{"id":98161,"date":"2014-11-21T08:15:45","date_gmt":"2014-11-21T13:15:45","guid":{"rendered":"http:\/\/www.cals.ncsu.edu\/agcomm\/news-center\/?p=98161"},"modified":"2014-11-21T08:15:45","modified_gmt":"2014-11-21T13:15:45","slug":"you-decide-whats-happening-to-the-middle-class","status":"publish","type":"post","link":"https:\/\/cals.ncsu.edu\/news\/you-decide-whats-happening-to-the-middle-class\/","title":{"rendered":"You Decide: What\u2019s happening to the middle class?"},"content":{"rendered":"

Dr. Mike Walden<\/strong><\/p>\n

North Carolina Cooperative Extension<\/strong><\/p>\n

During the campaigns leading up to the recent elections, we heard a lot about the middle class. Many \u2013 if not most \u2013 candidates tailored their messages and promises to helping those in the middle class improve their lives.<\/p>\n

Why was this? One answer comes from political science and is termed the \u201cmedian voter strategy.\u201d This strategy simply says that in an election \u2013 especially a general election rather than a primary \u2013 candidates should craft their messages to appeal to the average (median) voter. If most people don\u2019t like \u201cextreme\u201d positions (too far at one of the political spectrum or the other), then the notion is a \u201cdown the middle\u201d message will appeal to the largest number of voters.<\/p>\n

A second answer is an offshoot of the first, but maybe more direct. In modern America, the middle class has been where the votes are. Traditionally, the majority of Americans have considered themselves to be middle-class \u2013 regardless of whether they actually were middle-class by statistical measures. Hence, a candidate who concentrates on middle-class issues and concerns will be going where the votes are.<\/p>\n

The third answer is less politically oriented and more economically focused. It is that there are real problems in the middle class \u2013 problems that are relatively new and which threaten the very existence of the middle class as a large and viable entity. Therefore, politicians are giving so much attention to the middle class because it is in trouble.<\/p>\n

In this column I will examine this third possibility. The first step is defining \u201cmiddle class.\u201d Obviously the term implies households in the \u201cmiddle,\u201d especially of the income distribution. But how broad is the middle, and where does it begin and end? There are many answers and measures. Here, I will define \u201cmiddle class\u201d as households earning between $35,000 and $75,000, which puts a spread around the average (median) household income of approximately $50,000.<\/p>\n

Using this definition we can quickly see one issue: The middle class has been getting smaller. In North Carolina between 2007 and 2012, the percentage of households defined as middle-class (by the above definition) declined from more than one-third of all households to just above 30 percent.<\/p>\n

The earnings of middle-class households have also been dropping in the last five years. After adjusting for inflation, middle-class households experienced a 7 percent fall in income. This was a decline twice as much as for those at the top of the income ladder, but it was smaller than the loss for those at the income ladder\u2019s bottom rung.<\/p>\n

Middle-class households are also stressed by some of the spending challenges they face. Many middle-class households naturally want their children to attend and graduate from college, because they know a college degree is one of the best tickets to a good standard of living. But it\u2019s been well documented that college costs and college debt have both been rising rapidly (although it should be recognized that North Carolina\u2019s public universities have some of the most affordable tuitions in the nation). Also, there is uncertainty about where health insurance premiums are headed.<\/p>\n

Middle-class households face changes in the workplace, as well. Traditionally among the largest employers of middle-class workers were factory jobs. But for several decades, factory jobs have been replaced by machines and technology. Other middle-income positions \u2013 in sales, finance and even management \u2013 may be on the chopping block in the future. Economists actually have a term for the replacement of labor by machines and gadgets: \u201ctechnological unemployment.\u201d It likely will continue.<\/p>\n

Plus, there\u2019s maybe even a bigger reason to worry about the stability of the middle class. Historians tell us authoritarian rule was replaced by democracies when the middle class developed and expanded in countries. So if the middle class shrinks \u2013 leaving an upper class and lower class but not much in-between \u2013 there may be reason to worry about our political system.<\/p>\n

So what\u2019s the answer to strengthening the middle class? Many think the ultimate answer is education \u2013 making sure individuals have opportunities for training for middle-income jobs, and opportunities to be re-trained and re-educated for different jobs when necessary.<\/p>\n

The middle class is at the heart of most successful modern economies and political systems. Saving, protecting and even expanding the middle class may be the issue of the century. You decide!<\/p>\n

 <\/p>\n

Dr. Mike Walden<\/strong> is a William Neal Reynolds Distinguished Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of North Carolina State University\u2019s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The College of Agriculture and Life Sciences communications unit provides his You Decide <\/em>column every two weeks.<\/p>\n

 <\/p>\n

Previous columns are available at http:\/\/www.cals.ncsu.edu\/agcomm\/news-center\/tag\/you-decide<\/a><\/p>\n

Related audio files are at <\/em>http:\/\/www.cals.ncsu.edu\/agcomm\/news-center\/category\/economic-perspective<\/a><\/p>\n

 <\/p>\n","protected":false,"raw":"Dr. Mike Walden<\/strong>\n\nNorth Carolina Cooperative Extension<\/strong>\n\nDuring the campaigns leading up to the recent elections, we heard a lot about the middle class. Many \u2013 if not most \u2013 candidates tailored their messages and promises to helping those in the middle class improve their lives.\n\nWhy was this? One answer comes from political science and is termed the \u201cmedian voter strategy.\u201d This strategy simply says that in an election \u2013 especially a general election rather than a primary \u2013 candidates should craft their messages to appeal to the average (median) voter. If most people don\u2019t like \u201cextreme\u201d positions (too far at one of the political spectrum or the other), then the notion is a \u201cdown the middle\u201d message will appeal to the largest number of voters.\n\nA second answer is an offshoot of the first, but maybe more direct. In modern America, the middle class has been where the votes are. Traditionally, the majority of Americans have considered themselves to be middle-class \u2013 regardless of whether they actually were middle-class by statistical measures. Hence, a candidate who concentrates on middle-class issues and concerns will be going where the votes are.\n\nThe third answer is less politically oriented and more economically focused. It is that there are real problems in the middle class \u2013 problems that are relatively new and which threaten the very existence of the middle class as a large and viable entity. Therefore, politicians are giving so much attention to the middle class because it is in trouble.\n\nIn this column I will examine this third possibility. The first step is defining \u201cmiddle class.\u201d Obviously the term implies households in the \u201cmiddle,\u201d especially of the income distribution. But how broad is the middle, and where does it begin and end? There are many answers and measures. Here, I will define \u201cmiddle class\u201d as households earning between $35,000 and $75,000, which puts a spread around the average (median) household income of approximately $50,000.\n\nUsing this definition we can quickly see one issue: The middle class has been getting smaller. In North Carolina between 2007 and 2012, the percentage of households defined as middle-class (by the above definition) declined from more than one-third of all households to just above 30 percent.\n\nThe earnings of middle-class households have also been dropping in the last five years. After adjusting for inflation, middle-class households experienced a 7 percent fall in income. This was a decline twice as much as for those at the top of the income ladder, but it was smaller than the loss for those at the income ladder\u2019s bottom rung.\n\nMiddle-class households are also stressed by some of the spending challenges they face. Many middle-class households naturally want their children to attend and graduate from college, because they know a college degree is one of the best tickets to a good standard of living. But it\u2019s been well documented that college costs and college debt have both been rising rapidly (although it should be recognized that North Carolina\u2019s public universities have some of the most affordable tuitions in the nation). Also, there is uncertainty about where health insurance premiums are headed.\n\nMiddle-class households face changes in the workplace, as well. Traditionally among the largest employers of middle-class workers were factory jobs. But for several decades, factory jobs have been replaced by machines and technology. Other middle-income positions \u2013 in sales, finance and even management \u2013 may be on the chopping block in the future. Economists actually have a term for the replacement of labor by machines and gadgets: \u201ctechnological unemployment.\u201d It likely will continue.\n\nPlus, there\u2019s maybe even a bigger reason to worry about the stability of the middle class. Historians tell us authoritarian rule was replaced by democracies when the middle class developed and expanded in countries. So if the middle class shrinks \u2013 leaving an upper class and lower class but not much in-between \u2013 there may be reason to worry about our political system.\n\nSo what\u2019s the answer to strengthening the middle class? Many think the ultimate answer is education \u2013 making sure individuals have opportunities for training for middle-income jobs, and opportunities to be re-trained and re-educated for different jobs when necessary.\n\nThe middle class is at the heart of most successful modern economies and political systems. Saving, protecting and even expanding the middle class may be the issue of the century. You decide!\n\n \n\nDr. Mike Walden<\/strong> is a William Neal Reynolds Distinguished Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of North Carolina State University\u2019s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The College of Agriculture and Life Sciences communications unit provides his You Decide <\/em>column every two weeks.\n\n \n\nPrevious columns are available at http:\/\/www.cals.ncsu.edu\/agcomm\/news-center\/tag\/you-decide<\/a>\n\nRelated audio files are at <\/em>http:\/\/www.cals.ncsu.edu\/agcomm\/news-center\/category\/economic-perspective<\/a>\n\n "},"excerpt":{"rendered":"

Mike Walden discusses why saving, protecting and even expanding the middle class may be the issue of the century.<\/p>\n","protected":false},"author":27,"featured_media":450,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"source":"","ncst_custom_author":"","ncst_show_custom_author":false,"ncst_dynamicHeaderBlockName":"","ncst_dynamicHeaderData":"","ncst_content_audit_freq":"","ncst_content_audit_date":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[1,65],"tags":[],"_ncst_magazine_issue":[],"coauthors":[],"displayCategory":null,"acf":[],"_links":{"self":[{"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/posts\/98161"}],"collection":[{"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/comments?post=98161"}],"version-history":[{"count":0,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/posts\/98161\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/media?parent=98161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/categories?post=98161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/tags?post=98161"},{"taxonomy":"_ncst_magazine_issue","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/_ncst_magazine_issue?post=98161"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/wp-json\/wp\/v2\/coauthors?post=98161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}