
<p>For a generation, Democrats and others on the left have lamented the loss of the middle class. ; Some Republicans have also addressed that concern. ; They call it “the shrinking middle class.” ; The most offered up solution is government intervention – the political redistribution of wealth.</p>



<p>The inference is that millions of Americans are falling into the lower economic class. ; This belief drives much of the left-wing agenda of more government assistance and opposition to tax reductions to stimulate the economy.</p>



<p>Their theory declares that it is necessary to take money away from wage earners (taxpayers) and provide it to folks in the lowest income brackets. ; That SOUNDS good – rather charitable, in fact. ; But the entire concept is predicated on political advantage for the politicians rather than economic benefit for … for … for anyone.</p>



<h2 class="wp-block-heading">Let’s first take a look at the contention that every year more and more people are falling out of the middle class and into the ranks of the poverty class. </h2>



<p>According to the most authoritative source, the U.S. Census, that is simply not true. In fact, it is the poverty population that is actually shrinking.</p>



<p>The poverty rate in 2019 was 10.5 percent. ; That means that 90 percent of all Americans live above the poverty level. ; That makes the American people the wealthiest in the world in all comparative economic categories.</p>



<p>Purchasing power is a more accurate indicator of wealth – and poverty. ; If you were to categorize the entire world population in terms of buying power, the United States would virtually have no measurable poverty at all. ; The poorest of Americans live far better – and have greater purchasing power – than half the world.</p>



<p>The one group that is shrinking according to government statistics is the poverty class. ; That 2019 figure of 10.5 percent is down from 11.8 in 2018. ; That is the fifth consecutive year that the percentage of those living in economic poverty has declined – a 4.3 percent drop, in fact. ; The poverty rate in 2014 was 14.8. ; The most significant rise out of poverty has been the poorest of the poor within the minority populations.</p>



<p>If the poverty class is shrinking AND the middle class is shrinking, there is only one conclusion. ; A lot of one-time middle-class folks have been entering the upper class. ; That is not surprising. ; Over the years there have been innumerable reports and feature articles about the millionaires next door – people who have amassed significant wealth while working at what might be called ordinary jobs. ; There are store clerks, carpenters, warehouse workers who have retired with significant accumulated wealth, including million-dollar pension funds.</p>



<p>A person’s economic class is not just dependent on what they earned, but what they amassed – their purchasing power. ; Go into any middle-class neighborhood and you will find people with multiple vehicles, boats and summer homes. ; They dine out frequently. ; They take long vacations in exotic places – often out of the country. ; I grew up in what was then called a lower middle class family. ; My parents could not afford any of those luxuries.</p>



<h2 class="wp-block-heading">Some studies suggest that family incomes are growing at a slow rate. </h2>



<p>That may be true. But that may be because as the incomes go up, the RATE of growth naturally descends. If you have a growth rate of 10 percent on an income of $20,000, you get an extra $2,000. If your income is $100,000 a lower rate of growth – let’s say five percent – will get you an increase five times greater, or $10,000.</p>



<p>I understand that there is a hand full of billionaires who are racking up big gains on big incomes, but they are gaining their wealth through ownership – not wages. ; The Zuckerbergs, Musks, Gates, Buffets and Bezos are merely the Rockefellers, Carnegies and Fords of today. ; Their wealth is fabulous, but in many ways unique – and arguably meaningless &#8212; in calculating economic classes. ; There are just too few of them. ; The economy is much bigger than them – regardless of Senator Bernie Sanders obsession with class warfare.</p>



<p>By all historic and contemporary measure, we Americans are a VERY rich people – collectively, the richest on earth. ; Capitalism and free markets are what made us such. ; We will continue to be the richest people on earth if we do not succumb to the utopian and socialist snake oil that somehow government redistribution of wealth is a better plan – when it never has been.</p>



<p>So, there ‘tis.</p>

Why is the Middle Class Shrinking?
