June 17, 2019
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The American middle class loses its distinction as richest in the world

KEVIN LAMARQUE | REUTERS
KEVIN LAMARQUE | REUTERS
The audience listens intently as U.S. President Barack Obama speaks to the City Club of Cleveland about middle class economics in Ohio March 18, 2015.

The American middle class is no longer the most affluent in the world.

Lower- and middle-income residents of other advanced countries have seen a greater increase in wages over the last three decades, according to an analysis of after-tax income data published recently by The New York Times and the group that maintains the Luxembourg Income Study Database.

Now, middle-class incomes in Canada, which were long lower than those in the U.S., appear to have passed us. And the poor in much of Europe have more wealth than low-income Americans.

David Leonhardt and Kevin Quealy wrote for The Times:

The findings are striking because the most commonly cited economic statistics — such as per capita gross domestic product — continue to show that the United States has maintained its lead as the world’s richest large country. But those numbers are averages, which do not capture the distribution of income. With a big share of recent income gains in this country flowing to a relatively small slice of high-earning households, most Americans are not keeping pace with their counterparts around the world.

While economic growth in the U.S. continues to be strong — and even matches or exceeds the growth seen in other countries — most people here don’t seem to be benefitting from it. Instead, the earnings of the wealthiest Americans have risen faster than those in many other nations.

[MORE: If you’re in the middle class, you’re no longer part of the majority]

What’s more:

The struggles of the poor in the United States are even starker than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true.

The Times’ analysis points to three big reasons for wage stagnation: Educational attainment rates have risen slower here than in other industrialized countries; American companies pay lower- and middle-income workers less and executives more; and the wealthiest Americans pay lower taxes than those in other countries, which more aggressively redistribute income to lower- and middle-income citizens.

In Maine, per capita income in 2014 was $27,978, according to the U.S. Census Bureau. Compare that to 2005, when per capita income was $28,614 when adjusted for inflation.



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