The Decline of Middle-Income Earner

Below is a report published on Tuesday, May 2, 2006 by the Rocky Mountain News (Colorado)

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Since the election of Ronald Reagan the wealth of the nation has more than doubled. Per capita, Americans are now 70 percent richer than they were in 1979. Where have these several trillion dollars of new affluence gone?

For poor people, the answer is clear: Essentially none of this wealth has come their way. Adjusted for inflation, the tenth percentile of after-tax family income is almost exactly the same today as it was in 1979 - about $13,500 (note this means that 30 million Americans live on even less). For the middle class, the situation is only slightly different. In 1979, the average middle-class family had an after-tax income of $38,000; today that figure is about $43,700, meaning that over the past quarter-century the average American family has seen its income rise by about $200 per year.

For our wealthiest citizens, by contrast, 25 years of Republican rule have made these very much the best of times. During this period, the average after-tax income of the top 1 percent of Americans has risen an astonishing 111.3 percent, from $298,900 to $631,700 per year (again, all these figures are adjusted for inflation).

In other words, in absolute terms the poor are just as poor as they were a generation ago, while a middle-class family's annual share of the last quarter-century's worth of economic growth allows it to buy one extra tank of gas every three months. Meanwhile, in relative terms, both groups are far poorer: indeed, compared to the rich, most Americans are now only half as well-off as they were during the Carter presidency.

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As you know, US is the world's largest economy and many Asian economies rely heavily on US. What's the message that this report is telling us? If you ignore the message, you or your future generations will regret heavily.

So to say, the rich gets richer and the poor gets poorer. The spending power of the rich will affect the middle class and the poor. The average American middle class family has income rise of $200 per year! That's pathetic. We all know that living expenses keep on increasing. When you start a family, you have more expenses. When you age, your medical bill goes up. The cost of daily neccessities increase with time. So does transportation cost!

What's going to happen to the middle-class earners? We call this phenomenon, the thining of middle-income earner. In the future, there will be only two classes: Rich & Poor

This is happening and I cajole you not to remain ignorant. Take responsibility to improve your financial potential. The best way to help the poor is not to be one of them.