The Middle-Class Squeeze
posted by Louise Auerhahn
Thursday, April 17, 2008, at 4:10 PM
A recently released study of inequality shows that nearly all the benefits of California's growth since the late 1990s have gone to just one group: the wealthy.
The "Pulling Apart" study from the Economic Policy Institute analyzed income gains state-by-state for low, middle, and upper-income Americans. Between the late 1990s and the mid-2000s, in California:
The gap between California's middle class families and the state's wealthiest residents is now the 3rd largest of any state in the country. (We can congratulate ourselves on providing a fairer shake for the middle class than Oklahoma or Mississippi, which were ranked #1 and #2.)(Continued...)
Because it does not include capital gains, this analysis actually underestimates the gap between the superrich and everyone else.
How do middle class Americans view this decade's economic shifts? In a recent poll of the U.S. middle class, 54% of respondents said that in the past five years, they had made no financial progress or had fallen behind. "Middle class" for this poll was self-defined by the respondents, 53% of whom identified as middle class (another 19% identified as lower-middle and 19% as upper-middle).
The Pew Research Center has been asking this survey question -- "Are you better off now than you were five years ago?" -- since 1964. This year, more middle class Americans said they were not better off than at any point in the past fifty years. An ever higher proportion, 79%, said that it's become more difficult for middle-class families to maintain their standard of living.
The "Pulling Apart" study from the Economic Policy Institute analyzed income gains state-by-state for low, middle, and upper-income Americans. Between the late 1990s and the mid-2000s, in California:- The poorest fifth of families (with average income of $18,312) saw no significant income growth.
- The middle fifth of families (with average income of $50,981) grew by just $1,889, or roughly $315 per year.
- Average income for the highest-income fifth of families grew by $16,772. Most of this growth was at the very top of the scale; for the top 5% (with average income of $243,386), average income grew by $41,988.
The gap between California's middle class families and the state's wealthiest residents is now the 3rd largest of any state in the country. (We can congratulate ourselves on providing a fairer shake for the middle class than Oklahoma or Mississippi, which were ranked #1 and #2.)(Continued...)
Because it does not include capital gains, this analysis actually underestimates the gap between the superrich and everyone else.
How do middle class Americans view this decade's economic shifts? In a recent poll of the U.S. middle class, 54% of respondents said that in the past five years, they had made no financial progress or had fallen behind. "Middle class" for this poll was self-defined by the respondents, 53% of whom identified as middle class (another 19% identified as lower-middle and 19% as upper-middle).
The Pew Research Center has been asking this survey question -- "Are you better off now than you were five years ago?" -- since 1964. This year, more middle class Americans said they were not better off than at any point in the past fifty years. An ever higher proportion, 79%, said that it's become more difficult for middle-class families to maintain their standard of living.
Labels: income, inequality, middle class, opportunity, poverty
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