brand new, usually a midpriced or even lower priced option. Then we were limited to the loss leaders with no radio or carpeting. Then we found ourselves buying from the used-but-nice market. Now, my husband recently paid $3000 for his most recent Toyota. And we have another car that we paid $1000 for. All the while, the price of gas goes up, the price of groceries goes up, the cost of our utilities goes up, the cost of nearly every single item we buy goes up. However, my husband's income does not go up.

I work hard to be frugal and save as much as I can at every turn. I try to work part time online from home to earn additional income. But I'm not sure how long we will be able to continue on with life as we know it if things continue this way.

So I can't say whether the middle class in general is shrinking and why the numbers aren't showing more people living in poverty. But I can honestly say that I am getting more than a little nervous out here on our little farm. We will not starve, since we have the ability to grow our own food, but I feel that we are being pushed further and further outside of the mainstream economy.

I have no reason to doubt you, and I have great sympathy for you; I hope things improve for you. And I do not mean to belittle your experience, but to look at the system, one must look at the aggregate, not individual cases.

The questions of course are whether or not what is true for you is true for all, and if so, if stripping wealth from the ultra-wealthy will fix it.

 

[Steve]

Specific classes of people are being better protected from the cyclical nature of the economy. The elderly are a perfect example, in large part directly attributable to Social Security. In the early 60's, poverty for seniors overall was in the middle 30%. It's under 10% now. Black senior poverty rate in the mid-60's was over 60%. It's hovering just over 20% now. While these individuals are going to be included in studies on poverty, the remarkable progress America has made in helping these individuals live independently in their old age does not have a bearing on middle class, working families.

Another area to explore is the lower-middle/working poor class. I'd like to know how you define middle class. What does the term mean to you?

It also seems to me to be a little premature. While certainly, there was a spike in income even as late as 2008. Income for many was inflated and quality of life was shown for many to be a house of cards. Over the last 2 or 3 years, that house of cards has crumbled. I think, as we see the statistics come in over the next few years, the "faux" upper class will fade, and as we pull out of the recession, things will settle toward the middle.

I posted a couple of links in some other threads. Bill, did you read those articles? If so, I'd really like to know where you disagree and why. Also, IRS.gov also has tons of statistical information available on income and wealth.

 

[decepticon]

Thanks for the sympathy. I did not mean to complain nor to give the impression that we are suffering or unhappy. We are not. It is what it is.

I understand that one individual case does not always equal the aggregate, but at least in my area, we are considered to be among those who are doing fairly well. There are hundreds who are not getting along as well as we are. The local food pantries are running on empty.

My concern is that it is so easy for the "agregate surveyors" to miss certain segments of the population and thereby underrepresent them in the results. Do they have a system to identify and quantify those who fell off the bottom of the lower class like we did from the middle class? What happens to those who have moved in with relatives because they can no longer afford to maintain a separate residence? What about those who were clinging to their sanity by a thread and who now wander from shelter to shelter - the thread having apparently snapped? (I'm not all that far from where all the wild animals were released when their owner recently committed suicide)

We live in an area where it is not all that unusual for someone to just retreat from society and go hole up in the hills around here. I sincerely doubt they are being counted by anyone.

I wonder whether any of those statistics spinners or bean counters or whoever have any real idea of just how many people do not fill out census forms or get represented on any other lists. Perhaps it is those people who fall off the bottom but leave no easily measurable trace.

 

[Steve]

Bill, I also have to wonder, how is this thread different than your other thread, "The Evil of Being Wealthy?" In both, you seem to be making the same points, and the same presumptions that anyone who disagrees must hate wealth.

 

[JohnEdward]

Bill,

One simple indicator per your inquiry individual vs "aggregate" qualifier is the middle class income doesn't require two incomes to live, much less live comfortably. One measure is amount of disposable income based on a single income. Third your salary. You have a healthy savings, and enough money for retirement and other such investments There is a difference of living "like" middle class and being middle class and often that gets confused. Being "like" middle class is not in the middle class, it is being in a lower income level and trying to live a middle class existence, though coupon clipping, double income, selling one child or a limb, etc. just to save money to meet the minimum financial needs, with very little disposable cash. Where as middle class doesn't need to scrimp and save their salaries pay enough for a comfortable living, a savings, meeting all financial needs, able to make invests, able to deal with inflation. and have a healthy disposable income to a certain level. For example, a doctor would be middle class by today's standards. A nurse isn't but could live "like" middle class, if no kids, and really tightened the purse strings, and still not having all the financial benefits of a true middle class.

There is a grave distinction between those who truly are middle class and those struggling to "live" like middle class. I think many confuse the two on purpose and distort the size of the middle class to seem bigger, just to place more of a tax burden on the middle class the ones who truly pick up the tab.

 

[Bill Mattocks]

Bill, I also have to wonder, how is this thread different than your other thread, "The Evil of Being Wealthy?" In both, you seem to be making the same points, and the same presumptions that anyone who disagrees must hate wealth.

The two threads are not the same; or at least I did not intend them to be. In the first, I asked the question "is merely having wealth evil," since it appears that many use emotional terms and imply immorality to wealth itself when talking about the accumulation of it. In this thread, I am attempting to ask two things. First, is the middle class actually shrinking (and subset of that, if it is, does that mean people are getting richer or poorer) and second, if there is a growing disparity between the rich and the poor, is that, by itself, a bad thing?

I will admit that I am cogitating on some fundamental questions here. I like to get to root causes when I can. If we say that the '1%' are responsible for the misery many of us are experiencing, will removing the wealth from the 1% fix it? And likewise, when we talk about the 'vanishing middle class', is that a) true and if so, then b) is that bad? It seems we tend to describe something and then proceed to how to fix it without explaining in what way it is a problem.

An analogy might be "Gravity is increasing in some parts of the world and decreasing in others! We must stop this inequality!" OK, first question, is the first statement true? Turns out that yes, it is; the earth is becoming more oblate - that is, it is getting fatter at the equator. Second question, is that a bad thing? The answer appears to be that we don't know. It's happening, but what does it mean to us? And that of course casts doubt on the statement that we must do something about it. Seems we're going from A to C without stopping at B first. I'm just trying to go back and see if the problem a) is a problem and b) if it needs fixing. Never mind if the proposed solution c) will fix it.

 

[Bill Mattocks]

One simple indicator per your inquiry individual vs "aggregate" qualifier is the middle class income doesn't require two incomes to live, much less live comfortably. One measure is amount of disposable income based on a single income. Third your salary. You have a healthy savings, and enough money for retirement and other such investments There is a difference of living "like" middle class and being middle class and often that gets confused. Being "like" middle class is not in the middle class, it is being in a lower income level and trying to live a middle class existence, though coupon clipping, double income, selling one child or a limb, etc. just to save money to meet the minimum financial needs, with very little disposable cash. Where as middle class doesn't need to scrimp and save their salaries pay enough for a comfortable living, a savings, meeting all financial needs, able to make invests, able to deal with inflation. and have a healthy disposable income to a certain level. For example, a doctor would be middle class by today's standards. A nurse isn't but could live "like" middle class, if no kids, and really tightened the purse strings, and still not having all the financial benefits of a true middle class.

There is a grave distinction between those who truly are middle class and those struggling to "live" like middle class. I think many confuse the two on purpose and distort the size of the middle class to seem bigger, just to place more of a tax burden on the middle class the ones who truly pick up the tab.

I agree that it is difficult get get any agreement on what is and is not the 'middle class'. As you pointed out (and others have as well), a single person living on 30K a year is in a different class based on their standard of living than a family of four living on that same 30K a year.

However, the data I'm looking at are objective in the sense that they are strictly looking at inflation-indexed dollars. I realize that since even the definition of income and family has changed radically in many ways, even this is not objective; but it may be the best yardstick we have.

Basically, you can draw the line between lower class, middle class, and upper class anywhere you like. The question is where income is going relative to those lines, no matter where you place them.

I also noted, but decided to leave out, some comments I read while reading online that some statisticians have noted that the biggest increase in the 'disparity' between the richest 1% and everyone else has been in Silicon Valley and NYC. If you leave out those numbers, the increase in the rest of the country is remarkably consistent. In other words, income rises and falls together and is NOT more disparate if you take out the Information-Age based new wealthy. Interesting stuff, eh?

 

[Bill Mattocks]

Another area to explore is the lower-middle/working poor class. I'd like to know how you define middle class. What does the term mean to you?

I don't know, because it's not an objective marker. What's middle class? I presume that I've been middle class all my life; from my earliest days earning $9K per year in the military (yes, that's $9,000 per year) to the present, which is down %30 from my personal high-water mark in 2004. By that I mean that I've always had enough to pay my housing, food, necessary expenses, and had a small amount of disposable income left over each paycheck. I would tend to believe that 'lower class' means you either cannot meet your required expenses, or you have zero disposable income. I don't know what that number is, and I suspect it's radically different based on people, regions, family size, financial obligations, and so on.

But that's kind of a side-track, isn't it? The point being hurled about is that income disparity is increasing, and the (mostly unstated) premise is that it is because the middle class is vanishing and becoming poor. While the number below the poverty line (not my definition, but the one the government appears to be using) is increasing, it's still down 8% from 1959. One must ask therefore if the middle class really is vanishing, and if so, does it mean they are all getting poorer, or are they getting richer? I suspect some of both, eh? And taken as a whole, does this indict the system that has led us here.

When someone says "There is an imbalance," I must ask what the imbalance is first. If I agree that there is in fact an imbalance, the next question is, to put it rather bluntly, "so what?" An imbalance by itself does not imply that something is broken and needs to be fixed.

I posted a couple of links in some other threads. Bill, did you read those articles? If so, I'd really like to know where you disagree and why. Also, IRS.gov also has tons of statistical information available on income and wealth.

Not sure. I've stayed out of some threads as they have become caustic.

 

[JohnEdward]

I agree that it is difficult get get any agreement on what is and is not the 'middle class'. As you pointed out (and others have as well), a single person living on 30K a year is in a different class based on their standard of living than a family of four living on that same 30K a year.

However, the data I'm looking at are objective in the sense that they are strictly looking at inflation-indexed dollars. I realize that since even the definition of income and family has changed radically in many ways, even this is not objective; but it may be the best yardstick we have.

Basically, you can draw the line between lower class, middle class, and upper class anywhere you like. The question is where income is going relative to those lines, no matter where you place them.

I also noted, but decided to leave out, some comments I read while reading online that some statisticians have noted that the biggest increase in the 'disparity' between the richest 1% and everyone else has been in Silicon Valley and NYC. If you leave out those numbers, the increase in the rest of the country is remarkably consistent. In other words, income rises and falls together and is NOT more disparate if you take out the Information-Age based new wealthy. Interesting stuff, eh?

Hmmm..yes... terms are ambiguous and abstract such as middle class, lower and upper. Old vernacular it was poor, rich and everyone else in between. Terminology isn't the real problem. Yes, back in my day a Doctor wasn't considered middle class, but upper class wealth. Middle management was middle class, and one income was enough. Now I understand what you are seeing, the existence of the "new rich" was brought to our social conscious with a new industry. And in that time there was a boom in wealth. Silicon Valley make many people rich, it was the new gold rush. During that time the middle class was losing ground, and many people had the opportunity to capitalize on that wealth. It was a shot in the arm to both the middle class and the upper class. But that is what it was a shot into a diminishing middle class. Currently, computer technology isn't making people rich as it did, the gold mine is tapped, and people are mining for flakes and not nuggets. But those who do mine enough flakes remind us of the good old days when money was being made. And there are still people who maintained their "Eurekas" and are still wealthily. Then there are those who do become wealthy because of getting lucky in starting their own business etc. That all ways has been and they too move up into the middle and wealthy classes. But that isn't a whole lot of people. I think this is what people are measuring. I don't believe it is enough to constitute a middle class revival. The housing bubble was driven by easily attainable loans. Not by affordability due to income, or by traditional loan approval requirements. This too is another measure of the health and size of the middle class being sickly, because so many people borrowed to buy a home, the bulk of the people buying homes where first time home buyers who would have normally been rejected for a loan. That is because they didn't have the money in the first place. Now, imagine if there was a healthily middle class who by normal qualification standards would qualify for a 15-30 year home loan that instead drove the housing market. If that happened we would have had institutions collapse and all the other ugly things that happened? Would we the tax payer have to bail out the "too big to fail" institutions? That for me is the most accurate indicator of an of yes, to your questions. A middle class is disappearing and it is a bad thing. The question on my mind is will the middle class disappear completely. How bad will that hurt this country...as we can see and I have said so many times before a healthy middle class keeps us from being a modern third world country with all the related problems, where there is a great disparity of wealth.

 

[MA-Caver]

I hear and read a lot about how the 'middle class is disappearing' and the conclusion that 'this is a bad thing'. So I have two basic questions.

1) Is the Middle Class actually disappearing?

2) If true, is this necessarily a bad thing?.

I dunno if it's actually disappearing. From my standpoint it's dwindling but not fading away. You can drive 5-15 minutes outside any major city and find yourself in sprawling middle class neighborhoods. Ironically the further out you go the better the neighborhoods because it not as old. As long as companies have a need for middle level management positions, supervisors ... people who generally get better pay than the laborer/office worker of the company... you're going to have middle class.
From what I've seen there are three levels of middle class people. Lower Middle and Upper... all based on income variances ranging from $15-20K to upwards of $100K in annual salaries (and all points in between). As people move into higher salary brackets they tend to move into better neighborhoods when they have the money saved up or their banks say that they can afford a bigger house/mortgage.

Is it a bad thing? Well basically yeah. Without the middle class worker a lot of things can get bogged down because there's no middle-level management (supervisors, foremen, et al) to help run the labor portion of the business. Higher officers, i.e. Management which include, area, regional, divisional etc. are having to cover larger areas or more stores which take up a lot of time. But their income is in the "upper-middle class" range ($75-100K + ).
Also losing the middle class takes away the incentive for the "lower-class" people to aspire to. There are many who know if they work long enough, hard-enough in a company that promotions DO take place... granted it could be a long slow process but sometimes depending upon a company's growth they can rapidly advance. It's happened to me before so I know it's an achievable position. So you have a group of people who know the so-called reality of hard-work and the "fruits" their labors can produce. Better homes, better cars, better lifestyles.
Of the lower class I tend to put them into two social groups. The first being upper lower class which means the ones who are the laborers, the workers just starting out but still living in that crappy neighborhood where they just might wake up one morning and find their car sitting on cinderblocks and the wheels/tires are gone and now they have to take the bus to work everyday until they scrimp and save to buy new tires/wheels. The other are the "true" lower class which have stolen the tires. But they're not all criminals of course, just people with hard-luck lives. Poor work history, bad circumstances at home, dispair all of that and they're struggling. A majority of them would LIKE to work... if they're given the breaks to get them.
Oh you gotta make your own breaks. Well yeah, I would tend to agree with that. Making your own breaks is doable in every sense of the phrase... if there's a foot-hold to step up on.
What is the foothold pray tell? For starters, money or at least bus passes to travel to from home-job interview(s) -home, or if applicable gas money for that old klunker that they got, food for them and/or their families, ability to pay rent until the first several paychecks come... because the bills... they WILL add up over time. Well, if you've ever had it all and lost it and then having to start all over again from scratch (including scrounging up the materials to have scratch to begin with)... you know what I mean.

(wow all that without a single complaint about the ultra-rich and the vast wealth that they could donate to charity to help the lower class achieve their dream of obtaining middle class status. :uhyeah:

 

[JohnEdward]

A simple means to regenerating the middle class is in the hands of mega corporations, and the government. It is not secret on how to do that, it is a matter if they want to or not.

I forgot to make clear when I spoke Silicon Valley making people rich it wasn't enough to sustain a healthy middle class as manufacturing industry and other industries where being shipped over seas, or dying off. Lots of people where losing incomes as well, during the Silicon Valley boom. When I referred to middle class it is a sustainable middle class. And not slight upward turn in a downward trend. The field of Engineers use to be a middle class gig for decades, they are not anymore. Again another support for what are accurate indicators of deteriorating middle class. I think some have not live long enough or where old enough to remember how large the middle class was, and the positive effect it had on the economy. Or watched the change in income disparity. Allot of people don't want that known. Because there has been a great shift in wealth that has caused a blaring income disparity in comparison.

 

[Steve]

Whether you agree or not, I think you'll enjoy reading this article. I did. It's long, but covers a lot of ground. I posted a couple of other articles, as well, but they basically just reinforce the same points.

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

 

[Bill Mattocks]

Whether you agree or not, I think you'll enjoy reading this article. I did. It's long, but covers a lot of ground. I posted a couple of other articles, as well, but they basically just reinforce the same points.

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

Sigh. Yes. And no.

This points to a set of facts. It doesn't *say* anything. CEO's, for example, receive a very high multiple of pay compared to workers. Yes. I get it. And this means what? We are left with the conclusion that it is 'bad', but why is it bad? The closest I could find in the article was that come companies are worried that CEO's are losing respect in the eyes of the public. Uh, right. OK. That's why it is bad?

It's a perfect example of what I'm talking about, though. Here's a startling set of information. Great, thanks. Now what does that mean? Well, it's fuel for arguments to dismantle the 1%, or to NOT dismantle the 1% I guess, depending on how you read it. But where are the facts that lead to the conclusion?

It's like saying baseball players are overpaid. OK, perhaps they are. But now what? Is that bad? If it is bad, does that mean we have to do something about it? And if we have to do something about it, what would that something be? All I get is a straight line from A (baseball players are overpaid) to C (and we must put a stop to that). We've blown right through B, why is it bad.

 

[Steve]

Sigh. Yes. And no.

This points to a set of facts. It doesn't *say* anything. CEO's, for example, receive a very high multiple of pay compared to workers. Yes. I get it. And this means what? We are left with the conclusion that it is 'bad', but why is it bad? The closest I could find in the article was that come companies are worried that CEO's are losing respect in the eyes of the public. Uh, right. OK. That's why it is bad?

It's a perfect example of what I'm talking about, though. Here's a startling set of information. Great, thanks. Now what does that mean? Well, it's fuel for arguments to dismantle the 1%, or to NOT dismantle the 1% I guess, depending on how you read it. But where are the facts that lead to the conclusion?

It's like saying baseball players are overpaid. OK, perhaps they are. But now what? Is that bad? If it is bad, does that mean we have to do something about it? And if we have to do something about it, what would that something be? All I get is a straight line from A (baseball players are overpaid) to C (and we must put a stop to that). We've blown right through B, why is it bad.

You read that entire article that fast??? Damn. Took me a long time to get through it all and actually process what I'd read.

And personally, I appreciate the facts that the article brings up. Facts are a refreshing change of pace.

I'll freely admit I have no idea what you're driving at. You started off by asserting that the shrinking middle class is actually a growing upper class. But when I give you an article you accept as factual which outlines in exhaustive detail the existing and growing disparity between the upper 20% and everyone else, and the upper 1% and the next 19%, which effectively debunks your theory that the upper class is growing, you tell me that this isn't what you're looking for.

You win. Whatever you're driving at, I don't get it.

 

[Bill Mattocks]

You read that entire article that fast??? Damn. Took me a long time to get through it all and actually process what I'd read.

And personally, I appreciate the facts that the article brings up. Facts are a refreshing change of pace.

I like facts too. But facts are not conclusions. There is growing disparity between rich and poor is a fact. What does it mean? That is not stated. Many who read the fact draw their own conclusion, but how did they get there?

I'll freely admit I have no idea what you're driving at.

Sorry, I'll try to restate.

You started off by asserting that the shrinking middle class is actually a growing upper class.

Not exactly. What I said was that my first question when confronted with the statement that the middle class is shrinking is to ask if this is true. Keeping in mind the axiom that if a person leaves the middle class, that means they either went up or down, I tried to determine if it is true that those leaving the middle class are going down. It would appear that the trend since 2008 is down (the percentage of those in poverty are growing, therefore the middle class is shrinking). However, it would at the same time appear that the middle class is growing based on the longer trend from 1959 to the present. So the overall trend is up; the most recent trend is down.

I also asked (and asked myself) if the shrinking poverty level since 1959 means that the upper class is growing as well as the middle class. I don't have any answer for that; just some anecdotal evidence, which I posted some links to. Not enough to draw a conclusion, but food for thought.

But when I give you an article you accept as factual which outlines in exhaustive detail the existing and growing disparity between the upper 20% and everyone else, and the upper 1% and the next 19%, which effectively debunks your theory that the upper class is growing, you tell me that this isn't what you're looking for.

Ah, I see. Yes, it is good information for that. Sorry, I misunderstood you. What it does not give me is any reason why it is objectively a bad thing.

You win. Whatever you're driving at, I don't get it.

I'm not actually 'driving' so much at anything. I'm not hiding a dagger in the folds of my robe, waiting for you to draw near so I can spring my trap.

I am pointing out that there is a common belief, to use vernacular, that the rich are too damned rich AND that it's a bad thing AND that it's the cause of our misery AND that we therefore ought to do something about it (presumably by raising taxes, fees, or just plain taking it away from them).

Now, what I'm saying and asking is this:

1) Is it true that the rich are growing richer while the poor grow poorer?
2) If true, is it a bad thing?
3) If it is a bad thing, is it the reason we are in the economic condition we are in?
4) If it is the cause, will stripping the '1%' of that wealth fix the problem?

All I seem to get in return is proof that the rich are indeed growing richer. OK, if that's true, then it's true. Now about the rest of it....

 

[WC_lun]

The rich getting richer really isn't the issue. However, the number if poor increasing and the number of middle class shrinking is a "bad thing." Why? Well it is the economy. The middle class is the engine that drives our economy. The poor do not have the disposable income to influence the economy. The rich do not spend enough of thier incomes to effect the economy. Shrink the middle class and you decrease the money flow into the economy and you decrease the economy's ability to ride out volatile circumstances. Add to that, the middle class actually pays most of the taxes, so we are also facing a decreased tax base, which of course affects many, many, things. So yeah, in my opinion that is a bad thing for our country as a whole.

 

[Bill Mattocks]

The rich getting richer really isn't the issue. However, the number if poor increasing and the number of middle class shrinking is a "bad thing." Why? Well it is the economy. The middle class is the engine that drives our economy. The poor do not have the disposable income to influence the economy. The rich do not spend enough of thier incomes to effect the economy. Shrink the middle class and you decrease the money flow into the economy and you decrease the economy's ability to ride out volatile circumstances. Add to that, the middle class actually pays most of the taxes, so we are also facing a decreased tax base, which of course affects many, many, things. So yeah, in my opinion that is a bad thing for our country as a whole.

I don't think I would argue with you that any economy with a growing poverty rate and a shrinking middle class is 'bad'. It doesn't take an economics degree (which I certainly don't have, I struggle understand the basics of economics) to understand that if people can't pay their bills, they won't spend money on extras, and the economy as a whole must suffer. I completely get that.

But, if the census data are to be believed, the poverty rate has decreased since 1959, not increased. It has, of course, increased since 2008, but relative to 1959, it is still even now down 8%. All this while the 'disparity' between the very rich and the very poor has increased eleventy gazillion times. What can we make of this? (I'm not suggesting I know the answer, I do not).

And let us for a moment contemplate the concept that too many wealthy people is a bad thing. This would seem to fly in the face of the basic traditional American concepts of working hard, becoming educated, struggling, and eventually (with luck, etc) becoming wealthy. If having too many wealthy is actually damaging to the economy, it would seem that the American Dream as such is shattered; we must instead struggle to rise from poverty, but then stop right there, while we are still an effective gear in the engine of commerce and the economy. Imagine telling one's children to try hard to succeed - but not too hard - because too much success would be a bad thing. Kind of boggle the mind, right there.

 

[granfire]

Well, it's called American Dream.
However, only a few will make it to that stage, most just surpass their parents in standard of living, and thus fullfill the dream.

Also, the level of poverty is relative.
Officials have a cutoff number for poverty. I think it's the same across the country and does not take into account the differences of standard in different regions.
Also, if you make one dollar more than the magic number, you are no longer considered poor. Does not buy you much at the grocery store, but hey, it's good to know you are not really poor.

Also, any given living standard is relative. If you always had what you got, you won't know the difference. If you had less, you are doing better, but making due with less than what you have is being poor.