Sunday, March 10, 2019

The Shrinking Middle Class

I read an article once that said one third of middle class children slip out of the middle class and end up in bad financial circumstances.  I  have seen that happen.  I ran across a nice article by Charles Hugh Smith, Honey, I Shrunk the Middle Class: Perhaps 1/3 of Households Qualify.  I lifted this chart from it:
The illustration indicates that in 1971 the majority of families were in the middle class, but that is not the case in 2015.  If you look at the numbers,  the middle class actually grew in size, but the upper and lower economic classes grew more proportionally.  The fraction of families in the middle class is no longer the majority, but the number of families in the middle class still grew.  This shows how numbers can be interpreted in opposite ways.  The middle class is shrinking!  The middle class is growing!  Both statements are true, depending on your criteria.

The analysis by Mr. Smith is worth your time.  He also wrote another article worth your time and consideration: What Killed the Middle Class?    If we want our kids to be successful, we need to define success; we need to have a good idea of what it means to be in the middle class and what threatens our children staying in the middle class.