Middle Class Economics
Updated 6/19/18 
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Wealth Inequality Analysis

Is Change in Median Wealth Growth Needed?
1. Class Structure Must Be Defined
2. Recent Income and Wealth Distributions
3. Home Ownership: Entry Into Middle Class
4. Since 1917 Extremes Got More GDP Pie
5. Middle Class Share Declined
6. Has Safety Net Adjusted Enough?
7. Analysis Will Trump's Trickle  Down Work?

Discussions Questions

Where Have All the Good Jobs Gone?

Will Inflation/Growth Solve Pay Deficit?

Will Debt Bring Down US Capitalism?

 


Preface: Is a Change in Wealth
Growth Needed?

Source  See  The Great Recession Casts a Long Shadow on Family Finances

 

 
 

1.Class Structure Must Be Defined
Upper Aristocracy, Really Wealth People
Upper Middle Very Successful Professionals and  Business Owners
Middle Middle Successful Professionals and  Business Owners
Lower Middle Low Paying White Collar Service Workers
Lower Laborers, Part Time and Unemployed
   

 
   

Source   See Forget the top 1% — Look at the top 0.1% and How Much Income Puts  You in the Top 1%, 5%, 10%?

 

   
 
 

2. Recent Income and Wealth Distributions

From Wolff (2014); only mean figures are available, not medians. 
Note that income and wealth are separate measures;  so, for example, the top 1% of income-earners is not exactly the same group of people as the top 1% of wealth-holders, although there is considerable overlap.  Source Wealth, Income, and Power by G. William Domhoff is extensive.
See
The Numbers Game: How's The Middle Class Doing
 

Table 1: Income and net worth in the U.S. by class, 2013 Editors Note: Mean is Higher than Median
vv
  Mean household income Mean household net worth
Top 1 percent Upper Class
 
$1,679,000 $18,623,400
Top 20 percent
Upper Middle
$257,200 $2,260,300 Upper Middle
60th-80th percentile
Middle Middle
$76,500 $236,400
40th-60th percentile 
Middle Middle

$46,000

$68,100
Bottom 40 percent
Lower Middle and Lower Class
$20,300 -$10,800

Current Discussion on the wellbeing of the "middle class is about this group
though most people consider themselves "middle class!

 

 

Reassessing the Facts Inequality, Poverty, and Redistribution

Income Adjusted for Governments

Bottom quintile earnings share rose from  2.2% to 12.9%
Second quintile share rose from 7% 13.9%
Third
quintile middle-income quintile rose from 12.6% to only 15.4%
Fourth quintile’s share fell from 20.5% to 18.6%
Top quintile share fell from 57.7% to 39.3%
.

Top to bottom multiple dropped from 26 times to three times

In addition work effort increased moving up the income ladder as more family members worked and more worked two jobs. Calculations

Original Source 

 
 

 

 
 

 


 

3. Home Ownership: Entry Into the Middle Middle Class

   
   

Historical Homeownership Rate 1890 through 1970
Note: Home ownership stayed at  about 45% until WW2 pushed it to 60%
This was a major increase and it created the Middle Middle Class

   
   

Homeownership Rate

01/01/1890 47.80%
01/01/1900 46.70%
01/01/1910 45.90%
01/01/1920 45.60%
01/01/1930 47.80%
01/01/1940 43.60%
Homeownership Rate
Date Homeownership
01/01/1945 53.20% WW2 Prosperity, VA Loans
01/01/1950 55.00%
01/01/1956 60.40%
01/01/1960 61.90%
01/01/1970 62.90%
   
 

 
 

 

Greed Stopped Progress

Source  See Causes of the Great Recession
 

 
  4. Since 1917 the Extremes Got More Economic Pie

Urban Institute Believes Upper Middle Class is the Big Winner
See
The Growing Size and Incomes of the Upper Middle Class
6/16
 

 
  5. Middle Class Share of Declined

 

 
6. Has Safety Net Adjusted Enough

Source

Editor's Note:

A similar analysis adding the present value of Medicare and Social Security
to welath would be interesting.

Trump Voters looked out the window, saw the giveaway,
new many got more than them and voted accordingly.
 

 

 

 

7. Analysis Will Trump's Trickle  Down Work?
If Not, 3 Deep Do Do
Too early to measure. The chart below is one criteria
See Middle-Class Plight

 
  incomea2014