The American Middle Class Is No Longer the World’s Richest

David Leonhardt and Kevin Quealy, New York Times, April 23, 2014

The American middle class, long the most affluent in the world, has lost that distinction.

While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.

After-tax middle-class incomes in Canada–substantially behind in 2000–now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.

Although economic growth in the United States continues to be as strong as in many other countries, or stronger, a small percentage of American households is fully benefiting from it. Median income in Canada pulled into a tie with median United States income in 2010 and has most likely surpassed it since then. Median incomes in Western European countries still trail those in the United States, but the gap in several–including Britain, the Netherlands and Sweden–is much smaller than it was a decade ago.

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The income data were compiled by LIS, a group that maintains the Luxembourg Income Study Database. The numbers were analyzed by researchers at LIS and by The Upshot, a New York Times website covering policy and politics, and reviewed by outside academic economists.

The struggles of the poor in the United States are even starker than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true.

LIS counts after-tax cash income from salaries, interest and stock dividends, among other sources, as well as direct government benefits such as tax credits.

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Median per capita income was $18,700 in the United States in 2010 (which translates to about $75,000 for a family of four after taxes), up 20 percent since 1980 but virtually unchanged since 2000, after adjusting for inflation. The same measure, by comparison, rose about 20 percent in Britain between 2000 and 2010 and 14 percent in the Netherlands. Median income also rose 20 percent in Canada between 2000 and 2010, to the equivalent of $18,700.

The most recent year in the LIS analysis is 2010. But other income surveys, conducted by government agencies, suggest that since 2010 pay in Canada has risen faster than pay in the United States and is now most likely higher. Pay in several European countries has also risen faster since 2010 than it has in the United States.

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Americans between the ages of 55 and 65 have literacy, numeracy and technology skills that are above average relative to 55- to 65-year-olds in rest of the industrialized world, according to a recent study by the Organization for Economic Cooperation and Development, an international group. Younger Americans, though, are not keeping pace: Those between 16 and 24 rank near the bottom among rich countries, well behind their counterparts in Canada, Australia, Japan and Scandinavia and close to those in Italy and Spain.

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  • MekongDelta69

    Obviously – b/c a large chunk of our money goes to the DIE-versity crowd. I mean, we can’t actually have them DOING anything for themselves to get off the welfare couch, now can we?

    • AndrewInterrupted

      They do just as much damage as useless diversity darlings in the workplace as they do scammin’ sitting on the couch. At least they’ve mastered couch sitting!.. <;-D

    • The Paleo Conservative

      Stawp oppressing me with your white privilege and welfare checks!

  • Garrett Brown

    “Americans between the ages of 55 and 65 have literacy, numeracy and
    technology skills that are above average relative to 55- to 65-year-olds
    in rest of the industrialized world, according to a recent study by the
    Organization for Economic Cooperation and Development, an international
    group.”

    Most likely the last generation that was a product of when America was the greatest country in the world for education and opportunity. The 50s, 60s, and early 70s when these people went to school, their own agendas had not yet started to fully take place.

  • Again, I’ll post the Drudgetaposition from yesterday. Four immigration stories above the main dish. You might think that Matt Drudge thinks they’re related factors. Then again, I think they’re related factors.

  • So CAL Snowman

    Obviously the solution to this problem is to grant amnesty to 35 million invaders and throw the borders of the Former United States wide open.

  • Jesse James

    Good to see that Agenda 21 is progressing as planned.

  • dd121

    Hasn’t this been a major goal of the left for at least a generation? The next stock market crash and imploding dollar will be the end of the wealth of the middle class. It’s not an accident.

  • Export jobs, import muds, devalue the dollar through QE. Surely that will make everyone a millionaire. I think I’ll break out in a chorus of “Happy days are here again…”

  • Marc Zuckurburg

    This is a cause for celebration.

    Everything is proceeding as planned.

    • Bossman

      Really? How so? Cheap red wine? I happen to like that stuff. Please explain.

      • MBlanc46

        Only on the broadest definition does Mogen David (or David Logan as my wife’s late great aunt used to call it) count as wine.

    • Magician

      Time to celebrate with your beautiful Asian wife!

  • Tom Mixx

    When I look at many older people, I wonder if many of them have any inkling how low their children and grandchildren are going to sink.

    • MBlanc46

      Some of us do, and it sends cold chills down our spines. Or perhaps that’s white-hot bolts of anger at the elites who have done this to us.

      • IstvanIN

        Some people here have said they are thankful they are older and will be dead before the worst comes. Death provides me with no solace because I grieve for my child, grandchild, nieces, nephews and cousins children and grandchildren, all who will suffer long after me. In fact, even my mother, not an insightful woman, has brought this same fear to my attention.

        • MBlanc46

          I have said such a thing; having no direct descendants, my connection to the future is less than yours.

  • kjh64

    There are so many Mexicans pouring in which is the cause of America’s income inequality, yet nobody links immigration to this. Also, so many of the kids in today’s schools are Mexicans, it’s no wonder the US lags in education stats.

  • IstvanIN

    Not to sound like a broken record (scratched CD?) but this is exactly what the Bushes and their ilk want, a Latin American society with a small elite lording over a vast peasantry.

  • archer

    To find out what is really going on you have to untangle the bureau of labor and statistics website, which I tried once. In ’96 according to my union magazine in the trade I was in then, we were ranked 12th under Italy in worker compensation, the highest at that time was Norway. We’ve been underpaid compared to the rest of the first world for a long time.

  • Fathercoughlin

    I am going to convert to Judaism

  • Kit Ingoldby

    Having lived and worked in the USA, the UK and Australia I can safely say that the standard of living in the USA is not nearly as good as people make out, I simply would not want to go back there.

    The USA is a nation with a small class of very wealthy and a large middle class which is being progressively squeezed while being lied to about how well off they are in comparison with other nations. The middle class standard of living is better in Australia, the UK and in Western Europe than it is in the USA and that is because of the deliberate actions of the cheap labour lobby in encouraging mass 3rd world immigration.

  • Dale McNamee

    So much for Obama helping the ‘middle class”…
    How many “middle class” voters elected him ?

  • Truth Teller

    Wages have stagnated since the mid 1970’s. What does one expect?

  • Alec Smart

    This is directly caused by the Federal Reserve, and has been done with purpose.

    And the politicians are all working for the bankers and globalists.

  • Anglo

    Powerful global investment banking families keep their hold on the global economy. They create financial boom and bust cycles to advance their objectives.

  • Raymond Kidwell

    I can tell you why. Dropping I.Q.s of average people along with higher population competing for resources. When my grandpa drove a truck in the 1970s he made huge money. I would consider it borderline rich. He didn’t need to go to school for it. They just trained you. You didn’t need a CDL either. Today if you want to drive a truck you must go into debt going to school for it. Then when you do get a job the pay is a fraction of what it used to be and the employers treat you like you are scum.

    And if you wanted to be a surgical tech or sonographer in the 70s you got hired on a hospital and they trained you on the job. Today it requires a two year degree (three years worth of classes) and they can only take “the best”. Has the job become harder? Not really. The people competing for the job have become dumber.

    If you want to manage a shoe store in the 1970s you worked there for a couple of years, got trained on the paper work and managed the store. You made really good money. Now days you must get a four year degree to do the same job.

    What has happened for one is that low I.Q. whites have a lot more children than high IQ whites so the white race has been on the decline. But this is made much worse by the huge explosion of low ability minorities breeding as well (and the few minorities with a brain have few children). So when you live among a bunch of idiots its hard to be treated like anything but. As a result if you want a simple job you now need an advanced degree to prove you’re not retarded. If you want to live in a crime free neighborhood you better build a wall and pay a million dollars to live in a gated community with armed guards at every corner (when in the 70s you could pretty much live anywhere and not fear for your life or possessions). What was considered an average person in 1950 is now a member of the “elite” today. What was average of the 50s now is some kind of genius.

    Not only that but busses don’t run on time, if you hire someone to paint your house or something he’s probably a meth head and will mess up a simple job. Restaurants can barely find people intelligent enough to mop a floor or show up to work every day. It all has its roots in the dysgenic trends of society.

    And you simply say something like “a meth head shouldn’t be allowed to have children. Shouldn’t be allowed to give her children brain damage or have them born as drug addicts” and people are hostile towards you. They seemingly don’t care about innocent victims. All they care about are retarded people, drug addicts, low IQ, under performing minorities etc. That’s why I want to form a group of competent people and live as a disapora. I don’t feel our society is competent enough to survive.

    There’s plenty of opportunity out there if you can somehow separate from the mainstream idiot masses and their absurd Marxist culture.

    • Magician

      And a lot of “factory jobs” went overseas to China and other developing Asian countries. Back then, everything was made in U.S.A. and money was waiting for any American person who rolled his or her sleeves up.

      How often do we see “Made in U.S.A.” nowadays?

      And e-mailing and instant messaging have many benefits such as taking virtually no time to be sent and not costing anything. It is also acclaimed by environmentalists. But it has been a massive blow for the postal industry and paper based industry. They are losing tens of millions of dollars every year and laying off thousands of people every year