Here we discuss what is considered middle class in addition to why and how the middle class is decreasing at an alarming rate and how you can help solve the problem and earn income doing it.

 

Middle Class Income: First, according to the USA today, the answer to the question, what is considered middle class, vary based on who you ask:


  • According to a a Pew Charitable Trusts study , the “middle class” income range is between $32,900 and $64,000 a year
  • According to the U.S. Department of Commerce, the “middle class” income range is between $50,800 and $122,000
  • According to U.S. Census Bureau, the middle class” income range is between $20,600 and $102,000.

 

As you see, the results vary.

 

Now, it’s time to make a simple judgment call. In today’s economy, it’s safe to say that a family with 2 or more kids earning between 20,000 and $40,000/yr is formally low income. For this reason, it’s a safe bet to consider the U.S. Department of Commerce numbers of $50,800 to $122,000 as the foundational range for middle class America.

 

Middle Class Attitude: Income is one thing, but attitude is a different story. For example, with the hyper competitive consumer marketplace and superstores discounters like Wal Mart, a dollar conscience family can live somewhat comfortable in the income range of $20,000 to $40,000. The phrase “somewhat comfortable” meaning they have a large screen TVs, cell phones, computers and most other comforts of life, unlike what you would normally expect of a low income family. For this reason, if you ask anyone earning between $20,000 and $40,000 a year if they consider themselves middle class, they will, more often than not, say yes.

 

In summary, when we ask the question what is considered middle class? The real answer depends on whether you are asking official sources, such the U.S. Department of Commerce, or the average individual.

 

Why is the Middle Class Decreasing at an Alarming Rate

When considering the U.S. Department Commerce numbers, families are falling out of this income range at alarming rates. Just consider the following chart:

 

what is considered middle class

 

As you can see, it’s being happening since the 1970s.

Why is this happening? The problem is structural due to a slow transition from democratic capitalism to supercapitalism, as Dr Robert Reich thoroughly explained in his book Supercapitalism. Dr Reich served as the Secretary of Labor during President Clinton first term in office.

 

The following are key summary points Dr Reich outlined in his book:

 

  • During the 30 years or so after World War II (1940s to 1970s), most of Europe and Japan was in ruins from the war and the U.S. lead the world economically. U.S. companies had little to no competition. Therefore, companies, the U.S. government and U.S. citizens were able to collaborate and work together to create a world class middle class. This collaboration came in the form of oligopolistic relationships between large companies to raise prices as required to insure they can always pay strong middle class wages, powerful labor unions to force the hand of large corporations and effective  government regulations as required to make the system work. Although there were many problems and issues during those years, this was a near golden age of middle class prosperity. It was referred to as democratic capitalism because corporate CEOs were also considered corporate “statesmen”, who had the well-being of the U.S. citizenry in mind in addition to their bottom line;

 

  • As a result of the arms race with Soviet Union and bold new technology initiative such as President Kennedy’s mission to the moon, the U.S. government poured billions into research and development. Out of this research and weapon’s development activities came semi-conductor technology, computers and the internet. This technology, plus an improved shipping and distribution system, laid the foundation for today’s global economy where foreign companies can sell and distribute their products and services to U.S. consumers on a large scale and at low cost;

 

  • Today, we are in a hyper-competitive and global marketplace, which benefits consumers and investors at the expense of the well-being of the U.S. citizenry. Consumers benefit from the hyper-competitive consumer goods market, which produces low prices and an abundance of shopping choice. As noted above, families who fall the low income area of $20,000 to $40,000 can live relatively comfortable given low prices and consumer choice. Of course, investors or corporate shareholders benefit as companies bow to competitive pressure and cut cost by laying off workers, cutting benefits and cutting wages. Profits soar at the expense of worker prosperity, which leads to income inequality and more and more individuals falling out of the middle class;

 

  • Congress and the government is powerless because of politicians need to continuously raise funds from corporate donors. The corporate lobby and money machine is literally unstoppable as big corporations keep lobbying congress as required to sway legislation in a way to boost their competitive positioning relative to their competition. As one corporation does it, other corporations must do it to compete. Therefore money keeps flowing in favor of corporations, often at the expense of workers.

 

A key point to note here is that corporations radically jobs, reduce wages, outsource jobs and lobby congress for favoritism, not out any malicious intent to harm workers or U.S. citizens, but because that have to survive in the hyper-competitive global environment. Remember, after World War II, U.S companies had little to no competition. As a result, they were free to collaborate, raise prices, raise wages and make the necessary concession for the well-being of U.S. workers and citizens. This is not the case anymore. Super-capitalism has replaced democratic capitalism, which is leading to the systematic dismantling of the middle class as we know it. You can see the results in the following chart:

 

Raising gap between rich and poor

You can easily see how CEO pay , the S&P index and corporate profits skyrockets and average work pay remains level, which a decrease in real income when considering inflation.


How you can help solve the problem and earn income doing it

Think Middle Class Financial Empowerment Project. We are not waiting around for the government. The Middle Class Financial Empowerment Project (MCFEP) is part of an economic research project designed to explore grassroots lead options on how to solve the shrinking middle class problem. The premise of this project is the fact that Middle class America can no longer rely on the government and business to offer viable solutions to address the shrinking middle class. Viable solutions must grow from ground-up lead by an aggressive grassroots wealth building and financial empowerment campaign. This is the focus of the Middle Class Financial Empowerment Project.

 

Learn more and get involved with the project. You can offer your value input and earn a significant part time income if you choose to participate.

Consider the following:

 

  • You log on to the internet part time, say 2 to 5 hours per week;

 

  • While on line you learn how to you can contribute professionally or within your field of expertise or interest to an online project. You can do it within the 2 to 5 hours per week you allocate;

 

  • As you participate and contribute professionally to the project, you earn a substantial part time income;

 

  • Better yet, because of the nature of the project, you earn a residual income equity benefit that continues to pay you month after month long after you no longer contribute to the project activities;

 

  • Once you finish one project, you can move on to another, thus creating a series of residual income equity benefits;

 

  • Over time, you use your income and residual income equity benefits to paydown bills, buildup savings and generally create a financial foundation leading away from paycheck to paycheck dependence;

 

  • With a strong financial foundation, you will be in comfortable financial position to secure a professional position where you can forgo hourly wages and salaries in lieu of a more lucrative productivity and ownership based compensation with an established company or corporation. By doing so, you will increase your workplace income 3 fold.

 

Join others who starting this path to financial independence. Learn more about the new Middle Class Financial Empowerment Project.

The source of the problem is the lack of fundamental rethinking of workplace compensation to accommodate new global information age realities. The traditional 8 to 5 workplace is simply evolving away from the old “industrial age” infrastructure to a new “information age” infrastructure. However, the thinking regarding workplace compensation is not evolving. Workplace compensation is still stuck in the “industrial age” with hourly wages, salaries and company sponsored benefits. Workplace compensation must evolve to include compensation resources more representative of information age realities.

For example:

  • These new global information age processes let corporations exploit new efficiencies that are effectively out-of-sync with traditional wage-based compensation models or the old industrial age compensation infrastructure;

  • The phrase “out-of-sync” has to do with flexibility. To be competitive in a global economy, corporations have to be fast, flexible, low cost and efficient as reflected by the disappearing job and outsourcing trends noted above;

  • Hourly wages and salaries are fixed, “inflexible” payroll expense and will always be targeted for reduction or outsourced to the lowest cost producer;

  • As the global information centered economy expands, corporations will have more and more technology enabled opportunities to target and exploit these reductions …regardless of any government intervention or political platform;

  • As a consequence, any worker/employee who in compensated in the form of fixed hourly wage and salary will find in harder and harder to increase their income and standard of living…regardless of their individual workplace productivity. The fact that their employment represents a fixed expense to the corporate bottom line will increasingly be the overriding factor. The only exception may be individuals with knowledge and skill levels that cannot be found or duplicated anywhere else.

In summary, individuals will always be able to get jobs and earn income in the form of hourly wage or salary, but the value of this form of compensation will lose value as the global economy expands …resulting in a continuous decrease in aggregate standard of living.



The Solution
The solution to this dilemma the embodied in the Middle Class Financial Empowerment Project. Also, review Position Yourself for the Coming Wealth Building Revolution, which is visionary snapshot of upcoming middle class empowerment and wealth building projects.

It depends on who you talk to. According to USA Today: “middle class” income range has been described as between $32,900 and $64,000 a year (a Pew Charitable Trusts study), between $50,800 and $122,000 (a U.S. Department of Commerce study), and between $20,600 and $102,000 (the U.S. Census Bureau’s middle 60% of incomes)”. As you can see, data varies widely depending on which organization or research organization you ask. When considering the combined range, middle class income ranges from $20,000 to $122,000.

 

Now, ask yourself … …. how can someone earning $20,000/yr and someone earning $122,000/YR both be in the middle class. This is when the notion of attitude comes into play.

 

For example, with super stores such as Wal Mart, a smart consumer can afford a big screen TVs, cell phones, computers and most other comforts of life. Because of this, if you ask anyone earning between $20,000 and $40,000 a year if they considered themselves middle class, they will, more often than not, say yes. On the other hand, statistically, a family earning $20,000/yr or less is living at the poverty level.