Is The Middle Class Eroding? You Weigh In
This is a follow-up to Monday's "St. Louis on the Air" show about the middle class. Hear the audio from that show and read Kyle Jacoby's story to find out what the experts said about the middle class, the economy and the American Dream.
You've heard it before: The rich get richer while the poor get poorer. But what about those in the middle?
Economist Steven Fazzari of Washington University in St. Louis said a statistical definition puts 50 percent of the median in the middle class. But there’s a romanticized version, too.
What is "middle class"? Steven Fazzari of @WUSTL says it's tricky to define. In society, "it's more tied to the American dream," he says.— St. Louis on the Air (@STLonAir) July 28, 2014
The middle class has been shrinking for decades, Fazzari said. Income growth slowed in late '70s and early '80s, becoming stagnate at the lower part of the income spectrum while accelerating at the top.
"The middle is being hollowed out," says Steven Fazzari. There's a doughnut effect.— St. Louis on the Air (@STLonAir) July 28, 2014
Similarly, labor union membership is down, said Bob Soutier, president of the Greater St. Louis Labor Council.
Bob Soutier, president of the Greater St. Louis Labor Council, says lower union membership is down. "We are the middle class."— St. Louis on the Air (@STLonAir) July 28, 2014
According to inequality.org, the 400 wealthiest Americans are worth $2 trillion — more than the combined net worth of half of all Americans.
“In today’s global economy, it’s no longer efficient to funnel trillions to giant corporations and billionaires while relying on their benevolence to spend it wisely within our borders,” Madonna Laws-Lowell of Crestwood wrote in an email. “While the mega rich spend their tax breaks buying $2 labor in China, the banks waste their bailouts on bonuses and the polluters lobby for lower regulations, we use our income at the local grocer, the local auto mechanic and the local carpenter."
@STLonAir @stlpublicradio @JosephEStiglitz says #inequality results from public policies we can change right now! http://t.co/VIXEi4EXFY— Douglas C Duckworth (@ifelsefi) July 28, 2014
We asked for you to join our discussion on the middle class, which launched several conversations about jobs: Availability, types of and pay for.
“How can we have a strong economy and national wealth without a healthy manufacturing sector and a balance of trade?” John Carr of St. Louis County asked via email. “And by manufacturing, I mean it in the broadest sense — everything from added value from software to steel.”
Soutier agreed, but Fazzari said technology has permanently changed manufacturing.
"We need to start building again," says Bob Soutier. Because of technology, Steven Fazzari says manufacturing is not the future.— St. Louis on the Air (@STLonAir) July 28, 2014
“People seem to be steering toward higher quality and experience across the board,” said Sarah McGarry in an email. “I hire in the manufacturing industry, and it’s hard to find the skilled workers we need. It seems like an attitude problem. Workers just don’t seem to want a factory job or to eat at McDonald’s anymore.”
Vocational training offers many benefits, says Steven Fazzari, but it's not a panacea.— St. Louis on the Air (@STLonAir) July 28, 2014
Fazzari said a better solution is to increase wages for those who work in the service industry.
“You might argue there aren’t that many workers at the minimum wage, but I think it does have an important impact on the bottom part of the income distribution,” Fazzari said. “People who are making a little bit above the minimum wage are likely to see their incomes go up.”
He said a domino effect would lead to increased spending, the key to a thriving economy.
@STLonAir Yes. The middle class can't grow without a path into it and without upward pressure on median wages. Raising min wage does both.— Matt Frederick (@mattfredstl) July 28, 2014
@STLonAir Yes. Consumer spending drives the economy/job growth but need the expendable income to make that happen.— that Death will tremble to take us (@WJohnson68) July 28, 2014
Chris Muller, an expert in the field of corporate restaurant management and professor at Boston University, agreed, saying the basic principles of capitalism rely on investing in labor to get a proper return in capital.
”We have to be able to sell what we make, and in order to do that we have to have people make wages that can buy things,” he said.
Using the fast food industry as an example, Joe Niblock said in an email that employers could do even more: “Do any of the restaurants offer the minimum wage workers tuition reimbursement or any type of assistance? My guess is no. It’s all about turnover. There is a very small chance of any non-manager fast food worker to get ahead or promoted.”
In June, Starbucks announced it would foot the tuition bill for some employees attending Arizona State University.
Fazzari also said today’s minimum wage would be more than $20 per hour if it had kept pace with inflation and increased productivity.
@STLonAir It seems like stagflation is the new norm since the Great Recession. My pay rate has been stagnant. Inflation is still occurring.— Tennavan (@tennavantv) July 28, 2014
@STLonAir In some cases, take home income is shrinking as healthcare gets more expensive & employers pay in less on behalf of employees.— Tennavan (@tennavantv) July 28, 2014
Does inflation matter? Steven Fazzari says it's very low now and has been since the mid-'90s. "It's not the root of the problem," he says.— St. Louis on the Air (@STLonAir) July 28, 2014
Join the conversation: Send an email to email@example.com, or a tweet to @STLonAir.
St. Louis on the Air discusses issues and concerns facing the St. Louis area. The show is produced by Mary Edwards and Alex Heuer and hosted by veteran journalist Don Marsh.