Opinion

David Rohde

White House: The American middle class is shrinking

David Rohde
Jan 13, 2012 19:12 UTC

In a speech in Washington on Thursday, the chairman of President Obama’s Council of Economic Advisers said that the American middle class has been shrinking since 1970. Princeton University economist Alan Krueger said the American middle class shrank from 50.3 percent of American households in 1970 to 42.2 percent in 2010. Krueger defined the middle class as households with annual incomes within 50 percent of the national median income. Here is a table presented describing his findings.

 

Later in the speech, Krueger cited well-known studies describing growing income inequality in the United States. His claim about a shrinking middle class, though, appears to be new. While researchers have in the past argued that the middle class is shrinking, both Democratic and Republican administrations have generally steered clear of giving an exact definition of the middle class. Apparently fearing that an exact definition could backfire on them if the economy performs poorly, administrations have vowed to defend the middle class but avoided specifics. Given the central role that the state of the middle class will play in the 2012 presidential campaign, all of that may be different this year. To me, that’s a step forward.

What do we mean by “middle class”?

David Rohde
Dec 29, 2011 21:51 UTC

Update: My apologies. I cited the wrong Census data table when describing my definition of the middle class. A corrected version is below.

Are you middle class?

For decades, praising the middle class has been a staple of American politics. Candidates vow to defend the middle class and accuse their opponents of betraying it. But what, exactly, is the “middle class”?

Since I began writing this column three months ago, readers have asked for an exact definition of the middle class. The question is a legitimate and vital one. With studies showing the American middle class in decline, understanding which policies create, expand and protect the demographic is more important than ever. But definitions vary.

In Milwaukee, an evaporating middle class

David Rohde
Dec 15, 2011 23:22 UTC

MILWAUKEE — As Washington and Madison fiddle, this city’s middle class is in slow free fall.

First, the numbers. From 1970 to 2007, the percentage of families in the Milwaukee metropolitan area that were middle class declined from 37 to 24 percent, according to a new analysis by the Southeastern Wisconsin Regional Planning Commission.


(Click on the photo above for a slideshow) During the same period, the proportion of affluent families grew from 22 to 27 percent–while the percentage of poor households swelled from 23 to 31 percent. In short, Milwaukee’s middle class families went from a plurality to its smallest minority. 

Mr. President and Mr. Speaker, we’re not in Kansas anymore

David Rohde
Dec 8, 2011 19:15 UTC

On Tuesday, Barack Obama declared the debate over how to restore growth, balance, and fairness to the American economy the “defining issue of our time.”

“This is a make-or-break moment for the middle class,” he said in a Kansas speech, “and for all those who are fighting to get into the middle class.”

The following day, Republican front-runner New Gingrich said Mr. Obama “represents a hard left radicalism” and is “opposed to capitalism and everything that made America great.” The answer, he said, was slashing taxes and the size of the federal government.

Occupy something

David Rohde
Dec 2, 2011 02:31 UTC

By David Rohde

The views expressed are his own.

Update: On Dec. 6th, Occupy protesters began a new tactic of rallying around homeowners trying to resist foreclosures in several cities. Read more here and here. The following column was published on Dec. 1st.

The Occupy movement is flirting with irrelevance. While press reports trumpet the movement’s introduction of the phrase “we are the 99 percent” into the political conversation, the group’s largest encampments have been razed. On Wednesday night, Los Angeles and Philadelphia joined New York, Oakland, Detroit and St. Louis in clearing out its protesters. Small demonstrations continue, but the movement now needs to turn catch-phrases into political change.

This week, Manhattan’s Zuccotti Park was a symbol of the movement’s potential dissolution. On Tuesday afternoon, a dozen Occupy Wall Street protesters held a quiet discussion in one corner of the park. In another, a lone office worker sat at a small, marble table and ate his lunch. Christmas lights glistened on trees that once sheltered protesters. Scores of police blocked anyone with a tent from entering the area.

Dismiss the middle class at your peril

David Rohde
Oct 27, 2011 19:39 UTC

For two hundred years, the middle class has enjoyed legendary status in Western economic thought. First the British and then the American middle classes, Weber, Marx and many others said, served as vaunted engines of economic growth and political stability throughout the 19th and 20th centuries.

When large segments of the population moved beyond subsistence living, they invested their excess capital in savings, education and the purchase of increasingly high-quality consumer goods. A focus on thrift, education and hard work produced entrepreneurial small companies that drove economic growth.

For a remarkable forty-year stretch after World War II, that model proved largely accurate in many parts of the world. The American, European and Japanese economies drove global growth. And a middle class the likes of which the world had never seen emerged in the United States. American incomes, educational opportunity and home size seemed destined to grow inexorably generation after generation.

Wall Street’s long occupation of the middle class

David Rohde
Oct 13, 2011 22:31 UTC
Last Friday morning, a 24-year-old New Jersey woman told me why she joined Occupy Wall Street. Around her, balding activists in their 50s tried to rekindle 1960s-era protests. Young Marxists flew red Che Guevara flags. The young woman, though, was different. 

She commuted to the protests, she said, while holding down two part-time jobs. She lived at home and helped her schoolteacher mother, who also worked two jobs, support her jobless, 60-year-old father. She asked to be identified only by her middle name – Susan – because she feared her bosses would fire her for attending protests. She didn’t talk of revolution. She talked of correction.

“Like any great nation and country, there are also hitches in the plan,” she told me. “And things that need to be changed.”

Can Confucius save America’s middle class?

David Rohde
Oct 6, 2011 14:45 UTC

Update: Sorry, in the first version of this column I confused two different companies. The corrected version is below.

BOWLING GREEN, KENTUCKY–For decades, this bucolic corner of southwestern Kentucky depended on Corvette sales from the local GM plant for its economic life. Now, it’s trying something different.

Last year, the state university opened a “Confucius Institute” that offers nighttime Chinese language classes to local business people. An American auto parts company chose to create 280 new manufacturing jobs here instead of Mexico. And government officials brag about the 19 companies from India, Japan, Finland, Germany, Israel and other foreign countries that have invested locally.

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