Tags: middle class | income | wealth | poverty

CBS: Middle Class Is Dying as Factory Towns Wither

CBS: Middle Class Is Dying as Factory Towns Wither

By    |   Thursday, 12 May 2016 04:20 PM

Middle-class Americans, once considered to be the bedrock of the country’s thriving economy, are becoming a dying breed as wealth distribution is increasingly split by the ultra-rich and everybody else. And people in factory towns are being hurt the worst.

The middle class has retreated in nine out of 10 U.S. metropolitan areas since 2000, as income inequality widened after the recession, CBS News says on its website, citing a report from the Pew Research Center.

“The report expands the organization's research into the fortunes of the country's middle class, which Pew in December found had declined to less than 50 percent of households, representing a major shift in America's economic fabric,” CBS reports.

The “hollowing out” of America's economy has become a major campaign issue for politicians across the ideological spectrum and partly explains the popularity of “outsider” presidential candidates like Republican front-runner Donald Trump and Sen. Bernie Sanders, an independent seeking the Democratic nomination.

Both candidates are running on a platform of helping America's dying middle class, particularly by renegotiating trade deals with low-cost countries like China and Mexico.

Pew defines the middle class as households with annual income between two-thirds to double the national median — that's about $42,000 on the low end to $125,000 at the upper limit for a family of three. The portion of Americans living in middle-income households fell from 55 percent in 2000 to 51 percent in 2014.

“Many of the biggest losers have a common thread: ties to manufacturing, which has been hard-hit in the last decade,” CBS reports. “The Rust Belt city of Springfield, Ohio, saw a 16 percent decline in economic status, tying it with Goldsboro, North Carolina, the home to Seymour Johnson Air Force Base, as the biggest losers of economic status.“

After China joined the World Trade Organization in 2001, the decline of U.S. factory production accelerated as companies moved operations overseas.

Meanwhile, social mobility is fading as people who aren’t born into the upper-income levels of society are less likely to join their ranks, writes Richard V. Reeves, an economist at the left-leaning Brookings Institution.

“America is becoming a more class-stratified society, contrary to the nation's self-image as a socially dynamic meritocracy,” he writes for Real Clear Markets. “The barriers are hardening between the upper middle class and the majority below them.”

People who are born to high-earning parents with advanced degrees are more likely to get an advanced degree and perpetuate their status in the upper fifth of society, Reeves says, citing data from a study on poverty. People in the top quintile are more likely to surround themselves with members of their class, separating themselves further from the lower ranks of society.

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Middle-class Americans, once considered to be the bedrock of the country's thriving economy, are becoming a dying breed as wealth distribution is increasingly split by the ultra-rich and everybody else.
middle class, income, wealth, poverty
451
2016-20-12
Thursday, 12 May 2016 04:20 PM
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