The Economic Policy Institute has estimated if the middle class had increased their incomes at the same rate the last several decades as the top 1% have, the average middle class family would be making $156,000 a year. Instead, the average is currently $72,036.
(EPI defines the middle class as those in the nation’s 20% to 80% income range, and used data through 2011. It uses Congressional Budget Office data, which includes gains from investments, as well as certain public assistance and employer health insurance.)
This probably comes as no surprise to people who have been paying attention, even if the Economic Policy Institute is somewhat left-leaning. There’s no doubt most middle class workers’ salaries have remained mostly flat for the past 20 years or so. Meanwhile, the 1% have seen gains like few times in history.
If you’re in the 1%, you might not see a problem, other than perhaps having to listen to lots of whining from the middle class. But when productivity increases tremendously as it has, but the middle class don’t enjoy any additional benefits from the improved results of their labor, problems ensue. And those problems are bad for the 1% as well.
There’s somewhat obvious problems. One is that the demand for social support nets become greater. If you’re a 1% right-wing voter, you might be inclined to attempt to cut government support for those social programs, so that at least you don’t have to pay more taxes to support them.
A crashing middle class also means a crashing market for goods and services sold to the middle class. While multi-national corporations may weather such a problem in one country such as the USA, with an economy as large as ours, these problems tend to spread. And not every business can be a large multi-national.
Similarly with other problems. There may be no immediate repercussions to your feudally wealthy lifestyle. But some day the bill always comes due. Violent ends and insurrections result. “Let them eat cake” has never been a successful policy.
Instead, I posit, as have many others, that what’s good for the middle class is good for the country and is good for the 1% as well.
