Saving the Middle Class

Thoughts on a free market economy….

“Save the Middle Class” 

By Phyllis Hunsinger

March 1, 2021 

                The middle class was defined by the PEW Research Center in 2019 as income equaling two-thirds to double the median income; the range was from $40,500 to $122,000.National Public Radioannounced on July 5, 2016 that the term “middle class” in the United States has historically stood for something less concrete: the American dream. The program went on to say that according to PEW Research, 2015 was the first recorded year since 1970 when people in the middle income bracket no longer made up the majority of people in the U.S.  This indicates a correlation between the middle class and achieving the American dream.

                Over the past several decades, America has become less of a middle class society as the wealthy have captured most of the economy’s gains. Despite gains in national income, the middle class income apparently has decreased. There are a number of reasons for this according to Eleanor Krause and Isabel Sawhill in Brookings:  (1) Participation in the work force by less-educated, prime-age adults, especially men, has declined; (2) Stagnant incomes have meant that fewer Americans are growing up to be better off than their parents; (3) For some a sense of well-being has eroded because the American Dream is a more distant prospect for today’s children; (4)Middle class families are more fragile and more dependent on two incomes; and (5) The income gains for middle class families is due to the rise in women’s earnings.

                The middle classes are suffering economically due to the rising costs of education, health care, and housing, reported by the Organization for Economic Co-Operation and Development in 2019.  The report went on to say, “Societies with a strong middle class experience higher levels of social trust and also better educational outcomes, lower crime incidence, better health outcomes, and higher life satisfaction.” The middle class is the heartbeat of the economy, the nation’s indispensable workforce.

                A free market economy provides the mechanism for middle class Americans to innovate and to become entrepreneurs. They are willing to take risks to improve their socioeconomic status. Low income people generally are unable to become the innovators, and upper income people have less incentive to innovate and disrupt their life benefits. 

                Government policies have a direct influence on the ability of the middle class to succeed.  Restrictive policies on licensing, resource regulations, taxes and fees, wage requirements, and randomly declaring businesses and employees essential versus non-essential disproportionally impact the middle class. Failure to maintain law and order is devastating to middle class businesses, as was witnessed during the summer and fall of 2020.

                The economy is not a fixed pie from which citizens are given a piece. With freedom to innovate, the economic pie will expand, as was demonstrated the past few years in the U.S. A quote by venture capitalist, Nick Hanauer, is worth noting, “Rich businesspeople like me don’t create jobs. Rather, they are a consequence of an exosystemic feedback loop animated by middle class consumers. When the middle class thrives, businesses grow and hire, and owners profit.”

                “Save the Middle Class” should be the rallying cry by all who desire the American Dream.

https://www.free-dom.co.us, Phyllis Hunsinger © 2021 All Rights Reserved

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