News You Really Need To See: “The American Middle Class Is No Longer the World’s Richest”

“The American Middle Class Is No Longer the World’s Richest”

The New York Times, April 23, 2014, p.A1

http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?_r=0

“The American middle class, long the most affluent in the world, has lost that distinction.  While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.  After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.  The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time.  They suggest that most American families are paying a steep price for high and rising income inequality. … The struggles of the poor in the United States are even starker than those of the middle class.  A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands.  Thirty-five years ago, the reverse was true.”

Quickie analysis:  Although a rising tide might lift all boats, it’s time to finally put that pleasant Reagan-era analogy to bed.  We’ve now run the experiment, analyzed the data, and found that a national economy behaves nothing like the tide.  (But the people who keep claiming otherwise tend not to be big supporters of science either.)

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