Demise of the middle class in the US?

The burgeoning gulf between rich and poor persons in the United States now means that if you are not at the top, you are at the bottom. The global labor market is changing radically thanks to growth at the high and low ends. About three quarters of the jobs created in the United States since the great recession pay only a bit more than minimum wage. Still, the United States has more millionaires and billionaires than any country ever, and this most affluent group is steadily growing. Tyler Cowen his new book, “Average Is Over,” explains this phenomenon as follows: High earners are taking ever more advantage of machine intelligence in data analysis and achieving ever-better results. Meanwhile, low earners who haven’t committed to learning, to making the most of new technologies, have poor prospects. Nearly every business sector relies less and less on manual labor, and this fact is forever changing the world of work and wages. A steady, secure life somewhere in the middle—average—is over. Cowen projected current trends over the next 20 years and concludes: “Our future will bring more wealthy people than ever before, but also more poor people. Rather than balancing our budget with higher taxes or lower benefits, we will allow the real wages of many workers to fall — and thus we will allow the creation of a new underclass.” Cowen’s merely forecasting based on current trends: middle-class American jobs being eliminated by automation and outsourcing, downward pressure on wages for all but the most skilled, growing inequality […]