The Dismal State Of the Global Middle Class, In One Chart


If you search the phrase “economic inequality in the U.S.” and look at the images that come up, you will find an abundance of graphs and charts that show just how skewed income distribution is in this country.

One of the first images to appear is this one from the UN Economic Commission for Latin America and the Caribbean:

The bars represent the income of the top 20% of a country divided by the poorest 20%, meaning the longer the bar, the bigger the economic inequality. The United States is in the middle behind Mexico and ­­­­Nicaragua, which are listed as countries with some of the highest levels of corruption as documented in the 2013 Global Corruption Barometer by Transparency International. The report found that 87% of Mexicans believe their public officials are corrupt (the third highest rate of all countries surveyed) and 92% of Nicaraguans claim the police are corrupt (tied for fourth highest). 

One of the next charts to come up shows the difference between what the top 0.01% of earners makes compared to the rest of the American population.

The chart focuses on how the incomes of the top percentiles have grown at a faster rate than the incomes of the remaining population. And this is only from 2000 to 2006.

This recent video, which now has more than 6 million views on YouTube, shows the difference between how Americans think wealth is distributed in the United States versus their ideal and what the reality is. As the video states, “The ideal is as far removed from our perception of reality as the actual distribution is from what we think exists in this country.” The video highlights that the country’s top 1% has more of the country’s wealth than what nine out of 10 Americans believe the entire top 20% should have. 

The video cites a survey done in 2011 by Mike Norton and Dan Ariely, who asked Americans these questions about economic inequality (including their ideal income distribution and what they think that distribution is). After the survey was concluded, Ariely said on his website, “What this tells me is that Americans don’t understand the extent of disparity in the U.S., and that they (we) desire a more equitable society.”

The video also addresses the issue of a CEO’s salary versus that of their average employee. According to the AFL-CIO, the average salary of a CEO at some of the nation’s largest companies was $12.9 million in 2011, making it 380 times more than the salary of a typical American worker

Richard Wolff, currently a visiting professor in the Graduate Program in International Affairs of the New School University in New York City, has written and spoken extensively on the subject of the political economy of the United States. In an article published by The Guardian last week, he draws on historic examples of how capitalism in England, Western Europe, North America, and Japan has created traumatic repercussions for those areas including the deterioration of “working conditions, urban slums, environmental degradation, and cyclical instability.” While capitalism did bring about economic growth, that growth needed to expand beyond these areas, which required, as Wolff puts it, “enlarging its hinterland from the agricultural regions near the industrial centers where modern capitalism began.” 

From there, the world economy changed to supply markets of raw materials, food, and labor supplies, eventually leading to capitalists cutting costs in order to strengthen their competitiveness within the global market. Because these economies were relocating, their original centers suffered in terms of wages and standards of living, even though as Wolff writes, “Competition requires capitalists to raise wages instead in the newer, growing centers, where new sections of better-paid workers arise.” We can now see the effects of this system in cities such as Detroit, Cleveland, and Camden, where decaying plants still barely stand and “middle-class” people struggle to make ends meet.

Frontline offers eight charts to show just how bad it is for the middle class and why. The main reasons are a decrease in overall wages, lower levels of income, fewer union members, lack of full-time work, less jobs at home, rising debt, less savings, and of course, diminishing net worth. 

Although any efforts seem futile at this point, the Center for American Progress Action Fund released a report in March outlining what efforts they believe state governments should undertake in order to rebuild America’s middle class. The report focuses on improving the quality of existing jobs, ensuring the protection of civil rights for the betterment of our economy, reforming the current tax code, stabilizing the housing market, improving education and health care, and strengthening communities. 

Whether or not you agree with all or any of the Center for American Progress Action Fund’s policy ideas, we can all agree that something needs to change before there is no middle class to save.