The Middle Class is Dying

The middle class is dying.

Here is the reality:

The rich are getting richer

The poor are getting poorer

Let's first understand what is middle class?

You may not realise this but the definition of the middle class has changed into something very different. For many years the term middle class is someone who reached a version of the American dream. 

This includes:

• A stable income
• A house with white picket fences 
• Some sense of financial security for the future

Perhaps you are old enough to remember The Cosby Show, a traditional family with a middle-class life. Yes, they had problems, but they were Chevrolet problems, for Chevrolet families, who lived in Chevrolet neighbourhoods and had Chevrolet paychecks.

However, now times have changed.

The middle class are those that:

• Can set up automatic payments to pay off their debt.
• Usually well-educated but struggling to pay rent and daily living expenses.

The idea of owning a home, being financially stable and having a sense of financial security is more of a lofty dream than the next stage in life. Many middle classes are only a few paychecks away from going bankrupt and living off the streets. Most of them put on a facade of being able to buy expensive things and vacations hoping their neighbours won't find out the truth about them even though the neighbour is probably going through the exact same thing.

Here is the snippet from the Pews Research Center of median household income in 2018. U.S. median household income had incomes ranging from $48,500 to $145,500. That's quite a big range for the middle class depending on if you are in the upper range or lower range of the middle class.

If you want to find out if you are a lower, middle or upper class, you can use the Pews Research Center's calculator here:

• Income calculator- Class

Although more people are taking $100,000 many of them consider themselves working-class rather than affluent.

How many Americans are middle class?

Why the middle class is dying?

Here are the numbers

• In 1971: 61% middles class
• In 2016: 52% middle class

Baby boomers: 59% are considered as middle class in their 20's.

Millennials: 53% are considered middle class in their 20's.

The middle-class numbers have declined since 1971. A portion of it has joined the upper or lower class.

Let's crunch the numbers of variance movement from the year 2010 to the year 2016 (6 years difference):

• Upper class: 9.1% 
• Middle class: 6%
• Lower class: 4.8%

Now let's crunch the numbers of variance movement from the year 2000 to the year 2016 (16 years difference):

• Upper class: 2.3%
• Middle class: 0.5%
• Lower class: -5%

Now, there is no exact way to pinpoint the reason for the variance movements. But there are some possible reasons that we can all agree contribute to this variance in the wage gap between the different income classes.

For most U.S. workers, real wages have barely budged in decades

Despite the wage growth, today's real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago. Most of it has flowed to the highest-paid tier of workers.

• After adjusting for inflation, however, today's average hourly wage has just about the same purchasing power it did in 1978.
• The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today.

Conclusion

We've been sold on the old Americans our parents had that we believe are still applicable although that may no longer be the case.

If we work, go to college, get a good job, and follow the rules, the system will make sure that we are financially secure for the future. We will be able to have a good home, financial security and a decent life.

However, the old definition and narrative of the middle class are no longer true. Although it will be challenging to progress to an upper class, it is not impossible. You just need to reinvent yourself and take action. When you do the possibilities that you can achieve are endless.