Jay Ambrose: Is the middle class shrinking?

Ready to shudder? Listen to the likes of CNN’s Lou Dobbs, who tells us that “elites” in this country “are waging an outright war on working men, women and their families, and there is no chance the American middle class will survive this assault if the dominant forces unleashed over the past five years continue unchecked.”

His is a populist theme sounded by any number of commentators and politicians who blame free trade, big, bad corporations, their wicked D.C. lobbyists and tax cuts “for the rich” for what they view as the gradual impoverishment of the middle class. The only thing wrong with this theme is that it is absolutely wrong.

You think the middle class is shrinking? In a way, it is, but not because it is getting poorer. It is getting richer. Between 1979 and 2004, one economist tells us, the “share of prime-age adults in households with real incomes above $100,000 rose by 13.1 percentage points” while the “share of households making less than $75,000 dropped by 14 percent.”

This economist, Stephen Rose of a progressive-policy group called Third Way, observes that the median income of people between 25 and 59 — “the prime working years” — was $63,300. Focus strictly on married households and it’s $70,000. Look only at households that have two earners, and it’s close to $80,000. Rose, who told me he gets his data from the U.S. Census Bureau, pointed out in an online article that most Americans have no credit card debt, their assets have been rising and bankruptcies are rare.

No analyst supposes all is perfect — most agree housing costs and college tuition are a burden for many, for instance — but when you take account of all that technology has wrought and all the other advances over the years, it is impossible to argue that the vast majority of Americans have ever had it so good as they do in this era.

It’s true that poverty has increased slightly in recent years, but a number of careful critics note that is solely a function of immigration, of legal and illegal newcomers bringing their poverty to America with them. Dobbs himself frets about the ill effects of illegal immigration, which lowers wages for low-income Americans, but is not as likely to tell you about the ever-higher household incomes over the past decade of most Americans.

Dobbs would rather beat up on free trade, reminding us that foreign competition can cost us jobs while failing to remind us that it invariably creates more jobs than are lost — unemployment in this country is an extraordinarily low 4.6 percent — or that low-cost imports are a boon to consumers and help control inflation. The corporations he beats up on are mostly honest, mostly very well managed and that without which we would quickly become a Third World country. They lobby for reasons of self-defense — one calculation informs us there are 60 federal agencies implementing 144,000 pages of regulations at an annual cost to Americans of $800 billion.

But, of course, there are those tax cuts “for the rich.” In the Wall Street Journal, Lawrence Lindsey writes of some early administration tax cuts: “A typical middle-class couple with two children got a minimum of $1,600 in relief — equivalent to a 4 percent increase in their real take-home pay.” Meanwhile, this former adviser to President Bush says, the tax cuts have energized the economy while the “share of income taxes paid by the top 1 percent, 5 percent and 10 percent of taxpayers has moved up.”

Sounds like the middle class might survive, after all.

Examiner columnist Jay Ambrose is a former editor of two daily newspapers. He may be reached at SpeaktoJay@aol.comGeneral OpinionOpinion

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