The Middle Class Is Broke

Professor Joseph Stiglitz at Columbia University  (Photo credit: Wikipedia)

One of the most important stories in the U.S. economy these days is the rise of extreme inequality. Over the past 30 years, a larger and larger portion of America's income growth has gone to those in the top 10% of incomes, and especially those in the top 1%. This is a major change from the prior 60 years, in which the top 10% and the bottom 90% shared in the income gains.

A stark and startling example of this trend is the fact that, adjusted for inflation, "average hourly earnings" in this country have not increased in 50 years.

[Related: The 'American Dream' Is a Myth: Joseph Stiglitz on 'The Price of Inequality']

A recent Pew study confirms that America's middle class has recently experienced a "lost decade."

Since 2000, the Pew says, "the middle class has shrunk in size, fallen backward in income and wealth, and shed some—but by no means all—of its characteristic faith in the future." Pew cites statistics showing that middle class earnings and net worth have plummeted since the mid-2000s and that about 85% of the middle class say it is harder to maintain their standard of living than it was 10 years ago.

The reason the decline of the middle class is important is not just about fairness. It's about the health of the economy as a whole. ... Continue to read.

Related articles

• The Lost Decade of the Middle Class | Pew Social & Demographic Trends (artstarzz.wordpress.com)
• Pew Study: The Economy is lagging because the middle class is broke (finance.yahoo.com)
• Pew: Middle Class Poorer, Earning Less And Shrinking (npr.org)