Why do some metros have a bigger or smaller middle class? What are the key motivating factors at work here? To get at this, Mellander ran a basic correlation analysis between the middle class share, as well as the upper and lower class shares, of metros and their key economic, social, and demographic characteristics.
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As usual, I note that correlations like these do not imply causality and simply point to associations between variables. We can start with the factors that are associated with the geography of the middle class. The middle class share of the population is associated with the working class. These are also all features of economically declining places.
On the flip side, the middle class share of the population is negatively associated with density -. Simply put, a big part of our national economic dilemma is this: the middle class is larger in declining places and smaller in growing ones. This is especially troubling as a large middle class remains a bulwark against rising economic inequality. The middle class share of the population is negatively associated with income inequality -. Worse, metros that had bigger middle classes in are the ones that have seen the largest middle class declines by We find a negative and statistically significant correlation -.
Lower-class metros are smaller with a correlation of -. They have lower levels of college grads -. They suffer from higher levels of income inequality. Upper class metros are larger. They also suffer from higher housing costs. In other words, increasingly, metros are either one or the other. In the U. Rich and poor increasingly occupy entirely different spaces and worlds. A new short film reveals how the Dutch city reengineered itself around the bicycle, with life- and money-saving results.
Is this a retreat from the open office or the next phase of it? The vision of the technology-powered metropolis of the future is being sold with images that bear little resemblance to the real world. This year-long journey across the U. Transportation How Utrecht Became a Paradise for Cyclists A new short film reveals how the Dutch city reengineered itself around the bicycle, with life- and money-saving results.
Laura Bliss Jul 5, Sarah Holder Jul 2, Life Death to Livability! Feargus O'Sullivan Jun 26, Design The 3 Pictures That Explain Everything About Smart Cities The vision of the technology-powered metropolis of the future is being sold with images that bear little resemblance to the real world. Either way, the shift is visible when comparing productivity and wages.
From to , improvement in real compensation per hour tracked improvement in productivity. This was part of the implied contract between workers and owners. In general, for a variety of reasons, the power of lower paid laborers relative to capitalists and landlords has declined. Recent trends indicate wages have stagnated and income inequality has worsened, reducing income available to middle-class families:.
According to the study, not only is real income decreasing for the middle class, but also the gap between the top wage earners and the middle earners is widening. Between and real median household income in the United States has declined by 2. According to the survey, working-class families headed by adults younger than 65 have seen even steeper declines.
The other way in which income affects the middle class, is through increases in income disparity. According to the census, the proportion of American families in that category, after adjustment for inflation, fell from As noted in the article, the heyday of the American middle class, and its high expectations, came in the Fifties and Sixties, when the median U. The rising prosperity was, however, halted by the inflation of the Seventies, which carried prices aloft more rapidly than wages and thus caused real income levels to stagnate for more than a decade.
- 2. employment and wages are declining.
- The American middle class is stable in size, but losing ground financially to upper-income families.
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While the average income in the United States is still almost the highest in the world. While overall inflation has generally remained low since ,  the costs of certain categories of "big ticket" expenses have grown faster than the overall inflation rate, such as healthcare, higher education, rent, and child care.
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These goods and services are considered essential to a middle-class lifestyle yet are increasingly unaffordable as household income stagnates. This situation is exactly what the House of Representatives survey shows regarding health care prices. The number of people who are uninsured has also increased since , with However, because of increases in college education costs, many middle-class Americans are missing out on a college education because of high prices, or caused them to leave college with massive amounts of debt, not allowing the middle class to enjoy the full benefits of a college education.
There has been no increase in government Pell grants, while at the same time interest rates for student loans has increased to a 16 year high. These price increases don't just affect middle-class Americans trying to get into college, but they also continue to affect those who attain a college education using the high interest rates of student loans.
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The use of leverage magnifies gains or losses in this case. They owe the full balance of the mortgage yet the value of the home has declined, reducing their net worth significantly. Like health care, increases in energy products can put added stress on middle-class families. From the U. Household debt contains mortgages, credit cards, student and auto loans. The squeeze on the middle class is also causing difficulties when it comes to saving money for retirement because of decreased real incomes and increases in consumer prices. There has also been a shift in employer retirement plans, with a shift from traditional defined benefit pension plans to k plans, in which there is no individual guarantee about the amount of retirement income that will be available.
Solutions to the middle class squeeze can involve a variety of strategies, from increasing compensation to reducing costs of certain goods and services or helping the middle-class pay for them. In the U. CAP recommended increasing the number of jobs through policies that stimulate economic demand, raising the minimum wage, strengthening the labor movement including unions , and tax incentives to encourage more redistribution of corporate profits to workers.
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Several studies have indicated that moderate increases in the minimum wage would raise the income of millions with limited effect on employment. The Economist wrote in December "A minimum wage, providing it is not set too high, could thus boost pay with no ill effects on jobs Some studies find no harm to employment from federal or state minimum wages, others see a small one, but none finds any serious damage.
CAP recommended solutions to either directly reduce the costs of these services or help middle-class families pay for them, including education grants, debt forgiveness, more generous family leave, and free subsidized pre-school. Showing that, overwhelmingly, the American people believe the middle class is being squeezed and are in a worse economic position than they were even 5 years ago. From Wikipedia, the free encyclopedia. This article has multiple issues.
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