According to Pew Research Center, in 1971, the majority of all Americans, which is roughly 61%, were middle-class. As of 2021, only 50% of Americans are considered middle-class. The lower class has also grown from 25% in 1971 to 29% in 2021. So how did this all happen?
According to research from the Brookings Institution, the Middle class earns most of their income through wages alone. Among the 25-54 age group in the center income quintile, wages grew just 6% between 1979 and 2019, compared to 9% in the lowest quintile and 31% in the top quintile.
"In recent decades, the American middle class has experienced slow income growth, near-stagnant wage increases, and declining odds of upward mobility," Reeves and Sawhill wrote. "Inequality is not a feeling; it is a fact."
Money is both the lifeblood of America and the root of all evil. According to the Brookings Institution, A tax reduction for the middle-class would help lessen the blow middle-class Americans have suffered due to stagnant wages and increased cost of living.
"Their incomes aren't growing as fast. That's a problem for the economy. It's a problem for our political system — it leads to populism that leads to the kind of divides we're seeing now. And it leads to some cultural divides. It's time to stop talking about just the rich and the poor," said Sawhill, who collaborated with fellow Brookings scholar Richard V. Reeves on the policy proposals.
According to the Brookings Institution, The average middle-class working couple with children now puts in 600 hours more a year than in 1975. A common lament is lack of time. The contract proposes at least 20 days of paid leave for any purpose: Care for a loved one, have a baby, go fishing. Numerous companies already provide that much in various forms, but low-wage workers are less likely to have access to paid leave.
"You can't forget about the majority of the population and still have a strong economy, a strong political system, and a sense of community," said Isabel V. Sawhill, who co-wrote "A New Contract with the Middle Class." "We think especially that the middle class feels left behind. We have data that show they have not been doing as well as either the rich or the poor after taxes and government benefits counted."
The devastation that stagnant wages, lack of opportunity, and monopolies have on the Average American will last decades to come, with the death of the middle class in our foreseeable future.
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