MindPlanet reports in the The Sell-Off of America that “America’s Middle Class Has Become Globalization’s Loser”
This article by Germany’s best-known economics writer – Steingart was chosen as “The Economic Writer of the Year” in 2004 – provides a fast and high-level overview of how the American empire is losing (has lost?) its economic power.
While the dollar is still the world’s currency of choice, the USA no longer controls it.
Furthermore, with increasing trade deficits, the outsourcing of labor, and spiraling debt, the US economy is poised on the edge of collapse.
And the American middle-class has and will bear the brunt of this shift as it plays out over the next few decades.
Delinked from prosperity
Make no mistake about it: at the start of the new century, the United States is still a superpower. But it is a superpower that faces tough competition from outside and difficulties within.
In Canada, the middle class is losing too.
After-tax family income for the middle class has dropped approximately five percent.
Inequality is higher in the 2000s than it has been since Statistics Canada began measuring comparable statistics in the mid-seventies.
Toronto’s Globe & Mail concludes the report from StatsCan with an unusually understated remark:
Overall, income inequality “is an interesting trend which seems to be developing in many countries,” said the senior research economist. “It’s something that would be good to keep our eye on.”
Income inequality grew in most industrialized countries such as the Finland, Germany, Sweden and the U.K. in the nineties. Canada sits in the middle. The gap is significantly higher in the U.S.
Jacob S. Hacker, Resident Fellow at Yale
“Wages are stagnant and the middle class is shouldering a larger tax burden. Prices for health care, housing, tuition, gas and food have soared. New government data also shows that tax cuts have shifted the overall tax burden to the middle class from the wealthiest Americans.
The wealthiest 20% of households in 1973 accounted for 44% of total U.S. income. Their share jumped to 50% in 2002, while everyone else’s fell. The share dropped for the bottom fifth.
“For those working in the bottom half of the pay scale, they’re under an enormous amount of pressure.”
2006 US News and World Report:
“…a whopping 67 percent of said they were “dissatisfied” with the state of the union.
“Income distribution from 1995 to 2004, during both an economic boom and a recession, kept tilting toward the already wealthy. The top income quartile gained 77 percent, while the bottom gained just 8 percent.”