Tuesday, March 3, 2009
Erosion of the Middle Class
There has been a continued emphasis on the Middle Class and how tax cuts and the stimulus package will benefit the Middle Class. With the economic crisis, the Middle Class has been significantly reduced as many wage earners have been reduced from the high five figure yearly incomes to the meager four and low five figure incomes as they join the millions of Americans that are considered the lower class. Many of the Middle Class were auto workers, bank employees, and mortgage personnel that have felt the effects of the financial crisis in America. They have been relegated to the mass of individuals seeking unemployment benefits that barely cover their current living expenses. The Middle Class of the 20th century is not the Middle Class of the 21st century. The dynamics of the Middle Class are change dramatically as many are being forced down the economic ladder to the near poverty level. Many of the Middle Class are facing foreclosures and on the brink of bankruptcy and they try to rebuild their shattered lives in a economy where jobs are scarce. What will happen as many more companies continue to downsize and lay off employees? Will the Middle Class be totally eliminated and there be only two classes … the Lower Class and the Upper Class?
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The middle class is the engine of our consumerism-based economy. It is responsible for growth and sustainment. Without it, our economy will collapse, and the gap between the "haves" and "have-nots" will only widen. The good news is that an economy with only a lower class and upper class is unsustainable. The lower class cannot possibly fuel the economy in any measure. It won't matter how cheap off-shore manufacturing is, because there will be no one left to purchase those goods. The service industries will also collapse. The upper class will be forced to permit the creation of a new middle class, as is happening in China and India. Of course, the intervening years will be miserable.
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