American Middle Class Disappearing

[lance]

Gas prices continue to decline

The price spike was when I was in the 7th grade, which was about 10-12 years ago, so 1999-2001ish.
For it to still be that rate, the average wage would need to be 30 something dollers.

[The Spartan]

Oh, I actually found a graph to show it quite good:

It's actually amazing, since the 1980 the income of the lowest 10%, lowest 20% and lowest 50% was almost flat. The last-ditch rise, fuelled by mass consumer credit and other methods in the 1990s, seems to have been wiped out in the last crisis.

It would be cool to see where this graph leads to in 2010.

Something else to keep in mind is that, when this graph starts, the majority (roughly 2/3's as I recall) of households were single income households. Now, the reverse is true with about that same amount of households now dual income.

So, the households that had little debt in the mid-sixties with one earner now have crushing debt with two earners and couldn't keep up before the crash...

[Stravo]

The Spartan brings up an excellent point that is not addressed in the article. Before you could be Middle Class and be a single wage earner home. Now you basically need two pay checks to stay in the game. We're working harder just to tread water.

[Iosef Cross]

The Spartan brings up an excellent point that is not addressed in the article. Before you could be Middle Class and be a single wage earner home. Now you basically need two pay checks to stay in the game. We're working harder just to tread water.

Clearly, today's American middle class has a much greater standard of consumption than 50 years ago. If you want to have 1950's standards of consumption, you can have those without having two wage earners in the house.

The number of Americans working per family has increased because the requirements of home labor have decreased, not because income per person has decreased.

[Alyrium Denryle]

Clearly, today's American middle class has a much greater standard of consumption than 50 years ago. If you want to have 1950's standards of consumption, you can have those without having two wage earners in the house.

No you cant. Back then, a single income family could afford their house payment, a car, health insurance etc. Now they cant. Very simple.

The number of Americans working per family has increased because the requirements of home labor have decreased, not because income per person has decreased.

What exactly has changed such that home labor has dropped? We dont exactly have Sweeping Robots. Home labor has stayed roughly the same. Mom just works a double shift now.

[Iosef Cross]

Them argue that per capita income don't measure anything, that middle class is a relative concept and that average is different than median. Good.

Average is different than median. Average, or arithmetic mean, is a basic measure of total value divided by number of units. The median however is a benchmark measure defining the exact middle value and is far more useful as an indicator when a range of values is defined by extremes. To give a simple example: the average value of 10, 20, 30, 50, 100, 300, 600, 1800 is 363.75. The median value, however, is the one which lies between 50 and 100: 75.

Yes, I know that average is different than median.

Though my comment made it appear that I considered everything that they said was wrong. Actually, the middle class is partially a relative concept (in India the middle class is composed of the 10% wealthiest minus the 1% rich).

But it is plain wrong to say that a country whose per capita income increased from 13,000 dollars in 1950 to 43,000 dollars in 2008 can have declining living standards.

For example, the average house space per capita increased from 292 square feet in 1950 to 900 square feet by 2006:

So Many Square Feet, So Few People

by Nic Darling on October 20, 2008 · 54 comments

in Philosophy

Taking part in the comment conversation on a couple of posts I have written led me to consider the way we think about home size. Typically, as one reader complained, homes are merely judged by their square footage and disregard the number of occupants. Meaning, that the owner of a large home with a big family might be criticized by small home proponents, while at the same time small homes are shunned for offering too little space for a family. Perhaps, instead of thinking of how large a house should or should not be, we should consider how much space each individual needs, a sort of square feet per capita idea.

The best way to start is by gaining a little historical perspective. The average American home in 1950 was 983 square feet (source) and, according to Census data (PDF), the average American household size was 3.37 people. This means that in 1950 the average American had 292 sfpp (square feet per person).

Square Feet Per PersonIn the years that followed home size gradually grew and household size gradually fell until, in 2006, the average American household of 2.61 (source) shared a house of 2,349 square feet (source). So, in 2006, the average American had 900 sfpp, and that number has certainly grown in the last two years. I have heard average home size numbers approaching 2,800 square feet for 2008, but I couldn’t find a reliable source to quote.

So, seeing this wide range, the question remains . . . how much space do we need? Has the increase in sfpp seen a correlating increase in the quality of life? Are we three times more comfortable than we were in 1950? Are we three times happier? Could we, perhaps, manage to live in slightly smaller spaces than those with which we have become accustomed, particularly if it proves to have a positive impact on our environment, traffic congestion and other quality of life issues?

[Iosef Cross]

Clearly, today's American middle class has a much greater standard of consumption than 50 years ago. If you want to have 1950's standards of consumption, you can have those without having two wage earners in the house.

No you cant. Back then, a single income family could afford their house payment, a car, health insurance etc. Now they cant. Very simple.

Houses in 1950 were 3 times smaller. Families in the 50's had fewer cars. Health care was cheaper, though less effective: Living expectancy in 1950 was 68 years in the US, today it is over 78 years. In Mexico today it is 75.1 years.

The number of Americans working per family has increased because the requirements of home labor have decreased, not because income per person has decreased.

What exactly has changed such that home labor has dropped? We dont exactly have Sweeping Robots. Home labor has stayed roughly the same. Mom just works a double shift now.

Microwave ovens, pre prepared dishes, washing machines, clothes washers, etc.

The proportion of household that have these durable household goods today is much greater than 50 years ago. Today house keeping is mechanized.

[Iosef Cross]

How good were the good old days of the 50's?

Let's compare the US of those days with Mexico today:

----------------------- US --------- Mexico

Life expectancy ---- 69.8 (1960) ---- 75.1 (2009) Source: World Bank World Development Indicators (WDI)

Per capita income -- 13,225 (1950) -- 14,337 (2009) Source: Already provided.

Mortality rate ------ 26 (1960) ------ 15 (2009) Source: World Bank World Development Indicators (WDI)

Clearly, the good ol' US of A wasn't as good as some people believe.

[Iosef Cross]

Read that:
http://myslu.stlawu.edu/~shorwitz/Good/myths.htm
The number of labor hours needed to purchase goods in 1950 compared to 1997 (by 2010 it will be even higher)

Strangely enough it shows almost no real progress between 1980 and 1997, as opposed to the massive progress in prior times. Low base - high base, obviously - super-industrialized economies of the First World are hitting limits of growth, it seems.

You mean the wages per hour? The period from 1980 to 1997 is only of 17 years, also, real wages increased at faster rate than productivity between 1950 to 1980, then between 1980 and 1997 their increase was reduced.

The US economy grew substantially between 1975 and 1991, and the average income of those in the bottom quintile did rise in real terms ($207 on average), albeit not by very much. So even though the relative share of the poor fell, their absolute income rose.

So this means that the real income of the bottom quintile almost stood flat, whereas the incomes of the rich rose substantially. In absolute terms, the poor got dick, and in relative terms, they got poorer compared to the rich. *shrugs*~

True, the richer got richer at faster speeds than the poorer using this measure. However, when one measures the per capita or per household consumption of poor households, their access to consumer goods has increased at faster pace than the rich (maybe because the rich already have more income than they could spend on microwave ovens and air-conditioners).

Oh, I actually found a graph to show it quite good:

It's actually amazing, since the 1980 the income of the lowest 10%, lowest 20% and lowest 50% was almost flat. The last-ditch rise, fuelled by mass consumer credit and other methods in the 1990s, seems to have been wiped out in the last crisis.

The increase in consumer credit wouldn't expand incomes, but it would expand consumption without expanding incomes. This can explain why poor households expand their consumption more than their incomes in the last 30 years in the US: They loaned money.

The incomes of the lowest 10% actually expanded substantially between 1965 and 2000. Considering that "neoliberal" era started in 1973, their incomes expanded during this era of increasing inequality.

The 50% percentile had the most stagnated incomes. That means that the poorest have ascended to middle class, while the rich have "transcended" previous income levels.

[K. A. Pital]

The incomes of the lowest 10% actually expanded substantially between 1965 and 2000. Considering that "neoliberal" era started in 1973, their incomes expanded during this era of increasing inequality.

On the graph, there's more progress between 1965 and 1980 than between 1980 and 2005. Sorry.

The 50% percentile had the most stagnated incomes. That means that the poorest have ascended to middle class, while the rich have "transcended" previous income levels.

The graph I have shown proves nothing of the sort.

1980-2005:
Poorest 10% marginal rise
Poorest 20% marginal rise

Richest 5% - doubled.

[Big Phil]

The dogpiling of Iosef Cross aside, there's no data that shows that the middle class is actually disappearing; there's plenty of data to show that the wealthiest are getting wealthier at a faster rate than everyone else, but that's a different argument.

[Kanastrous]

What exactly has changed such that home labor has dropped? We dont exactly have Sweeping Robots.

Sure we do. They're called Roombas. Although in my experience they're less effective at sweeping than at terrorizing the cats. Plus dishwashers, laundry machines, vacuum cleaners, air filters, ionizers, automated toilet cleaners and all manner of purpose-designed solvents and cleaning products designed to minimize or eliminate labor that used to occupy hours of time (although one might argue that the hours of time are still required; you just spend them working to afford the cleaning gimcrackery rather than doing the cleaning the old-fashioned way...)

Home labor has stayed roughly the same. Mom just works a double shift now.

Or hires an illegal alien housekeeper, or another worker sufficiently desperate for the job.

[Uraniun235]

(although one might argue that the hours of time are still required; you just spend them working to afford the cleaning gimcrackery rather than doing the cleaning the old-fashioned way...)

If the appliance lasts long enough, you win in the long-term.

[Alyrium Denryle]

Sure we do. They're called Roombas. Although in my experience they're less effective at sweeping than at terrorizing the cats.

They are a cute novelty. They are only effective at terrorizing the cats...

Plus dishwashers

Invented in the 1800s, electric drying in 1940, full adoption in domestic residences by 1970. Prewashing dishes in the sink is still necessary, loading and unloading still needed. They do not reduce the time for dishwashing, just the elbow grease.

laundry machines

60% adoption by 1940. Laundromats fill the gaps. No drop in labor since the 50s...

vacuum cleaners

Common by the late 40s.

air filters, ionizers

Yes, because mom manually filtered the air...

automated toilet cleaners and all manner of purpose-designed solvents and cleaning products designed to minimize or eliminate labor that used to occupy hours of time

I will grant you the solvents, but those still do not significantly reduce the actual time doing the work as that is controlled more by square footage. They reduce the effort/clean ratio certainly, but not the time spent doing the work since the 50s. Not enough to make one spouse so non-busy that she now occupies herself with a 40 hour work week in addition to the housework to avoid boredom.


(although one might argue that the hours of time are still required; you just spend them working to afford the cleaning gimcrackery rather than doing the cleaning the old-fashioned way...)

[Kanastrous]

Air filters and ionizers are time-savers re: cleaning in that they reduce the amount of dust etc free in the air, to settle where you have to clean. I've never found it necessary to pre-wash dishes before putting them in the machine, but even if I did a pre-wash takes less time than a full wash-rinse-and-dry by hand, so there is still a time and effort savings.

Agreed regarding the rest of it, although from introduction to full adoption probably took some time too. Where does the 60% adoption rate (by household, I assume) on laundry machines come from?

[Alyrium Denryle]

This is true, it would reduce dusting.

The rate is by household from http://en.wikipedia.org/wiki/Washing_machine

I am pretty sure I dont have to worry about someone fucking with the adoption rate for washing machines

[Medic]

While I by no means am downplaying the lower and middle class's woes, keep in mind too there's not a very strong ethic of saving, either. I mean, if you added up new car sales you'd probably see more new vehicles entering America than born-here Americans... A quick Google shows there's 250 million registered vehicles (more than drivers), and this excludes motorcycles, and for that matter, could-be-working, unregistered vehicles just sitting around.

They don't buy themselves. Maxed-out credit cards would do nicely though. (automobiles are but one touching stone)

[Terralthra]

Them argue that per capita income don't measure anything, that middle class is a relative concept and that average is different than median. Good.

Average is different than median. Average, or arithmetic mean, is a basic measure of total value divided by number of units. The median however is a benchmark measure defining the exact middle value and is far more useful as an indicator when a range of values is defined by extremes. To give a simple example: the average value of 10, 20, 30, 50, 100, 300, 600, 1800 is 363.75. The median value, however, is the one which lies between 50 and 100: 75.

This is imprecise. Average describes a group of functions which all provide measures of a dataset's central value. Mean (arithmetic, geometric, harmonic), median, and mode are all averages, and each offers better values depending on the dataset. There are yet more, but those are the most common.