[Vision2020] States Where the Middle Class Is Being Left Behind

[Kenneth Marcy]

States Where the Middle Class Is Being Left Behind

*http://tinyurl.com/zasj93x

*

By many measures, the U.S. economy is booming: unemployment is close to 
a decade-long low; the Federal Reserve recently raised interest rates 
for the second time in roughly a decade, signaling confidence in the 
economy; and the Dow Jones Industrial Average reached an all-time high 
earlier this year.

Despite the nearly decade-long period of growth, there have been signs 
the American middle class is being left behind. Over the past five years 
alone, incomes among the top 20% of earning households in the United 
States rose about 1.5 times faster than that of middle class households. 
Incomes among the top 5% of households increased at roughly double the 
rate middle class incomes did. In some states, the gap is widening at a 
much faster rate. In Wyoming, incomes among the top quintile of 
households increased by 12.2%, while the average income among middle 
class households rose by just 2.5%. 24/7 Wall St. reviewed the nine 
states where the middle class is being left behind.

As the economy has recovered from the Great Recession, a trend began to 
develop among the nation’s middle class. Americans who lost their jobs 
managed to eventually find work again, but often at a lower pay, or only 
part time. The result was that even as the stock market soared and 
unemployment improved, incomes among the nation’s middle class — often 
referred to as the backbone of the economy — fell.

*Click here to see the states where the middle class is being left 
behind. 
<http://247wallst.com/special-report/2017/02/07/states-where-the-middle-class-is-disappearing/2/>*

As the recovery continued, however, middle class incomes began to rise 
somewhat, growing since 2011 in all but one state. Middle class 
household incomes declined by 0.8% in Delaware. However, throughout the 
country, and particularly in the nine states on our list, income growth 
among the top earners dwarfed the income growth of the middle class. In 
the nine states on our list, income growth among the top quintile was 
roughly double the growth of the middle quintile, and in the case of 
Wyoming and Alaska, it was more than four times that of the middle class.

One possible explanation for the relatively low income growth in some of 
the states on this list is, perhaps counterintuitively, the relative 
strength of the middle class there. Four states on this list have higher 
than average household incomes among the middle quintile. This includes 
Alaska, where the average household income in the middle quintile is 
about $73,500 a year, roughly $17,500 greater than the national average 
household income for the middle class.

Historically, strong labor unions have been integral to a vibrant middle 
class. Collective bargaining has helped improve wages, benefits, and 
rights for workers, both union and nonunion alike, nationwide. However, 
according to the Economic Policy Institute, a nonpartisan think tank, 
union membership has fallen considerably in the last several decades. In 
addition to declining membership, labor laws have weakened unions and 
their ability to contribute to higher wages. Since union membership 
began to rapidly decline in the 1980s, the share of income going to the 
top 10% of earners has increased dramatically.

Perhaps because unions are not as influential as they once were, there 
does not appear to be a strong overarching pattern between union 
membership and stagnant middle class wages. Nationwide, some 11.1% of 
all working adults are union members. Among the states where the middle 
class is disappearing, unionized workers comprise anywhere from 5.2% of 
workers in Arizona to 24.7% in New York.


*7. Idaho*
*> Middle class income growth 2011-2015:* 5.1% (25th lowest)
*> Fifth quintile income growth:* 12.1% (7th highest)
*> Fifth quintile share of income:* 48.8% (14th lowest)
*> Middle class household income:* $48,216 (11th lowest)

Currently, income inequality is less profound in Idaho than it is across 
the country. This may not remain the case for long, however. Middle 
class incomes in Idaho have not increased as rapidly as they have 
nationwide. Meanwhile, income growth among the top 20% of households has 
outpaced comparable growth nationwide by a considerable margin.

Historically, labor unions have been a major factor in the economic 
vitality of the middle class. The relatively small presence of organized 
labor in Idaho may partially explain the slower than average wage growth 
among middle income households. Only 6.8% of working adults in Idaho are 
unionized, well below the 11.1% of U.S. workers who are.



Ken


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