Should Middle Class Be Drivers Of Economic Growth

Despite the debates about social class, the United States is usually described as having four major social classes, the elite or upperclass, the middle class, the working class, and the lower class (Goldscmidt). Classes are generally differentiated by income, education, and occupation although other factors do have an effect. The upperclass consists of about 1% of the population making 750,000 dollars or more a year as investors, top executives, or heirs to large fortunes (Hughes and Jenkins). There tends to be no question about who is in the upperclass as they are pretty clearly isolated in their power and wealth. The middle class makes up about 40% of the population making anywhere from 40,000 to 749,999 dollars a year (Hughes and Jenkins). The large disparity in income and wealth have led to a further division of this class into upper-middle class and middle class in some circles. The middle class usually work white collar jobs as professionals and managers, however some highly skilled blue collar workers are included. Those in the middle class have usually obtained higher education degrees and place a high value on individual responsibility for one’s class (Goldschmidt). The working class is composed of about 50% of the population earning 13,000 to 39,000 dollars a year (Hughes and Jenkins). Some also divide this class into a working class and a

When discussing what it is like to be in the middle-class one individual stated, "it is like were stuck", this statement expands on the fact that it is getting harder and harder to cross the gap between the middle and upper-class. I agree that the gap between the middle and upper-class is continuing to grow and becoming harder to cross, but it is not

During the past couple of decades, the decline in the middle class has been associated to the political agenda of the Republican Party. By ending governmental subsidies and other programs created to build the middle class, has ultimately ceased the growth. However, realizing the importance of the middle class to our fragile economic platform, the Democratic and Independent political parties are desperately trying to create and revamp the middle class

There is no doubt that wealth inequality in America has been escalating quickly; the portion of total income earned by the top one percent has doubled since the beginning of the 1970’s. The wealthy are the main beneficiaries

Of this group, about 1/3rd belongs to the upper-middle class. The annual income of person belonging to this group is $70-$75,000. The jobs that the typical upper-middle class person holds would have a prestige rating of 65 or higher. 2/3rd?s of the middle-class population is the lower-middle class. White-collared individuals make up the majority of this class, earning anywhere from $30,000 to $60,000 a year. Lower-middle class Americans have a set standard of priorities. They take pride in the fact that they are financially stable, and promote hard work, and press on education. Without education, the members feel that they would not be where they are economically, and preach the importance to their children so that they, too, can live a lifestyle very similar to that of theirs (Norton).

On top of it all the rich seem to get richer, spending their money on bigger houses, better cars, always trying to out do each other while the middle class continues to struggle. Paul Krugman describes this very well by saying,

Furthermore, when analyzing the different classes, and the distributions of wealth and income in the United Sates; for instance, the upper, middle, and lower classes – it is an astronomical amount of wealth that the top 1 percent acquire. It is also noted by Johnson & Rhodes (2015), “that income and wage inequality have risen sharply over the last thirty years” (pg. 228). Equally important to this, is how the average change in income is divided in Americas quintiles and the widening gaps. For example, in Table 5.2, while the lowest fifth quintile increased from $11,128 to $11,361 – a difference of $233.00 from years 2006 to 2012; the highest quintile increased from $289,446 to $319,918 – an exponential increase of $30,472 (pg. 229). With income inequalities at this rate, it is difficult for the majority of the United States to experience upward social mobility. Pursuing this further, in a line stated by Johnson and Rhodes (2015), “The wealthiest Americans can live on the dividends from their investments without having to touch the principle or work for a salary” (pg. 230). From this, it is visible to see how society has compartmentalized different levels of functions to keep a so called balance for the greater

Over the past few decades, the “American Dream” vision has been quickly vanishing as a result of the increasing troubles and weakening of the middle class. It has lost the view of being the most successful and wealthy middle class in the world, while the middle classes in other countries are excelling in earning higher middle and lower class incomes. The issue of the declining wealth of the middle class explains a huge problem in the United States’ future prosperity and well being for the citizens and the country. There are many issues that affect the success of the middle and lower classes, such as structural differences in the economy, culture, and government. The gap between the middle and high classes is increasing specifically. The United States has the image of giving people life and prosperity, but inequality is increasing significantly due to issues in education, decrease in taxation among the upper class, and decrease of middle class power in the democracy, while other ideas and mechanisms can be take from other nations.

In other words, America has a widening gap between its wealthy and poor. As the rich get richer and the poor get poorer, there is a problem emerging: the disappearance of the middle class. Low-wage workers continue to fall behind those who make higher wages, and this only widens the gap between the two. There has been an economic boom in the United States, which has made the country more prosperous than it has ever been. That prosperity does not reach all people; it seems to only favor the rich. Rising economic segregation has taken away many opportunities for the poor to rise in America today. The poor may find that the economic boom has increased their income; however, as their income increase so does the prices they must for their living expenses (Dreier, Mollenkopf, & Swanstrom 19).

In the article “America’s wealth gap between middle-income and upper-income families is widest on record” by Richard fry talks about the wealth gap between the upper and lower class is so far wide apart from each other.

The highest earning fifth of U.S. families earned 59.1% of all income, while the richest earned 88.9% of all wealth. A big gap between the rich and poor is often associated with low social mobility, which contradicts the American ideal of equal opportunity. Levels of income inequality are higher than they have been in almost a century, the top one percent has a share of the national income of over 20 percent (Wilhelm). There are a variety of factors that influence income inequality, a few of which will be discussed in this paper. Rising income inequality is caused by differences in life expectancy, rapidly increases in the incomes of the top 5 percent, social trends, and shifts in the global economy.

In the United States, high standard of living is not equally shared with in the Americans. The 1970s and 1990s was period where economic inequality began to grow. Emmanuel Saez, an economics professor at UC Berkeley has been doing a research for the U.S. income inequality. He states that there has been an increase since the 1970s, and has reached levels that have not been seen since 1928. “In 1928, the top 1% of families received 23.9% of all pretax income, while the bottom 90% received 50.7%. But the Depression and World War II dramatically reshaped the nation’s income distribution, by 1944 the top 1%’s share was down to 11.3%, while the bottom 90% were receiving 67.5%, levels that would remain more or less constant for the next three decades. But starting in the mid- to late 1970s, the uppermost percent income share began rising dramatically, while that of the bottom 90% started to fall.”(DeSilver) Ever since then, economic inequality continues to increase, especially in the last three decades.

The current distribution of income in the United States is a result of the free market failing. According to the United States Census Bureau, the top fifth of the income earners took home 51% of the national income while the bottom fifth took home a mere 3.2% (United States of Commerce, 2014). Income of the top fifth has been slowly increasing through the past ten years and the bottom fifth has been slowly decreasing.

Income trends have varied from state to state, but a pattern is apparent: the rapid growth of the top 1% Between 1979 and 2007, the top 1 percent took home well over half (53.9 percent) of the total increase in U.S. income. Over this period, the average income of the bottom 99 percent of U.S. taxpayers grew by 18.9 percent. Simultaneously, the average income of the top 1 percent grew over 10 times as much—by 200.5 percent

What is a circular economy, what are some of the key principles, concepts and building blocks and what system shifts might be needed to bring it about at scale?