Daily Management Review

OECD: Middle class in the USA and other countries is declining


04/12/2019


At the height of the middle class in 1985, its total income was four times more than that of the richest population. Three decades later, it fell to less than three times the difference. Incomes of the middle class grew slowly during this period, while the cost of housing, education and medical care grew much faster. As a result, the debts of middle-class households rose, and security of this population group fell. At the same time, increasingly more obstacles arose in the path of young people who were striving to join the middle class.



chensiyuan
chensiyuan
Of course, the middle class has been under pressure for years. The situation has become the most complicated after the financial crisis. The authors of the OECD study believe that less pressure on the middle class can be achieved by reducing taxes on workers with average wages and transferring the lost funds to their colleagues with higher wages; attempts to slow down the growth of prices for housing, education and medical care would also help.

OECD classifies middle-class as households with incomes ranging from 75% to 200% of the average. The data varies greatly by country. In the US, for example, people with an annual income of $ 23,400 to $ 62,400 are considered middle class.

Over the past 30 years, the share of the middle class in the population of OECD member countries has decreased from 64 to 61%. The largest decline was recorded in the USA, Germany, Israel, Canada, Finland and Sweden.

The process of renewal of the middle class in developed countries is also too slow. Earlier, up to 70% of 20-year-olds related to the middle class, but now the proportion of young people, known as millennials, has fallen to 60%.

In Japan, for example, you need to have some important technical skills, as well a second job, to get into the middle class.

Share of the middle class in the population of the USA and Israel now fluctuates around 50%, and reaches 70% in the northern countries and a number of other European countries. The relatively low proportion of the middle class in the United States is due to the high average income.

Losses of the middle class are attributed to the “terrible” growth of income compared with the rich stratum of the population. At the same time, prices for a range of goods and services that determine the standard of living of the middle class grew much faster. This is especially true for the cost of housing, which now takes up to a third of all expenses of the middle class. For comparison: this share reached a quarter in 1995.

The trend is well marked in Germany. After 2012, rental housing in the largest German cities has increased dramatically: by almost 70% - in Berlin, and by 43% - in Munich, for example. Real wages for the same six years have increased by 8.4%.

source: oecd.org






Science & Technology

WSJ announces imminent start of Boeing 737 MAX flight tests

Study: Machine learning is five times more harmful for the environment than a car

Would Singapore Be The First One To Bring Lab Grown Shrimps To The Global Market?

Apple Patents A ‘Foldable Screen’ For Creating Foldable iPhones

Research Shows Air Pollution Causing Birth Defects

Microsoft tells about operating system of the future

Study: Third of US kids wake up at night to check their smartphones

Deepfake AI Technology Used By Researchers To Bring Mona Lisa ‘To Life'

China is developing technology to capture greenhouse gases

IEA: The growth of renewable energy is slowing

World Politics

World & Politics

Iranian Foreign Minister urges other countries to abandon the dollar

The EC recommends starting penalty procedure against Italy

European Breweries To Up Their Brewing Innovation Amid Green Legislations

‘Frequent’ Shootings Causes China To Issue Travel Advisory Against US To Its Citizens

Facebook’s appeal to stop ECJ data case rejected in Irish Supreme Court

Trump: Japan to buy 105 F-35 fighters from the USA

Theresa May to resign on June 7

The Earth Is ‘Not On Track’ To Tackle Global Warming: The U.N. Secretary General