Here is a great article that explains in simple words why US middle class gets poorer. Among the reasons are:
1. Decline of unions
and subsequent erosion of collective bargaining
In 1983, union workers made up about 20% of the workforce. In 2010, they represented less than 12%.
- cheap labor gets outsourced to China and other countries while company executives and investors benefit from the savings
In 1980, workers with a high school diploma earned about 71% of what college-educated workers made. In 2010, that number fell to 55%.
- tax cutting and explosive growth of financial sector is best environment for rich to get richer
The 1980s was a period of anti-regulation, presided over by President Reagan, who loosened rules governing banks and thrifts.
A major game changer came during the Clinton era, when barriers between commercial and investment banks, enacted during the post-Depression era, were removed.
In 2000, President Bush also weakened the government's oversight of complex securities, allowing financial innovations to take off, creating unprecedented amounts of wealth both for the overall economy, and for those directly involved in the financial sector.
What we as a country can do about it? If I had to choose any single thing it would be education. The low skilled jobs are gone and are not coming back (unless we get poorer
), but we can help our kids do better in the white collar labor by investing in their education. What do you think?