Edited by Lydia Dallett
The Decline of the Middle Classes
The American middle class is shrinking and becoming more impoverished at the same pace that middle classes in emerging countries like Brazil, China, India and Russia are expanding, prospering and thrive. A survey conducted by the Pew Research Center has clearly detected this highly fascinating modification in the curve of social mobility that also coincides with U.S. hegemony around the world. It also corresponds with the first decade of the twenty-first century: a decade denominated by central psychological studies as the “lost decade.” It’s no wonder: The middle class has decreased from 61 percent of U.S. society to 51 percent. Its annual revenues have decreased from $72,956 to $69,487, approximately a 5 percent [drop.] Its wealth (assets minus debts) has shrunk still more, from $129,582 to an average of $83,150, a 28 percent drop. This trend is probably also taking place in Europe and certainly in Spain.
The survey has a clear electoral motivation, coming just two months before the presidential election. Hence, the participants in the survey were asked about the reasons for this impoverishment to see how it may influence behavior at the polls. A full 62 percent of respondents put the blame on Congress, which has become an insurmountable obstacle to the decisions and policies against this crisis. 54 percent blame banks and financial institutions, which are at the origin of the crisis; 47 percent put the blame on businesses; 44 percent blame the legacy of Bush; and 34 percent blame the decline on the Obama administration. Only 8 percent is attributed to the middle classes themselves, and 34 percent [is linked] to foreign competition.
These latter reasons deserve special attention. Nothing has favored the creation of wealth in Europe and the U.S. more than economic globalization; falling wages has allowed the relocation or expansion of consumption through the creation of global markets. However, it is now clear that those who have taken full advantage of this process, at least in the last decade, are the richest in the wealthy countries and the middle classes in emerging countries. Their wealth has precisely come at the expense of American and European middle classes. If the distribution of the global pie has to be constantly devoted to the bulk of the population - in other words, to the middle classes - then the wages, wealth and government welfare should decline in Europe and the U.S. for it to increase in Brazil, Russia, India and China.
The survey has a clear electoral motivation, coming just two months before the presidential election. Hence, the participants in the survey were asked about the reasons for this impoverishment to see how it may influence behavior at the polls. A full 62 percent of respondents put the blame on Congress, which has become an insurmountable obstacle to the decisions and policies against this crisis. 54 percent blame banks and financial institutions, which are at the origin of the crisis; 47 percent put the blame on businesses; 44 percent blame the legacy of Bush; and 34 percent blame the decline on the Obama administration. Only 8 percent is attributed to the middle classes themselves, and 34 percent [is linked] to foreign competition.
These latter reasons deserve special attention. Nothing has favored the creation of wealth in Europe and the U.S. more than economic globalization; falling wages has allowed the relocation or expansion of consumption through the creation of global markets. However, it is now clear that those who have taken full advantage of this process, at least in the last decade, are the richest in the wealthy countries and the middle classes in emerging countries. Their wealth has precisely come at the expense of American and European middle classes. If the distribution of the global pie has to be constantly devoted to the bulk of the population - in other words, to the middle classes - then the wages, wealth and government welfare should decline in Europe and the U.S. for it to increase in Brazil, Russia, India and China.
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