Decline Of The Middle Class Essay Research Essay

Decline Of The Middle Class Essay,
Research Paper

Throughout the
past century, the middle class has emerged as a vital part of the
North American psyche. Even today, many people classify themselves as
a part of the middle class, regardless of their actual income level.
However, this perception is incorrect. In the past 20 years, the
middle class has been declining, primarily as a result of past
political interventions and job polarization throughout North
America. The subject of middle class is very controversial, and
depending on how it is defined, many different conclusions can be
drawn regarding the subject. It is not fair to judge a declining
middle class without taking into consideration many other aspects
that contribute to this class. The following report will detail many
aspects that have contributed to the decline of the middle class;
including events of the past that have shaped the middle class today
as well as conditions today that may affect us in the future.

For the purposes
of this essay, the middle class will be defined as households with
income between 75 percent and 125 percent of the North American
median. Many other factors must also be considered when analyzing the
middle class, such as, social criteria, educational levels and
occupation. Regardless of the actual definition adopted for the
middle class or the many other factors that contribute to middle
class status, for the past 20 years the middle class has been
steadily decreasing. The great American Middle class, the
provocateurs contend, is no longer so great. It is shrinking
steadily, goes the theory, and shedding its members into the economic
extremes of wealth and poverty. From the 1970’s to the present day,
over two million people who were representative of the middle class
are no longer in this class. In many cases some individuals have
slipped a notch to the poverty class, and in other cases a very few
have moves up into the ranks of wealth, and the higher class. There
are many reasons for the decline of the middle class in the present
day, most importantly are the events that occurred in our past that
have lead up to this issue that could threaten North America and the
the rest of the world forever.

After World War
II, middle class people’s wages grew steadily as well as the jobs
they occupied. With the rise of the manufacturing era, between 1958
and 1968, manufacturing added 4 million jobs, states and local
governments added another 3.5 million. From this point on as the
economy began to shift away from manufacturing and into high
technology and service industries, the number of jobs providing the
middle class standard began decreasing. Manufacturing, which pays on
average almost three times the minimum wage, added fewer than a
million jobs between 1968 and 1978, and has lost nearly 3 million
jobs over the past four years. With the loss of these jobs many
people s wages and salary income became more unequally and more
distributed in the economy as a whole. Unfortunately, this did not
provide companies with the opportunity to expand rapidly and
re-employ many of its workers. The overall story of how U. S.
manufacturing was losing its earlier ability to support a blue-collar
middle class was more complex. Jobs lost to foreign competition in
heavily unionized, highly paid industries like steel, autos and
machinery were not being replaced simply by low-wage service jobs at
McDonald’s and K-Mart. The decline of the middle class is also the
result of the explosive growth in world trade. As manufacturing
technologies have become more mobile, and firms have become more and
more careless, production jobs have migrated to countries where wages
are low. Another significant reason for the decline of the middle
class in North America has been the uneven growth of the
market-oriented economy. Market-oriented economies rely on incentives
to promote work effort and risk-taking. People in the middle class
who can respond most capably to these incentives are best rewarded.
The blameless problem is that wages are determined by supply and
demand. Many times these forces work in one’s favor. In other cases,
they do not. Canadians no longer define middle class by the
opportunity it presents, but by the burden it carries: high taxation,
fear of the future, and a feeling of being overwhelmed by events. For
the majority of today’s middle class, the odds have been against them
in the past; however, the future may be different.

With the decline
of today’s middle class many people lives have changed for better or
for worse. After three decades of social and economic upheaval, the
contours of a new North American middle class are starting to emerge.
Today s middle class recipients have more choices and are notably
more satisfied. However, many people living in the middle class face
more tribulations, ranging from widespread divorce to slow income
growth in today’s economy. From the sixties until today, the middle class
North Americans have established a clear set of lifestyle rules.
There have been changes in relationships between employees and
employers, husbands and wives, and parents and children. Middle class
recipients of today are marrying later, having fewer children,
retiring earlier, and living longer then individuals from past
generations. This changed lifestyle is a result of the new options
and challenges people living in the middle class are face today.
Taken together, the middle class is more sanguine today, as revealed
in a survey of 5,000 households this year .The Board asked people to
compare their standard of living with what they recalled of their
parents. Over two-thirds responded that they have it better; only 15%
said they were worse off. Today, middle class recipients bear a
greater responsibility for keeping skills fresh with the explosive
era of technology. As well, a significant change in today s middle
class has been the brighter career opportunities for young women.
With all off these benefits contributing to middle class lifestyles,
there are many issues as a result of this new middle class lifestyle.
High divorce rate means more families headed by single mothers living
in poverty And with people over the age of 75 the fast-growing
segment of the population, more are falling victim to lingering
ailments such as Alzheimer’s disease, emphysema, and stroke. Middle
class people today live better lifestyles then those before them even
though there income is lower and the expenditures are higher.

The erosion of
the middle class household net incomes in the 1990’s has taken its
sharpest decline since the 1930’s. Middle class declines of the past
have been cyclical and very brief; however, today’s economic decline
of the middle class may prove to be secular and long-term. The
worries of today’s middle class decline go beyond the immediate job
losses threatened by recession or the more expensive lifestyles
middle class people live in today. They threaten the erosion of
assets, especially home values, and people living as middle class
also worry about the provisions of their future, pensions, annuities
and insurance policies. The importance of the preservation of middle
class is necessary for North America as a whole; the middle class
shapes the values and ambitions for any nation throughout the world.

The past
deterioration of the middle class could have serious results towards
North American societies. However, there are many possible solutions
in replenishing the situation our generations may face in the future.
Regardless of the changes in government taxation, there are several
economic trends that may cause an upswing in the middle class
ultimately increasing the middle class income as a wage fixation to a
serious problem of the past and possibly of the future. For example,
the first is slowing the growth of labor in North America. The Bureau
of Labor Statistics (BLS) is forecasting a 25 percent drop in the
rate of labor force growth for 1994 to 2005 as compared with 1988 to
1993. One reason why this alternative seems practical is due to the
fact that women’s labor growth is expected to reach a stabilizing
point after decades of increase. This event will result in about half
a million fewer people a year at work or looking for work then the
past. If the supply of workers decreases and the demand for work is
maintained, real wages may rise as they did in the past. The second
factor that may drive up the middle class would be the cumulative
effect of increasing education for young people. Having more people
stay in school for longer periods of time past high school would
force higher wages for young people. Increasing skills, learning and
experience through post high school education will cause the economy
to drive up wages for young adults. Many economists have argued that
the solution to the middle class is not the payment of higher wages
but rather the halting the outflow of well paying jobs and focusing
on aiding industries in improving a countries global competitiveness.
All of these factors will have different impact on the improvement of
the middle class and perhaps will bring the middle class back to
where it once was in the past. No matter what trends are taken to
resolve this growing issue, being a part of the middle class is
stated by one s earning. However, being middle class is a state of
mind shared by nearly all people in North America.

The assertion
that the North American middle class is disappearing arose in the
1970’s, and a definitive answer and consensus as to the seriousness
of the problem remains unclear. Any analysis of the middle class
depends on the definition of middle class income and other aspects
relating to middle class stature. From the period of 1957 to 1987 the
middle class has decreased, primarily due to the uneven growth in
middle class income. During this period of time the cost of a middle
class goods have risen substantially, straining families, abilities
to sustain a middle class standard of living. Moreover, non-wage
compensation for full-time employees, such as health care, pension
provisions have eroded, further straining the middle class

Any substantial
decline of the middle class even if it were partly psychological
would be ominous for North America as a whole. It is the middle class
whose values and ambitions set the tone for any country. It is the
middle class that drives to become a society. The middle class people
serve as the strongest, powerful voices for political compromise. The
middle class is so sacred to North American nations that even its
potential shrinkage is so controversial. North America needs a middle
class. The middle class has an influence that has been highly valued
for hundreds of years and will continue to stay valued for many more
years to come.

Stephen Koepp,
Is the Middle Class Shrinking? Economy & Business: 54, November
1986 [article on-line] available from;
Internet; accessed 17 April 2000.

Bob Kuttner, The
Declining Middle, Middle Class Society 14 (April 2000): 1.

Bob Kuttner, The
Declining Middle, Middle Class Society 14 (April 2000): 1.

Kevin Phillips,
Boiling Point Democrats, Republicans and the Decline of Middle-Class
Prosperity (New York, NY: Random House Press, 1993), 196.

Eric Molson,
Middle Class, Social Trends: 1, May 1998 [article on-line] available
from; Internet; accessed 17 April 2000.

Louis S.
Richman, The New Middle Class: How it Lives, The Economy: 1, August
1990 [article on-line] available from;
Internet; accessed 17 April 2000.

Louis S.
Richman, The New Middle Class: How it Lives, The Economy: 1, August
1990 [article on-line] available from;
Internet; accessed 17 April 2000.

Kevin Phillips,
Boiling Point Democrats, Republicans and the Decline of Middle-Class
Prosperity (New York, NY: Random House Press, 1993), 142.

Work Cited

Koepp, Stephen.,
Is the Middle Class Shrinking?, Economy & Business: 54, November
1986 [article on-line] available from;
Internet; accessed 17 April 2000.

Kuttner, Bob.,
The Declining Middle Class, Middle Class Society 14 (April 2000):

Molson, Eric.,
Middle Class, Social Trends: 1, May 1998 [article on-line] available
from; Internet; accessed 17 April 2000

Kevin., Boiling Point. New York, NY: Random House, 1993.

Richman, Louis
S., The New Middle Class: How it Lives, The Economy: 104, August 1990
[article on-line] available from; Internet;
accessed 17 April 2000.

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