The decline of the middle class probably has as much to do with expenses as with income. In the twenty years from 1990 to 2010, wages were almost constant but most expenses rose.
- Groceries up 4.83%
- Rent up 18%
- Homes up 24%
- Cars up 2.6%
- Gas up 47%
- Health care up 79%
- College up 85%
These are statistics, which means they are necessarily generalizations. One reason wages were almost constant is because most folks either had raises or cuts. Childless elderly households are more sensitive to health care. Young people are more sensitive to college costs. In general though, if middle class costs are up and middle class wages are constant, then more of the middle class will be losing wealth which will drive many into lower class. The harsher truth is that the lower class is even more sensitive to expenses, less likely to have received a raise, and is closer to or already in poverty.
(Click on the graphic for the link.)
For my family, the most egregious increased expense is the cost of cyberspace which is increasingly more and more of a necessity. As our communications companies have come together in how to gouge consumers for “digital services” they have raised the basic price to connect to the world. This connection is almost invisible to the economic model, perhaps because it is not a measure of inequality. But 15 years ago I could sign up for a basic cable service to retain simple television capability (5 local channels including public television) for $13.95 per month and had to pay an extra 15.00 fee for land line service. Within ten years all the capabilities had merged, been cross-routed, and repackaged to end up with a 75.00 fee for any service–and loads and loads of service that I neither need nor want. What is the increased living cost of trying to get basic communications service? This basic service in 1970 was determined by social welfare services to be a fundamental necessity for impoverished citizens. How do they fare today with ever increasing costs? Why isn’t this service a fixed priced monopoly? And this capability uses public domain infrastructure for its base, I might add. Who owns the access to cyberspace?
No, it’s not free!
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