EDITOR'S VIEWPOINT/Monkey in the middle
Becoming middle class may be an unimpressive aspiration for my children because it may be harder than ever for them to attain. Preparing for a career
Written by Bill Wolpin
Becoming middle class may be an unimpressive aspiration for my children because it may be harder than ever for them to attain. Preparing for a career and working hard may not be enough. The next generation's journey to reach a spot between the rich and poor will be over weathered and harsh terrain, with a bottom-line destination that is even less friendly to the middle class than it was 40 years ago.
Some of America's baby boomers were just beginning their trip to the middle class four decades ago, but several recessions left casualties along the way, as many of them were unable to keep up. Over the same 40 years, though, the highest wage earners — the top 20 percent — began carrying home a larger share of the bacon than ever before, according to the U. S. Census Bureau.
The agency starts with a pie representing the total income generated and then divides it into five equal groups of earners, plus a sixth for the top 5 percent. Between 1967 and 1990, those in the top 5 percent increased the amount of money they earned by 1 percent to 18 cents on every dollar. The roaring '90s, though, saw 18 cents grow to 22 cents — a 25 percent increase — by 2001 (the latest year of the survey). The top 20 percent of income earners have done well over the last 40 years, too, with that group carrying home 50 cents of every dollar earned in America today versus 44 cents in 1967, a 14 percent increase.
However, if you fall in the next 80 percent of income earners, then your cut of the dollar pie has been shrinking. Over the past 40 years, those in the second highest income category dropped from 24 cents to 23 cents; the third highest group sank from 17 cents to 14 cents; the second lowest income earners took home nine cents versus 11 cents; and the lowest income earners lost half a penny, which, by the way, represents a 15 percent loss of income.
Gains at the top end of the money chain continue, with those having more than $1 million in assets increasing their wealth by nearly 14 percent last year alone. And, according to the most recent data from the Congressional Budget Office, the top 1 percent of income earners now own 57 percent of corporate wealth, up from 39 percent in 1991.
How are we doing down here in the middle class? The Labor Department reported in late January that real wages — adjusted for inflation — went down in 2005. In fact, the median household income has fallen five years in a row.
So, despite an increasing gross domestic product and soaring corporate profits, most Americans instinctively know their fortunes have not been rising. They also sense that they are becoming part of a growing underclass with every shift of the dollar. Therefore, it should be no surprise that in a recent Gallup Poll, 58 percent of Americans said economic conditions are getting worse.
The rich aren't to blame for the way they feel, nor are the poor. The widening gap between them, however, might be.
bill.wolpin@penton.com
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