The disappearance of America's middle class

recession
Originally uploaded by Milton CJ

There’s a brilliant (and scary) article in Der Spiegel’s English edition.

It’s describing how the middle class in the US is getting poorer and poorer, with the effect that the country will soon have only two groups of people – rich and poor – if the development continues. (The lack of a middle class is, of course, a common trait of many third-world countries.)

Most of the information in the article isn’t new, but it’s still well worth a read.

Although the article is about the US, much of it would apply to the UK and other European countries, at least to some degree.

Here’s what the article has to say about the growth in incomes in the past 30 years:

The boom in stocks and real estate, the country’s wild borrowing spree and its excessive consumer spending have long masked the fact that the overwhelming majority of Americans derived almost no benefit from 30 years of economic growth. In 1978, the average per capita income for men in the United States was $45,879 (about €35,570). The same figure for 2007, adjusted for inflation, was $45,113 (€35,051).

[…]

While 90 percent of Americans have seen only modest gains in their incomes since 1973, incomes have almost tripled for people at the upper end of the scale. In 1979, one third of the profits the country produced went to the richest 1 percent of American society. Today it’s almost 60 percent. In 1950, the average corporate CEO earned 30 times as much as an ordinary worker. Today it’s 300 times as much. And today 1 percent of Americans own 37 percent of the total national wealth.