NEW YORK : For the first time in decades, middle-income Americans are no longer the richest middle class in the world, according to a new report.
Once the juggernaut of the American economy, the middle class has finally lost its position as the richest in the world, The New York Times said, citing an analysis of survey data going back 35 years.
It said that the middle class in the United States has fallen behind Canada’s middle class. While economic growth in the US is equal to or stronger than growth in other countries, those gains have gone almost exclusively to the wealthiest Americans. America’s middle class is still wealthier than corresponding demographics in Europe, but the gap has narrowed significantly in the last 10 years.
Meanwhile, the poor in the US are significantly worse off than their counterparts in Europe and Canada—a total reversal from 35 years ago.
Median income in the US, about $74,000 a year after taxes for a family of four, rose by 20% between 1980 and 2000 but has since remain mostly unchanged, according to the Times analysis. Median income in Canada, in contrast, rose by 20% between 2000 and 2010 alone.
“The idea that the median American has so much more income than the middle class in all other parts of the world is not true these days,” Lawrence Katz, a Harvard economist not associated with the study, told the Times. “In 1960, we were massively richer than anyone else. In 1980, we were richer. In the 1990s, we were still richer.”
The analysis blames the struggles of the middle class on stagnating education attainment, higher executive pay, lower minimum wage and weaker unions, among other factors.