The Increasing Pressure on the Middle Class

Tuesday, June 27, 2006 | 07:36 AM

In yesterday's RM column, I referenced a chart from the Sunday NYT (below).

click for larger graphic


Courtesy of the New York Times


The key takeaway from this is the ongoing increasing pressure on the middle class; Dan Gross called this the cram down decade.

Since the theme of the column was "Ignore Statistical Oddities at Your Peril," here is one to mull over: How much of an economic aberration is a large middle class?

For most of history, there has been landed gentry and working knaves. The middle was relatively narrow slice -- larger in numbers than the wealthy, but obviously less numerous than the poor.

During the Roman Empire, the merchant class fully developed, including soldiers, traders, and all manner of craftsmen. The Middle Ages saw the rise of Guilds, as Coopers, Smiths, Innkeepers all rose above the indentured servants and free field hands. Perhaps some of our more knowledgable readers with a better grasp of histpory than I can address this in comments.

Following WWII, the United States saw an explosion in the number of people moving into the Middle Class. Those numbers may now be slowly reversing.

The funny thing to me is how your perspective can get easily skewed by your surroundings. To be in the top 1% of earners in the U.S., you need an annual wages/income of $237,000. Here in NYC, where there is an enormous concentration of wealth, you are (barely) upper middle income at that salary level -- certianly not wealthy. And on Wall Street, half the people I personally know earn at least that much -- and complain about it.    

How this wealth distribution plays out may have significant repercussions on a variety of sectors -- especially the balance between luxury and discount goods.

It is definitely worth keeping an eye on this in the near future . . .


Economic View: Income Inequality, and Its Cost
NYTimes,  June 25, 2006

Tuesday, June 27, 2006 | 07:36 AM | Permalink | Comments (46) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



TrackBack URL for this entry:

Listed below are links to weblogs that reference The Increasing Pressure on the Middle Class:


It will be interesting to see what sources of income the middle class generates to sustain itself.
Since outsourcing mainly hits the middle class from it's lower factory jobs to the software engineers, accounts and lawyers, I would think the next couple of decades will witness a middle class creating new sources of income.
More involvement in entrepreneurship (starting new software companies or selling coins on eBay) or other interesting blends of talent and capital.

Posted by: Louis | Jun 27, 2006 9:07:43 AM

The comments to this entry are closed.

Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      


Complete Archives List



Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:

Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo



Odds & Ends

Site by Moxie Design Studios™