In the 1950s, our middle class was the wealthiest in the world. This was due to a number of factors, chief among them the fact that in the years following World War II, nearly nine million veterans had taken advantage of the GI bill to secure education, housing and low-cost loans to start businesses. Unions were strong enough to demand a fair share of the fruits of America’s booming economy, and the ethos of the New Deal remained dominant — new public programs arrived to bolster working people’s economic security.
But in today’s New York Times, David Leonhardt and Kevin Quealy report that with most Americans’ wages stagnating over the past 30 years, the US middle class is losing ground globally. Other Western nation’s middle classes are becoming more prosperous than our own.
The American middle class, long the most affluent in the world, has lost that distinction.
While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.
Middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.
The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.
Although economic growth in the United States continues to be as strong as in many other countries, or stronger, a small percentage of American households is fully benefiting from it. Median income in Canada pulled into a tie with median United States income in 2010 and has most likely surpassed it since then. Median incomes in Western European countries still trail those in the United States, but the gap in several — including Britain, the Netherlands and Sweden — is much smaller than it was a decade ago.