Tags: Samuelson | psychology | middle | class

WaPo's Samuelson: Psychology Will Be as Important as Economics in Lifting Middle Class

By    |   Monday, 29 December 2014 12:23 PM

While a lot has been written about the woes of the middle class, psychology is just as big a part of the problem as economics, says Washington Post columnist Robert Samuelson.

"What the middle class faces today is a crisis of faith," he writes. "Being middle class is more than attaining some threshold income. It also involves embracing a set of beliefs that, unfortunately, have been severely shaken."

So what is the middle class afraid of? "The great middle-class fear today is that the connection between personal aspirations and societal opportunities is breaking down," Samuelson says.

"The economy is more random, unstable and insecure than we imagined. It is less susceptible to policy engineering. The fact that the upper classes can better shield themselves against its upsets naturally breeds resentment."

Fewer Americans now buy into the idea of joining a comfortable middle class. "Repairing the middle class won't be easy, because it's a matter of psychology as much as economics," Samuelson writes.

The wealth gap between the country's upper-income and middle-class families has risen to a record high, according to a new study from the Pew Research Center.

The survey, based on 30 years of Federal Reserve data, shows the gap between upper- and lower-income families also has climbed to an all-time peak.

The median wealth of upper-income families totaled $639,400 last year, 6.6 times the median wealth of middle-income families — $96,500. That compares with 4.5 times in 2007, the year before the financial crisis.

In addition, the median net worth of upper-income families tops the $9,300 median of lower-income families by 68.8 times.

"The latest data reinforce the larger story of America's middle-class household wealth stagnation over the past three decades," the report states.

"The Great Recession destroyed a significant amount of middle-income and lower-income families' wealth, and the economic recovery has yet to be felt for them. . . . Middle- and lower-income families' wealth levels in 2013 are comparable to where they were in the early 1990s."

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While a lot has been written about the woes of the middle class, psychology is just as big a part of the problem as economics, says Washington Post columnist Robert Samuelson.
Samuelson, psychology, middle, class
332
2014-23-29
Monday, 29 December 2014 12:23 PM
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