Tags: Minimum Wage | wealthiest middle class

Where Does the World's Wealthiest Middle Class Live?

By    |   Friday, 16 Oct 2015 03:47 PM

America is no longer home to the world’s wealthiest middle class. Instead, Canada has taken the lead for having the middle class with the greatest median annual income.

“The idea that the median American has so much more income than the middle class in all other parts of the world is not true these days,” Lawrence Katz, Harvard economist, told The New York Times. “In 1960, we were massively richer than anyone else. In 1980, we were richer. In the 1990s, we were still richer.”

America’s median wealth is $44,900 per adult, according to CNN. However, that number places the U.S. at No. 19 on the list of countries with the highest median wealth. Japan, Australia, and several Western European countries are ahead of the U.S.

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"Americans tend to think of their middle class as being the richest in the world, but it turns out, in terms of wealth, they rank fairly low among major industrialized countries," Edward Wolff, New York University economics professor, told CNN.

There are several reasons for America’s dropping proportion of the world’s wealthiest middle class. Real estate could be one reason Western European countries’ middle class have surpassed the U.S. in wealth. In most European countries, home ownership rates are higher than in America. Thus, middle class homeowners in Europe claim more assets than do American middle class homeowners.

Home ownership is also consistent with Canada’s large amount of wealthy middle class citizens. While the U.S. housing market has crashed in the past decade, Canada experienced a housing boom, making it the world’s “biggest housing bubble,” according to The Atlantic.

The ease in which Americans can borrow money also tends to cause American’s to rack up more debt than the middle class in other countries. Australia, for example, has a mandatory retirement savings program that helps citizens stay relatively debt-free upon retirement.

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The Luxembourg Income Study Database identified Norway, Canada, Austria, Denmark, and the Netherlands as countries whose middle class have been catching up to the U.S. in recent years. The database report attributes Canada’s education system, America’s slowly raising middle-class market wages, and governments’ failure to distribute income to poorer families as reasons for the changing patterns of middle class wealth in the world, according to The Atlantic.

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America is no longer home to the world's wealthiest middle class. Instead, Canada has taken the lead for having the middle class with the greatest median annual income.
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2015-47-16
Friday, 16 Oct 2015 03:47 PM
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