Decline Of The Middle Class Essay Research

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 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 and more unequally 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, 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 s