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Fewer Millennials Are Making It Into The Middle Class (Demo)

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By Gary Reber Uncategorized April 11, 2019

On April 11, 2019, Tami Luby writs on CNN Business:

America’s middle class families aren’t the only ones having a tough time these days.

Middle-income households are disappearing in developed countries around the world, according to a new report by the Organisation for Economic Co-operation and Development.
The study, titled “Under Pressure: The Squeezed Middle Class,” laid out a litany of problems affecting middle-income households. And it warned that this could have serious consequences for nations’ economic growth and social fabric.
“Today the middle class looks increasingly like a boat in rocky waters,” said OECD Secretary-General Angel Gurría. “Governments must listen to people’s concerns and protect and promote middle-class living standards.”
The middle class has been under stress for years, helping fuel the rise of progressive Democrats in the United States, who are seeking to increase taxes on the rich to provide a stronger safety net — including universal health care. But while many presidential candidates point to Europe as a model, the OECD report shows that problems exist there too.
The share of people in middle-income households in developed countries fell from 64% in the mid-1980s to only 61% by the mid-2010s. However the declines were larger in several countries, including the United States, Israel, Germany, Canada, Finland and Sweden.
In the United States, just over 50% of the population is middle class, much smaller than most other developed countries.
The report considers households earning between 75% and 200% of the median national income as middle class.

Higher costs, less income

Rising income inequality is part of the reason for the trend. Over the past 30 years, median incomes in OECD countries increased a third less than the average income of the richest 10%, the report found.
At the same time, costs are going up faster than inflation in the world’s richest economies — making it harder for the middle class to keep up. Home prices, in particular, have been growing more than a third faster than median household income in recent decades. The middle class spent 32% of their budgets on housing in 2015, compared to 25% in 1985.
More than one in five middle-income households spend more than they earn.
The middle class has also been losing economic clout in OECD countries, which could ripple through societies. The total income of this group was about four times that of upper-income households in 1985. Thirty years later, the ratio fell to less than three.
“The investment of the middle class in education, health, and housing, their support for good quality public services, their intolerance of corruption, and their trust in others and in democratic institutions, are the very foundations of inclusive growth,” the report said.

Millennials struggle to make it

Younger people are having a harder time achieving middle class status than those in previous generations. Being middle class once meant living in a comfortable house and affording a rewarding lifestyle, thanks to a stable job with career opportunities, the report said. It was also a basis from which families aspired to an even better future for their children.
Close to 70% of the baby boomers were part of the middle class when they were in their 20s, compared to nearly 64% of Gen X but only 60% of millennials. Baby boomers also enjoyed more stable jobs during their working life than younger generations.
Job insecurity is on the rise as labor markets transform amid increasing globalization and technological use. One in six current middle-income jobs face high risk of automation.
“These trends paint an uncertain picture for workers with middle incomes, in particular, those with low-medium skills in routine jobs,” the report said.
The OECD offers some suggestions for addressing the middle class squeeze, many of which match the talking points of progressive US candidates. They include lowering taxes on the middle class and increasing them on the wealthy, developing more affordable housing, helping young adults build wealth, containing the cost of education, child care and health and improving workers’ skills and training.
Gary Reber Comments:
The vast majority of millennials and for that matter, the citizenry overall, are not owners of the technologies that they develop for use by the monopoly owners of corporations who employ them.
Furthermore, shifting supply chain parts and finished products manufacturing to countries with far lower labor costs and weak, if any environmental regulations, to produce at lower cost, as well as off-shoring of our manufacturing capabilities are gutting and eliminating manufacturing in our country. As a result, Americans are losing otherwise good jobs that are necessary to earn an income. Americans have effectively no choice; either work a job or be subjects of government taxpayer-supported welfare paid for by those who are productive through work and/or ownership of wealth-creating, income-producing capital assets.
The masses of Americans are not capital asset owners as they face financial barriers, including the requirement of past savings to acquire ownership, to becoming productive capital asset owners and thus, are shutout from the wealth-building and income-producing benefits that result from owning productive capital. And yet, the reality is that as tectonic shifts in the technologies of production steadily eliminate the necessity for masses of human labor, only those who have past savings and access to capital credit  have been able to become owners and are the individuals who are able to continually amass the ownership of all productive things that result from innovation and invention into the future.
Sadly, academia, the wealthy capital ownership class, and politicians have failed to educate the American people through our schools, even university levels, and the national media dialogue to teach effective financial means to acquire productive capital with the earnings of capital, simultaneously with economic growth. As a result, the vast majority of readers of this comment will not initially understand and comprehend the free-market, private property rights concepts and financial mechanisms proposed as related to an understanding of money, credit, banking and finance.
Unfortunately, the vast American majority only understand earning an income via employment and are unable to make reductions in consumption to accumulate savings and speculate via purchasing pre-owned stocks (legalized gambling), hoping for a financial gain when they sell the stock. They are excluded from purchasing new stock issues, representing new capital asset formation, with the earnings generated by the investment, without the requirement of past savings.
The author claims that the Organisation for Economic Co-operation and Development and the progressive candidates for the United States presidency offer ways “to help young adults build wealth,” those ways are on eduction for the jobs of the future, not on owning the (non-human) “things” that actually do the producing. Nor do they address the economics necessary for people of older generations to become financially secure.
While the national focus is always on job creation instead of ownership creation, our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital “worker” owner more productive. How much employment can be destroyed by substituting machines for people is a measure of their success — always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks. Yet the 1 percent is not the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the goods, products, and services produced as a result of substituting “machines” for people. And yet you can’t have mass production without mass human consumption made possible by “customers with money.”
Abraham Lincoln said that the purpose of government is to do for people what they cannot do for themselves. Government also should serve to keep people from hurting themselves and to restrain man’s greed, which otherwise cannot be self-controlled. Anyone who seeks to own productive power that they cannot or won’t use for consumption are beggaring their neighbor — the equivalency of mass murder — the impact of concentrated capital ownership.

The challenge is how will the masses of Americans be empowered to contribute productivity and earn an income to support themselves, as individuals, and as families?

The solution, which upholds the natural law that humans have the right to own “things” including “things” humans use to produce goods, products and services that are needed and wanted to advance their personal affluence, must ensure that property rights are not withheld or suppressed by elite forces of government who seek to make all citizens dependent for their economic well-being on the State and whatever elites control the coercive powers of government, using job dependency, the police, courts of law, prisons, the tax system and so on as their means to control. Such proposals as Universal Basic Income eat away at private property rights and result in citizen dependency and the continued hoarding of productive capital ownership and control by the elite wealthy ownership class and their political frontmen and women dependent on money from the wealthy to become elected to the “public” offices of President, Senate and Congress, and their political appointees .

A solution that retains the natural law right of ownership and ensures personal, responsible ownership of the non-human means of production must result in empowering EVERY citizen to become an owner of productive capital to meet their own consumption needs. Thereby, this would result in government becoming more dependent on economically independent citizens. As the formation of future capital wealth becomes broadly owned, citizens would become effective democratic voters to create a government responsible to the people, not to the economically powerful elite who influence elections with big money political contributions and lobbying to control policy making. Instead, free of elite economic and thus political power, a government by the people and for the people can serve to enact legislation that will empower our entire population to productively contribute to the building of affluence for EVERY citizen, while responsibly protecting and enhancing the environment, and preventing the further concentration of capital wealth ownership among 1 percent group of individuals and families and their heirs, who now own America and will own America’s future, if we do not reform the system.

I call this solution the “Own The Future Deal.” The solution requires reform of our monetary system with the activation of Section 13(a) of the Federal Reserve Act and enactment of new legislation and policies to provide EQUAL opportunity for EVERY child, woman and man to become a productive capital owners through access to insured, interest-free capital credit, repayable solely from the earnings of the investments in the building of a future, environmentally protective and responsible economy that can support general affluence for EVERY citizen. The legislative policies would provide to EVERY citizen an equal, annual amount of this capital credit in accordance with the needs to finance viable and responsible growth. Enactment of this legislation would enable EVERY citizen to be productive and benefit from the growth of the economy without taking from those who already are owners (at least until death using a transfer tax to encourage the super-rich to spread out their monopoly-sized estates). EVERY citizen would be able to accumulate, as owners, viable, wealth-creating, income-producing capital assets and over time secure an affluent state of retirement. Such a deal would show its economic benefits immediately in job creation and universal ownership benefits within a generation following its activation, and continue to build the economic foundation of affluence as days, months, and years of the future transpire.

The following contains everything one needs to understand the foundation of the “Own The Future Deal,” though this wording is not specifically used:

Support the Agenda of The JUST Third WAY Movement (also known as “Economic Personalism”) at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/…/the-just-third-way-basic-principles-…/ and http://www.cesj.org/…/the-just-third-way-a-new-vision-for-…/.

Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.

Support the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/…/capital-homestead-act-a-plan-for-get…/, http://www.cesj.org/…/capita…/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/…/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/…/ch-v…/capital-homestead-accounts-chas/

For an overview, see “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” athttp://www.foreconomicjustice.org/?p=11 .

Gary Reber / About Author
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