Vanishing Middle Class & Income Inequality

I have discussed before the growing income inequality in this country that is resulting in a vanishing middle class. The chart above, from the Pew Research Center, makes it very clear what has happened in the United States in the last thirty years -- since the Republican policy of trickle-down economics was instituted. That is the theory that says giving more money to the rich will benefit everyone. It doesn't work. Giving more to the rich just makes the rich much richer, while everyone else is left with less.

Note that in 1980 (when Reagan was elected and started the trickle-down nonsense), the middle class was getting about 60% of the aggregate income distribution in this country. The richest Americans were getting about 30%, and the working class was getting about 9% of all income. Since that time, the middle class portion has dropped from 60% to about 45%, while the upper class has seen their portion grow from 30% to about 46% now, and the working class has seen their income portion drop from 10% to 9%. In other words, the rich have grabbed a 16% bigger share of the nation's income for themselves, while the middle class and the working class have lost 16% in their share of the total national income.

Obviously the Republican trickle-down economic theory has benefitted no one but the rich. In fact, the income for the richest Americans has grown by over 270% in the last thirty years, while the middle class is disappearing and the working class has actually lost buying power because of stagnant wages. This has resulted in a growing income inequality in the United States -- with the largest gap between the rich and the rest of Americans being currently bigger than at any time since the Great Depression.

How bad is the income inequality in the United States. Very bad. The CIA rates countries according to their equality of income using a formula to figure the Gini Index. On this index, a low number means good income equality while a high number means poor income equality. Here are the ten countries where the income is most equally distributed:

1. Sweden.....23.0
2. Montenegro.....24.3
3. Hungary.....24.7
4. Denmark.....24.8
5. Norway.....25.0
6. Austria.....26.0
7. Malta.....27.0
8. Luxembourg.....26.0
9. Slovakia.....26.0
10. Kazakhstan.....26.7

And where does the United States rank in income equality? It ranks 95th out of 136 countries, with a score of 45.0. None of the other developed nations ranked as low as the United States. Here are a few of the other countries who have a more equal distribution of income than the United States -- Ethiopia (30.0), Pakistan (30.6), Bangladesh (33.2), Niger (34.0), Egypt (34.4), India (36.8), Indonesia (36.8), Vietnam (37.6), Venezuela (39.0), Ghana (39.4), Nicaragua (40.5), Russia (42.0), Nigeria (43.7), and Iran (44.5). Doesn't that make you proud?

The truth is that the middle class is disappearing in this country. In just the last ten or eleven years the median middle class income has dropped from $72,956 to $69,487 (a drop of more than $3,400). At that rate, it won't take many more decades before the middle class is gone -- having slipped back down into the working class. We are fast becoming a nation of haves and have-nots.

And this seems to be exactly what the Republicans want. They refuse to abandon their trickle-down economic policy, and in fact, they now want to double-down on it. They want to raise taxes on the middle class by about $2000 so they can give the rich (and the corporations) massive tax cuts. All that would do is make the current income inequality much worse -- and extend our jobless recession for many more years.

Is this the kind of country you want? If not, then you would be very foolish to vote Republican in the coming election -- at any level, from local to state to federal.