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Harmonized data sets with varying sample sizes....
April 23, 2014 9:46 PM   Subscribe

The American Middle Class Is No Longer the World’s Richest. The American middle class, long the most affluent in the world, has lost that distinction. Comparing income by country. About the data.
posted by blue_beetle (38 comments total) 20 users marked this as a favorite

 
Canadian student loans debt and house prices are crippling folks in their 20s pretty handily, too.
posted by Space Coyote at 9:49 PM on April 23 [7 favorites]


If you're poor, be poor in Europe.
If you're middle class, be middle class in Canada.
But if you want to be rich, be rich in the United States.

So, lesson being: "The poorer you are, the heavier a jacket you should own"?
posted by Kadin2048 at 10:27 PM on April 23 [13 favorites]


Did something interesting happen in 1980?
posted by dhartung at 10:43 PM on April 23 [4 favorites]


Great. All the folklore majors are looking at this going, 'screw moving to Colorado...we should go with the original plan of Amsterdam!!!'.
posted by hal_c_on at 10:44 PM on April 23


Besides Reagan being elected?
posted by empath at 10:45 PM on April 23 [9 favorites]


The best selling book on Amazon, btw, is a dense economics tome, translated from French, about how capitalism is hardwired to bring about economic inequality.
posted by empath at 10:46 PM on April 23 [11 favorites]


"The struggles of the poor in the United States are even starker than those of the middle class." But that doesn't make for such a good headline.
posted by chrisgregory at 10:55 PM on April 23 [1 favorite]


Did something interesting happen in 1980?

Yes, the baby boomers started to hit middle age, and proceeded to use their burgeoning political power to screw everyone younger than them.
posted by overhauser at 10:58 PM on April 23 [5 favorites]


Did something interesting happen in 1980?

Well, according to the ideas in the Picketty book empath linked, ~1980 is when the normal tendencies of capitalism reasserted themselves following two world wars and a depression. (Very briefly, he illustrates in the book that an inherent problem with capitalism is that income from wealth grows faster than income from wages, so without corrections we will always will end up with a tiny elite from inherited wealth holding most of the money and power, with workers getting progressively poorer. This was the situation at the end of the guilded age, and it took the two wars and depression to destroy enough extant wealth to level the playing field, allowing wages to grow faster post-WWII. This only lasted to about 1980. The book is well worth checking out.)
posted by LooseFilter at 10:59 PM on April 23 [16 favorites]


guilded age

Nothing personal- this is just something that bugs me and lately I'm seeing it a lot. It's the Gilded Age, so named because gilding is a thin layer of gold over a base material and the Gilded Age was characterized by a massively, obscenely wealthy upper crust over a huge impoverished working class.
posted by Pope Guilty at 11:04 PM on April 23 [23 favorites]


1980 was also the first national recognition/implementation of supply-side/Reaganomics, which was the first major break with Keynesian economic policies.
posted by 99_ at 11:08 PM on April 23 [3 favorites]


Well, according to the ideas in the Picketty book empath linked, ~1980 is when the normal tendencies of capitalism reasserted themselves following two world wars and a depression. (Very briefly, he illustrates in the book that an inherent problem with capitalism is that income from wealth grows faster than income from wages, so without corrections we will always will end up with a tiny elite from inherited wealth holding most of the money and power, with workers getting progressively poorer.

This go around is going to be exponentially worse, because capital is increasingly being controlled by automated processes, which are entirely motivated by profit and unburdened by conscience. Aside from high-frequency trading algorithms and the like, one of the less remarked upon features of cryptocurrencies is the ability to program in contracts and more complex algorithms that reside in the cloud. You could have AI's hosted in the cloud in control of vast quantities of wealth, not under the control of any individual and with no off button.

Capital is increasingly becoming an end in itself, and I think the pursuit of efficiency will not only reduce workers to paupers, but even capital 'owners' will be left by the way-side as increasingly unnecessary cruft-- already there is a lot of resistance toward paying dividends by many corporations.

The recent supreme court rulings allowing unlimited money to flow into politics from corporate entities is going to cut off one of the few means people have to peacefully resist the corporate take-over of all political and economic power, too. I'm not particularly optimistic about the future.
posted by empath at 11:26 PM on April 23 [15 favorites]


an inherent problem with capitalism is that income from wealth grows faster than income from wages

A corollary problem is that people simultaneously believe:

1.) It takes money to make money.
2.) People with no money could make lots of it if only they behaved responsibly.
posted by compartment at 11:31 PM on April 23 [14 favorites]




The doom and gloom in the NYT comments section -- is it supposed to be America's god-given right to be outrageously richer than the rest of the world?

USA population:
317 million

Population of Scandinavia, Germany, the Netherlands, France, Austria, Canada, UK:
297 million

10th-50th percentile America is like what you'd see by merging together the next dozen richest countries. 50th+ percentile America has no equal. After-tax disposable income is perhaps the strongest metric in favour of the USA.

My issue is the relative tradeoff in other things. Working 25% longer. Tremendous inequality, not just in cash, but in respect. This is a culture that accepts only the exceptional, and (see 5th percentile) seems to spit on the poor. Youth burdened with health and higher education costs...
posted by helot at 11:46 PM on April 23 [3 favorites]


A Rising Tide Lifts Some Boats - "How did we lose the lead? The authors blame three broad factors: (1) Canada's education attainment is outpacing the U.S. and most of the world; (2) American middle-class market wages aren't keeping up with overall economic growth; and (3) Other governments are doing more to redistribute income to poorer families in other countries, particularly in western and northern Europe."

more (piketty reviews ;) here!

oh and fwiw, re: cryptocurrencies & 'automatic corporations'

-The Automatic Corporation
Corporations can be thought of as information-processing feedback loops. They propose products, introduce them into the marketplace, learn from the performance of the products, and adjust. They do this while trying to maximize some value function, typically profit.

So why can't they be completely automated? I mean that literally. Could we have software that carries out all those functions?

Software could propose new products within a design space. It could monitor the performance of those products in the marketplace, and then learn from the feedback and adjust accordingly, all while maximizing its value function... A limited version of what I'm describing already exists. High-frequency trading firms are already pure software, mostly beyond human control or comprehension.
-Bitcoin 2.0: Unleash The Sidechains
The distributed nature of Bitcoin has caused people to speculate about autonomous corporations powered by blockchains, which sounds like a creepy Kafka-meets-Gibson notion if I ever heard one. On the other hand, a company which committed to behaving in a particular way, not with a mere promise, but with an enforceable and cryptographically ironclad contract, might be much worthier of the public's trust than your standard amoral corporation.
also btw, otoh...
Ripple is hard to understand, but it's worth making the effort: there's a deep insight at its core
It amuses me when I see Bitcoin and Ripple discussed in the same context because, for me, they're completely different. The core of Bitcoin is all about building a trust-free decentralized transaction ledger for tracking the ownership and transfer of scarce tokens – Bitcoins. And the whole point of Bitcoins is that they are counterparty-risk-free assets: my Bitcoin is not somebody else's liability.

By contrast, Ripple is all about dealing with assets that are somebody else's liability. So the focus in Ripple is on representing liabilities issued by identifiable issuers and enabling them to be transferred between individuals on a network.
posted by kliuless at 12:34 AM on April 24 [1 favorite]


It's the Gilded Age

Ehrmahgerd and shame on me, I stand corrected.

This go around is going to be exponentially worse

As a life-long optimist, generally speaking, I am shocked to find myself confidently sharing your pessimism. I do not see the awareness nor will among the American people to correct these deleterious trends.
posted by LooseFilter at 1:04 AM on April 24 [1 favorite]


Income inequality in this country is like the weather ...
posted by tgyg at 1:32 AM on April 24 [2 favorites]


Income inequality in this country is like the weather ...

How so?
posted by Pope Guilty at 1:36 AM on April 24


Income inequality in this country is like the weather ...

Republicans are totally denying the fact that it's getting worse and we're causing it?
posted by oneswellfoop at 1:54 AM on April 24 [27 favorites]


How so?

Everyone talks about it, but nobody ever does anything about it?
posted by GenjiandProust at 1:59 AM on April 24 [7 favorites]


Yes, the baby boomers started to hit middle age, and proceeded to use their burgeoning political power to screw everyone younger than them.

Facile but incorrect. The midpoint of the boomer generation was in their mid-twenties in 1980.

The '80s saw the decline of unions and the rise of the "greed is good" Wall Street guys. Oh and the Laffer curve was actually given a test run by the Reagan administration.
posted by mygoditsbob at 2:08 AM on April 24 [3 favorites]


This go around is going to be exponentially worse, because capital is increasingly being controlled by automated processes, which are entirely motivated by profit and unburdened by conscience. Aside from high-frequency trading algorithms and the like, one of the less remarked upon features of cryptocurrencies is the ability to program in contracts and more complex algorithms that reside in the cloud. You could have AI's hosted in the cloud in control of vast quantities of wealth, not under the control of any individual and with no off button.

...

The recent supreme court rulings allowing unlimited money to flow into politics from corporate entities is going to cut off one of the few means people have to peacefully resist the corporate take-over of all political and economic power, too. I'm not particularly optimistic about the future.
posted by empath


Moral of the Story: Be nice to your smartphone, it may eventually vote itself into the presidency... or at least a really charismatic Deibold machine. Prediction from the future: Skynet doesn't turn out to be a military machine - it turns out to be an electronic stock trader and investment banking system hell bent on manipulating currency and savings to maximize cash flow in one direction and subdue the general public...


oh wait.
posted by Nanukthedog at 3:43 AM on April 24 [2 favorites]


Canada is also in the middle of a housing bubble, allegedly with a subprime boom. I don't see any reason why the US should have the right to be #1, but I worry that we'll soon be back in that spot.

On the other hand, Canada has a tighter rein on its banks. So there's hope yet
posted by anotherpanacea at 4:02 AM on April 24


I don't see any reason why the US should have the right to be #1

Because if it's not #1, while keeping its status as the largest economy, democracy is failing in one of the largest and oldest democracies. The needs of the people are being thwarted through quasi-legal means - regulatory capture, voter suppression, gerrymandering, unlimited political donations (aka legal corruption).

If that doesn't worry the hell out of you as the democracy next door, you need to keep an eye on what the "post-democratic" governments in Russia and Africa are up to. If American democracy falls, it will bring a huge swath of the developed world into social and economic chaos and perpetual repression.
posted by Slap*Happy at 5:05 AM on April 24 [2 favorites]


> 1980 was also the first national recognition/implementation of supply-side/Reaganomics

Reagan took his oath of office in late January of 1981; Jimmy Carter was President for the entirety of 1980 despite losing the election that year.
posted by ardgedee at 5:09 AM on April 24 [1 favorite]


I don't see any reason why the US should have the right to be #1

Because if it's not #1, while keeping its status as the largest economy, democracy is failing in one of the largest and oldest democracies. The needs of the people are being thwarted through quasi-legal means - regulatory capture, voter suppression, gerrymandering, unlimited political donations (aka legal corruption).

If that doesn't worry the hell out of you as the democracy next door, you need to keep an eye on what the "post-democratic" governments in Russia and Africa are up to. If American democracy falls, it will bring a huge swath of the developed world into social and economic chaos and perpetual repression.


so...it's too big to fail?
posted by Legomancer at 5:25 AM on April 24 [1 favorite]


Canada is also in the middle of a housing bubble, allegedly with a subprime boom. I don't see any reason why the US should have the right to be #1, but I worry that we'll soon be back in that spot.

On the other hand, Canada has a tighter rein on its banks. So there's hope yet


Canada's housing bubble and debt-to-income ratio are arguably worse right now than the U.S.'s were at any point leading up to 2008. If you adjust for the ridiculous housing prices in Canada, the U.S. is probably still ahead.

And I'm not so sure that Canada has a tighter rein on its banks. They are likely to remain solvent, but many of their customers probably won't be so lucky.
posted by one more dead town's last parade at 5:29 AM on April 24


so...it's too big to fail?

Well...Too big for, roughly, 1% to fail.
posted by Thorzdad at 5:40 AM on April 24 [1 favorite]


I'm not really seeing that educational attainment is an explanation for the drop in relative prosperity of the middle class. If US education is falling behind that of other nations, that should affect the whole nation's prosperity, but we're told the US remains the wealthiest large country. For education to impact one class, you'd need middle class schools to be falling behind those of the wealthy, something not touched on here.

So far as I can see America is the only advanced nation in which equality of income does not really feature as an objective within mainstream political discourse. Of course these days it's not top of the list anywhere, but it's not just absent the way it is in America.
posted by Segundus at 5:52 AM on April 24 [1 favorite]


I'm not sure I can find a Nelson GIF that's large enough to express the deep and powerful emotions I am feeling.

...maaayyybe if I could project it on the bottom of clouds. Or possibly on the side of every building in every small to midsize town in the nation.
posted by aramaic at 6:04 AM on April 24 [1 favorite]


I suppose this piece might be an example of how concerns about equality have to re-clothed as patriotic indignation that ordinary Americans can no longer take it for granted when visiting, say Turkey, that their domestic appliances will outclass those of other nations, in order for those concerns to get favourable attention in a US context.
posted by Segundus at 6:04 AM on April 24


A corollary problem is that people simultaneously believe:

1.) It takes money to make money.
2.) People with no money could make lots of it if only they behaved responsibly.


I expect they just give point 2 lip service without actually caring if it's true.
posted by Foosnark at 6:38 AM on April 24 [1 favorite]


The best selling book on Amazon, btw, is a dense economics tome, translated from French, about how capitalism is hardwired to bring about economic inequality.
posted by empath


Discussed previously on Metafilter:
listen to the wealthy scream; Everything old is new again.
posted by ZeusHumms at 6:50 AM on April 24 [1 favorite]


The best selling book on Amazon, btw, is a dense economics tome, translated from French, about how capitalism is hardwired to bring about economic inequality.

From my ISP it is out of stock. It has always been out of stock when I have looked. It shows up as number one on the bestseller list. I do not get this.
posted by bukvich at 6:55 AM on April 24


Meanwhile, in Canada, the Liberal party has been making the ailing fortunes of the Canadian middle class a key plank in its platform. And they're not wrong to do so: the US middle-class has been doing poorly and Canada's statistics are given a boost by some unsustainable conditions that surely can't endure for much longer.
posted by erlking at 9:37 AM on April 24


If Canada (and specifically Toronto)'s housing bubble ever actually pops - and I mean a *real* pop, not some 5% "correction" - my assumption is that society will have collapsed and we'll all be too busy killing each other for canned goods to worry about anything else.
posted by The Card Cheat at 11:36 AM on April 24




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