What Happened to the American Middle Class? [Infographic]

A strong middle class is often indicative of a nation’s stability and democratization.

One doesn’t have to look far to find politicians speaking to the importance of a strong heavy American middle class, and how it will always be one of our nations top priorities.

However, it begs the question, what is happening with America’s middle class?

The median household income currently sits at $51,371. And it’s noteworthy that household income vary greatly depending on the state’s geographic location.

The more prosperous regions in the U.S. appear to be doing well, but this may not be the full story. Comparing the household incomes from the year 2000 to 2012 reveals that most households are actually making less money than they would have 14 years ago with adjusted dollars.

But why is there a decline?

One important factor is the rise of a middle class in other developing industrialized nations, such as China. Much of U.S. unskilled jobs are being outsourced to emerging markets which offer much cheaper labor than within the U.S. Fourteen years ago the average household income in China was $760 in 2000 and it now starts at $10,000.

Investing in foreign nations allows for them to develop a “new middle class” once they find an economic “sweet spot” (around $10 a day), which leads to a constant growth and foundation of a strong middle class.

The success in these emerging markets offers an explanation as to why portions of the U.S. middle class are struggling.

Divisions within the American lower-middle class and upper-middle class can be examined through the gap between skilled and unskilled workers, as well as through the massive disparities with white American household incomes compared to that of other ethnic minorities.

The current median wealth of white families is $113,149, $89,339 for Asians, $6,325 for Latinos, and $5,677 for African-Americans. In 1984, the wealth gap between white and black families sat around $85,000; however, that gap skyrocketed to $236,500 in 2009.

This massive gap among American skilled and unskilled workers demonstrates a rising trend: the outsourcing of unskilled labor to foreign states is slowly deteriorating the foundation of America’s middle class.

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Source: Best MSW Programs