Speaker 1: From Bloomberg News and I Heart Radio. It's the Big Take.
Speaker 1: I'm West Gasova. Each weekday we dig into one important
Speaker 1: story and on today's show are very first the American
Speaker 1: middle class. On paper, they're actually doing just fine. So
Speaker 1: why are they so worried? Do you know how long
Speaker 1: it takes a working mound to say five thousand dollars?
Speaker 1: Just remember this, Mr Potter, that this rabble you're talking about,
Speaker 1: they do most of the working and paying and living
Speaker 1: and dying in this community. Well is it too much
Speaker 1: to have them working, paying, live and dyeing a couple
Speaker 1: of decent rooms in a bath. There's George Bailey, the
Speaker 1: dutiful savings and loan manager in It's a Wonderful Life
Speaker 1: and the very model of middle class aspirations, A classic
Speaker 1: since n I still watch it every December. Ever since
Speaker 1: the post war economic boom, middle class workers aspiring for
Speaker 1: a better life had been the backbone of the US economy. Sure,
Speaker 1: we'd all love to be billionaires, but a nice home,
Speaker 1: a stable job, with a bit left over to put
Speaker 1: away for the future. Middle class is what a lot
Speaker 1: of Americans have aimed to be. Every politician right and
Speaker 1: left claims to be a champion of it. Our economy
Speaker 1: doesn't work as well or grow as fast. Want a
Speaker 1: few prosper at the expense of a growing middle class
Speaker 1: and ladders for folks who want to get into the
Speaker 1: middle class. Pop culture is squarely aimed at it and
Speaker 1: pokes fun at it. I need cash, folk, food and cattle,
Speaker 1: like posters, beer and grass. Time for me to join
Speaker 1: the middle class. That's Homer Simpson, who somehow supports a
Speaker 1: family of five on a nuclear power plant workers salary.
Speaker 1: And then there's all the companies who have long courted
Speaker 1: the middle class for its disposable income. It's only good
Speaker 1: common sense. I be stuck with one expensive car when
Speaker 1: you can enjoy all the fun and freedom of too
Speaker 1: fine for its For generations, though, racial discrimination and the
Speaker 1: persistent wealth gap have kept many Americans of color on
Speaker 1: the outside. Here's a clip from Still a Brother in
Speaker 1: n documentary about black middle class Americans. Black to live
Speaker 1: in a tree line street. I'd like to have a
Speaker 1: summer home on the lake. I like to wear some
Speaker 1: from brothers. All Americans, and I am an American think
Speaker 1: this way. For people working their way up, It's not
Speaker 1: always easy to get into the middle class, and for
Speaker 1: those who do not always easy to stay there. And
Speaker 1: now here comes inflation and a shaky housing market and
Speaker 1: a possible recession to make it even harder, which raises
Speaker 1: the question is being comfortably middle class still comfortable or
Speaker 1: is the idea losing its mean? My colleague Sean donnan
Speaker 1: has been wrestling with these very questions, and he's here
Speaker 1: with some answers. Happy to have Sean donn in here.
Speaker 1: He has Bloomberg Senior economics writer Sean You and our
Speaker 1: colleagues Alex Tanzi, Claire Valentine, and Ariel Low have written
Speaker 1: a big story about the middle class and what they're
Speaker 1: facing in this kind of very tumultuous period. I kind
Speaker 1: of wanted just to start out by asking you what
Speaker 1: is the middle class? Because it's kind of a mushy thing.
Speaker 1: We all have a feeling of what it is, but
Speaker 1: as is a writer about economics, how do you define it? Yeah? No, absolutely,
Speaker 1: you're right. It's an amorphous thing and it's something that
Speaker 1: we all have a different definition of in a lot
Speaker 1: of ways. We set out to try and put some
Speaker 1: hard boundaries on it. So what we did is we
Speaker 1: worked with a group of economist University of California, Berkeley,
Speaker 1: who have some really great work tracking both income and
Speaker 1: wealth and America. That second part is really important because
Speaker 1: we don't often talk about it in the mainstream media.
Speaker 1: When we're talking about the middle class, we often think
Speaker 1: about income what people earned in any given year. And
Speaker 1: on the income side, there's about a hundred million people
Speaker 1: who we think of as the middle class between somewhere
Speaker 1: between a hundred forty five thou dollars a year and
Speaker 1: a hundred and eighty thousand dollars a year paraddle, not
Speaker 1: per household parattle. All right, So if you're making forty
Speaker 1: dollars a year, give or take that somewhere around like
Speaker 1: twenty three two an hour depending on how many hours
Speaker 1: you work in vacation and all that kind of stuff,
Speaker 1: and it gets you into the middle class, right, I mean,
Speaker 1: and there's actually fifty percent of the country, there's more
Speaker 1: than a hundred million people who are going to make
Speaker 1: less than you at that level. That gets you into
Speaker 1: like the income level of middle class. Right. But if
Speaker 1: you lose your job, you could fall out. So middle
Speaker 1: class has another peep absolutely, And that's the whole thing
Speaker 1: that over the years we've talked a lot about this
Speaker 1: idea of the hollowing out of the middle class is
Speaker 1: stagnant middle class, and we've really been focused on income.
Speaker 1: What we've often missed is the wealth side of things,
Speaker 1: and that's all the stuff that you own, whether it's
Speaker 1: that equity that you have in your home, whether it's
Speaker 1: your retirement savings, whether it's the portion of your car
Speaker 1: that you own. It may even be your TV. But
Speaker 1: to get into the middle class, it's people who earned
Speaker 1: between forty five thousand and a hundred and eighty thousand
Speaker 1: dollars a year. And it's people who also, and this
Speaker 1: is the important have between a hundred thousand dollars in
Speaker 1: savings and assets and a million dollars in assets. So
Speaker 1: it gives you that cushion so that if you lose
Speaker 1: your job, you don't necessarily fall out because you have
Speaker 1: something to fall back. And I think we can all
Speaker 1: agree that one of the key definitions of being middle
Speaker 1: class is economic security. Right, It's a level of I
Speaker 1: can deal with emergency payments and maybe hard car repairs
Speaker 1: cost a lot and we all have struggled to pay them.
Speaker 1: But at the same time, I have some savings. I
Speaker 1: feel like you know, worst comes to worst, I may
Speaker 1: be able to sell my home, you know, and I
Speaker 1: may have the assets that are there if I can
Speaker 1: tap into that equity in the home as many people
Speaker 1: did during the pandemic when you saw this huge boom
Speaker 1: in in mortgage refinancing, and I can use that money
Speaker 1: to pay for my kids education, I can do home
Speaker 1: repairs with that money. I also have retirement savings that
Speaker 1: I can lean on. But that wealth component is really important.
Speaker 1: And what's really important to think about in terms of
Speaker 1: the economic health in the middle class is what's happened
Speaker 1: to that wealth component, particularly over the last ten years
Speaker 1: or so. So now you've we've defined the middle class
Speaker 1: and these are some pretty difficult economic times. We've got
Speaker 1: high inflation, housing values are you know, uh influx? How
Speaker 1: is the middle class feeling? Are they feeling like they
Speaker 1: could wind up losing it all? So there's two answers
Speaker 1: to that. The first is how are they doing? What
Speaker 1: does the data tell us in terms of how are
Speaker 1: they doing? And then we also went out and we
Speaker 1: did some polling to ask how are they feeling? So
Speaker 1: on the how are they doing part, some people may
Speaker 1: not want to hear this. This may not fit with
Speaker 1: the dominant narrative, but the American middle class, based on
Speaker 1: the wealth data in particularly that we have, has never
Speaker 1: been richer than it was earlier this year. In March
Speaker 1: of this year, the average wealth of those hundred million
Speaker 1: people in that middle class topped at at around three
Speaker 1: thousand dollars. That's three dollars in net worth. That's a
Speaker 1: hundred and twenty thousand dollars more than it was in
Speaker 1: January when President Trump came into office. And it's something
Speaker 1: that's accelerated over the last couple of years. During the
Speaker 1: pandemic as a resolved, largely because of housing prices and
Speaker 1: also the stock market boom that we had until this year.
Speaker 1: So people were just earning a lot on their investments,
Speaker 1: they were seeing their savings rise, they were able to
Speaker 1: contribute more to four own case, their houses were going up.
Speaker 1: It was just good times, absolutely until March of this year.
Speaker 1: And then what happened is the Federal Reserve started fighting
Speaker 1: back against inflation soared raising interest rates, and we've seen
Speaker 1: the slowing in the economy that's come since then, and
Speaker 1: that has had an impact on wealth as the stock
Speaker 1: market has turned and also as property values have started
Speaker 1: to turn as well. And today, according to these economists
Speaker 1: at the University of California, Berkeley and their calculations, the
Speaker 1: American middle class is worth about twenty five thousand dollars
Speaker 1: less than it was in March of this year. And
Speaker 1: that is a bigger and just to put that in perspective,
Speaker 1: that's a big that's about a seven percent decline, and
Speaker 1: it's a bigger decline that we saw during the pandemic
Speaker 1: just a couple of years ago, and it's in fact
Speaker 1: the biggest decline we've seen since the Great Recession. So
Speaker 1: if you ask then the middle class about how are
Speaker 1: they feeling well, they will tell you that their personal
Speaker 1: circumstances are pretty good. And that's what this pull with Harris.
Speaker 1: We went out and over a month we asked questions
Speaker 1: to people in that specific target demographic that I talked
Speaker 1: about the forehand around the country. And what we found
Speaker 1: was you asked them about the personal circumstances, and they're
Speaker 1: feeling pretty good. There's gotta be a butt in here someplace,
Speaker 1: and there is a big butt in that and that
Speaker 1: is that you asked them about how the next year
Speaker 1: is going to be in then feeling a little shaky,
Speaker 1: right because they're starting to see it. People are starting
Speaker 1: to look at the four O one case. They may
Speaker 1: look at Zillo and look at what their property valuation
Speaker 1: is doing, and they're starting to see that turn. And
Speaker 1: in fact, when you then ask them about the broader economy,
Speaker 1: the words that come up are things like anxious, stressed, depressed.
Speaker 1: Just in fact told us that they were feeling optimistic
Speaker 1: about the U. S economy. So we have this kind
Speaker 1: of paradox when it comes to the middle class right now.
Speaker 1: The numbers tell us earlier this year they were richard
Speaker 1: than they had ever been on average, and yet now
Speaker 1: they're feeling pretty anxious about how things are turning. Sean
Speaker 1: one person you spoke to is Tom Malie, and he
Speaker 1: fits what you're described. Tom is uh seventy one year
Speaker 1: old retired autometrist. He lives in the suburbs of Columbus, Ohio,
Speaker 1: and he's lived there for years. He spent twenty five
Speaker 1: years in the military, working as an autometrist in the military,
Speaker 1: and then went into private practice. He has three grown sons.
Speaker 1: He is that classic empty nester. In fact, he retired
Speaker 1: right on the eve of the pandemic let's listen to
Speaker 1: how Tom describes what he's feeling like right now. My
Speaker 1: wife and I retired about three years ago. Our goal
Speaker 1: was to travel and be entertained. This is deja vu
Speaker 1: all over again with the inflation. My generation started our
Speaker 1: careers in the late seventies early eighties, when inflation at
Speaker 1: one point was and uh, we're reliving this one more time.
Speaker 1: So inflation plus taking out required minimum distributions and a
Speaker 1: probably lost that's rather disconcerting. So as you hear there,
Speaker 1: Tom's at a different stay age in his life. He's
Speaker 1: later on in his life. He's enjoying his retirement. He
Speaker 1: is also looking out at the lives that his kids
Speaker 1: are are are living, and he has eight grandkids between
Speaker 1: his three sons, so he's thinking through. He's thinking further
Speaker 1: down the line in terms of what life is going
Speaker 1: to look like for them. I'm not sure that even
Speaker 1: all my sons and spouses are well educated and earning
Speaker 1: a good living. I'm not really quite sure they can
Speaker 1: afford to put their children through advanced degrees like I
Speaker 1: was able to do with my own children. That is
Speaker 1: a concern that weighs heavily on me. I want to
Speaker 1: bring in one other person you spoke to, and her
Speaker 1: name is Gayl Bennington. So Gail is a retired psychologist.
Speaker 1: She is married to a retired public school teacher and
Speaker 1: basketball coach. They lived just outside of Lansing, uh Michigan
Speaker 1: in Michigan. And she's an interesting character in that she
Speaker 1: will tell you that she started cutting back spending in
Speaker 1: the pandemic and she's just living her pandemic life now
Speaker 1: and that's her kind of new reality, sort of adjusted
Speaker 1: for inflation, if you will. Let's listen to what she
Speaker 1: had to say. I've always been like this too. I
Speaker 1: think you just have to worry about where your money
Speaker 1: is going, and so I never really spend anything without
Speaker 1: being quite aware of is this the best deal I
Speaker 1: can get? Is there any way that I can save
Speaker 1: money doing this? And frequently do I really need this
Speaker 1: or do I just want it? So our Tom Mainlee
Speaker 1: and Gayl Bennington typical of what you found when you
Speaker 1: reached out through the Pole and when you started talking
Speaker 1: to people about their experiences. No. Absolutely, So Tom and Gail,
Speaker 1: like other respondents to the Pole, are really interesting in
Speaker 1: particularly when he gets to talking about their kids and
Speaker 1: the future of the Daisy and this is something that
Speaker 1: we've talked about a lot in America in terms of
Speaker 1: views of the middle class. Okay, it's one thing to
Speaker 1: be in the middle class, but what do I expect
Speaker 1: my kids? And it was like the American dream was,
Speaker 1: you know, the cliches every generation, the parents want their
Speaker 1: children to do better than they did. Absolutely. Now I
Speaker 1: think this gets into a little bit into partisan politics.
Speaker 1: So Tom is a Republican, Gail is a Democrat, and
Speaker 1: they have a different take on where the economy is going.
Speaker 1: We see that in the polls Republicans tend to be
Speaker 1: more pessimistic than Democrats, who are much more optimistic about
Speaker 1: what lies ahead. But both Republicans and Democrats tend to
Speaker 1: be actually in this middle class Cohort, tend to be
Speaker 1: really quite optimistic about the future they see for their
Speaker 1: kids and the expectation that their kids are going to
Speaker 1: do better. And in fact, Gail is really interesting and
Speaker 1: that she's got a daughter. She will tell you that
Speaker 1: she grew up and they were fairly frugal growing up.
Speaker 1: They lived in a middle class suburb of Lansing, but
Speaker 1: that they were probably at the bottom end in terms
Speaker 1: of income because her husband was a public school teacher
Speaker 1: rather than a manager at a big company, and that
Speaker 1: they lived a fairly frugal life, and in fact their
Speaker 1: matter is a twenty four year old biomedical engineer. And
Speaker 1: Gail laughs because her daughter now is earning more than
Speaker 1: her husband ever did as a public school teacher, as
Speaker 1: a twenty four year old engineer, and by the way,
Speaker 1: is spending a lot more and a lot more freely
Speaker 1: than her mother ever did. And so Gayl will say,
Speaker 1: you know, we're at this good place in life where
Speaker 1: we're going to survive. We've got enough stashed away for retirement,
Speaker 1: we've got our home, and we're not going to be
Speaker 1: a burden to our daughter, who, by the way, is
Speaker 1: already enjoying a better life than we ever did. From
Speaker 1: my daughter, I think that she will end up being
Speaker 1: the kind of person where if she wants something, she'll
Speaker 1: be able to get it. And I've never felt like that,
Speaker 1: even though I probably could. I mean I could, I
Speaker 1: could just go out and get something if I wanted it.
Speaker 1: I could just go out for dinner if I wanted to.
Speaker 1: But I don't do that. I'm always aware of I
Speaker 1: have a budget. I have a strict budget, and and
Speaker 1: so I think that's being middle class, always being aware
Speaker 1: of and I really spend this money when we come back.
Speaker 1: My conversation with Sean Donning continues, it's a chance to
Speaker 1: forget that we're a lower middle class neighborhood living under
Speaker 1: the flight path of the Orlando Airport and trick people,
Speaker 1: trick people into thinking we're a scary, upper middle class
Speaker 1: neighborhood that people would want to visit and get candy from.
Speaker 1: I'm back with Sean Donning. That clip from the sitcom
Speaker 1: Fresh Off the Boat, where the character lewis played by
Speaker 1: Randall Park is touching on our complicated feelings about home ownership. Sean, earlier,
Speaker 1: you mentioned something really important, which is one of the
Speaker 1: things that allows the middle class to build wealth, to
Speaker 1: feel good even in uncertain times, is that they own
Speaker 1: a home. And the thing that you and our colleagues
Speaker 1: founding in reporting and writing this story is that homeownership
Speaker 1: seems to be the cornerstone of the middle class, absolutely,
Speaker 1: and it's you know, about two thirds of American households
Speaker 1: live in a house that they own, but that has
Speaker 1: a huge impact on the wealth of a family, right
Speaker 1: And we've just seen what is a remarkable period in
Speaker 1: terms of wealth accumulation, mainly because of that property wealth.
Speaker 1: In two thousand and twelve, Americans had about nine trillion
Speaker 1: dollars in home equity across the country. This is middle
Speaker 1: classes of all folks. This year that's topped out above
Speaker 1: twenty nine trillion dollars. We've added twenty trillion dollars in
Speaker 1: wealth just associated with property in the last decade, which
Speaker 1: is a remarkable number, and that is what is behind
Speaker 1: that wealth of the middle class. To a large extent,
Speaker 1: about thirty six percent of the net worth of the
Speaker 1: middle class is tied up in property. Is that home equity.
Speaker 1: Then you get retirement savings and other things, but that's
Speaker 1: the biggest component of wealth for folks in the middle class.
Speaker 1: The big question we have now, and we see this
Speaker 1: really especially among younger Americans and folks who are lower income,
Speaker 1: is that you have this divide in America between a
Speaker 1: renter class and a homeowner class. And that may in
Speaker 1: fact be the most pertinent class division in America, both
Speaker 1: now and going forward. And the other but since there's
Speaker 1: always one of them, is that even people who own
Speaker 1: a home, we're able to buy it at a lower price,
Speaker 1: perhaps years ago they also have concerns because so much
Speaker 1: of their wealth is in their homes that their housebound.
Speaker 1: The things you see in a recession, and economists will
Speaker 1: tell you this, is that you see mobility slow down.
Speaker 1: People stopped moving. And one of the reasons, especially when
Speaker 1: housing prices turned down, and we saw this in two
Speaker 1: thousand and eight and two thousand and nine when we
Speaker 1: had the housing crash, then is the value of the
Speaker 1: homes dips below what you may own on a loan.
Speaker 1: We're less at a risk of that now, But what
Speaker 1: we are at a risk of is this perceived wealth,
Speaker 1: this paper wealth, taking a big hit and affecting how
Speaker 1: people behave in the economy. And secondly, if someone is
Speaker 1: transferred for work and Tom Maylie ran into this with
Speaker 1: one of his sons, all of a sudden, they may
Speaker 1: be going from a low interest rate mortgage to a
Speaker 1: much higher interest rate mortgage and that may change their lifestyle,
Speaker 1: the type of home they can afford, and so on. Also,
Speaker 1: difficult to take money out of the house in the
Speaker 1: form of a home equity loan if you hit a
Speaker 1: rough patch because those interest rates are really high to
Speaker 1: absolutely so. One of the things that we saw during
Speaker 1: the pandemic was an enormous boom in refinancing a lot
Speaker 1: of people lowering their monthly payment but also taking out
Speaker 1: some of at equity and using that essentially to keep
Speaker 1: up in a lot of respects. And we're going to
Speaker 1: see that change. Another person quoted in the story is
Speaker 1: Brandy Romero, and she talks about this kind of conflict
Speaker 1: between owning a house and not being able ever to
Speaker 1: move from that house. Yeah. No, So Brandy Romero is
Speaker 1: really interesting. She moved from Louisiana with her huts and
Speaker 1: now five kids a few years ago. Uh. They live
Speaker 1: in Wyoming, just outside Casper, Wyoming, and she's got literally
Speaker 1: millionaires uh and a YouTube star moving in around the
Speaker 1: corner and building big houses. And she's in her home
Speaker 1: and they bought it recently, and they're starting to wonder
Speaker 1: whether this may be the last home they ever buy,
Speaker 1: and how they're gonna make ends meet going forward. Brandy
Speaker 1: is a member of that middle class. She's also at
Speaker 1: night driving uber and Lyft to try and make ends meet.
Speaker 1: Earlier in the show, we heard from some older people.
Speaker 1: Our senior producer Katherine Fink went out to talk to
Speaker 1: people in their twenties and third means about this idea
Speaker 1: of home ownership, whether they own a home or if
Speaker 1: they think they'll ever be able to afford one. I
Speaker 1: don't own a home, so I think a middle class
Speaker 1: people often rent and don't own a home. So I've
Speaker 1: seen myself there. It took a while of saving. It
Speaker 1: also took basically moving. I used to live in the
Speaker 1: Bay Area and groove to a place where I was
Speaker 1: able to buy a home at some point, but it's
Speaker 1: not happening in any near future. I would have to
Speaker 1: switch careers and not go to school. Yeah, I'm twenty
Speaker 1: five and I still lives at my parents place because
Speaker 1: where I want to move is too expensive for me
Speaker 1: to realistically govern. So it's either going to a bad
Speaker 1: place or staying with my parents. By a house in
Speaker 1: the way that I am now, we would take like
Speaker 1: three or four lives, So I will need to see
Speaker 1: what I can do to to make that happen. You
Speaker 1: know how I describe the economic and social classes in
Speaker 1: this country. The upper class keeps all of the money,
Speaker 1: pays none of the taxes. The middle class pays all
Speaker 1: of the taxes, does all of the work. The ploorer
Speaker 1: there just to scare the get out of the middle
Speaker 1: class becomes showing up at those jobs. I'm back with
Speaker 1: Sean Donna and that, of course, there was a legendary
Speaker 1: George Carlin capturing those tensions between those at the bottom
Speaker 1: in the middle and those at the top, so searing.
Speaker 1: I guess the big question now is what is the
Speaker 1: future of the middle class um When of the economists
Speaker 1: he spoke to at Berkeley, Gabriel Zuckman says that maybe
Speaker 1: the idea of the middle class is a notion that
Speaker 1: has come and gone. Yeah, And Gabriel makes a really
Speaker 1: interesting point as well, which is that wealth has kind
Speaker 1: of protected the middle class since the nineteen eighties and
Speaker 1: the growing wealth. So in the nineteen eighties wealth, the
Speaker 1: average wealth of American households is about three times a
Speaker 1: year's worth the salary right year's income. Recently that's gone
Speaker 1: up above six times, and if you think about that,
Speaker 1: you start to think about, Okay, how that has insulated
Speaker 1: the middle class in particular, who have really benefited most
Speaker 1: from this property boom and this growing wealth that we've seen.
Speaker 1: How that has insulated them from some of the harder
Speaker 1: realities that we've seen in terms of stagnant media incomes,
Speaker 1: the way the economy has changed, and so and Gabriel's
Speaker 1: point is we're coming to the end of that era possibly,
Speaker 1: and that's the big test in the years ahead. So
Speaker 1: we're entering this prolonged period of inflation almost certainly going
Speaker 1: to result in recession. The Federal Reserve and other policymakers
Speaker 1: are trying to get their arms around it, throwing every
Speaker 1: tool they've got. How is that going to affect this
Speaker 1: wealth that is kind of the backbone of the American economy.
Speaker 1: So this is this interesting economic moment that we're at.
Speaker 1: Inflation attacks the income of the middle class, and it
Speaker 1: attracts the paycheck that you get to fight that inflation.
Speaker 1: When you raise interest rates, you're affecting asset prices, the
Speaker 1: stock market, you're affecting the property market, and so on.
Speaker 1: And so we're at this curious moment where to fight
Speaker 1: the inflation that's attacking American middle class paychecks, the Federal
Speaker 1: Reserve is actually going to be destroying some of that
Speaker 1: wealth of the American middle class by slowing down the
Speaker 1: property market, by slowing down the stock market and so on.
Speaker 1: And that wealth is gonna go down for some time.
Speaker 1: How long we don't know. That depends on the resilience
Speaker 1: of the American economy. That depends on how long it
Speaker 1: takes to to bring inflation down closer to where the
Speaker 1: FED wants it to be the kind of healthy levels.
Speaker 1: But that's the episode we're going into for the American
Speaker 1: middle class. You know, my paycheck may go further at
Speaker 1: the grocery store, but my home is going to be
Speaker 1: worth a little bit less than it was. Sean, what
Speaker 1: about people who are at the bottom who are trying
Speaker 1: to work their way into the middle class, hoping to
Speaker 1: get to that you know, bottom wrong of the middle class,
Speaker 1: and are having a really difficult time doing that because
Speaker 1: wages are just not keeping up with inflation. So one
Speaker 1: of the things we've seen in the pandemic is arise,
Speaker 1: an increase in inequality, and a lot of what's been
Speaker 1: behind that has been the burden that has been felt
Speaker 1: by folks and lower income jobs and how they've been
Speaker 1: hitting the pandemic. We've seen incomes rise coming out, but
Speaker 1: we haven't gotten away from this basic structural issue in
Speaker 1: the US economy, which is, if you were in the
Speaker 1: top one percent in this economy, you have had a
Speaker 1: great couple of decades. If you're in the bottom ten
Speaker 1: perc the bottom actually in the US economy, you've been
Speaker 1: struggling and you're going to continue to struggle for some time.
Speaker 1: Just some numbers to think about. At the beginning of
Speaker 1: our conversation, we talked about the wealth of that middle
Speaker 1: class and how they were wealthier than they had ever
Speaker 1: been in March of this year. That wealth was thousand
Speaker 1: dollars on average for that hundred million people in the
Speaker 1: middle class. You take that to the two point five
Speaker 1: million people, that much more elite group who are in
Speaker 1: the top one percent, their average wealth in March of
Speaker 1: this year was almost twenty million dollars. You look at
Speaker 1: the bottom fifty five million people almost their average wealth
Speaker 1: was just twelve thousand dollars this year. The reality is
Speaker 1: we still have this fractured economy. That middle class may
Speaker 1: be strong, the path in the middle class is still
Speaker 1: incredibly difficult because there are still a lot more people
Speaker 1: than there are in the middle class sitting below them
Speaker 1: in that bottom fifty of the US economy. Yeah, we
Speaker 1: have corporate profits that are really high. A lot of
Speaker 1: that money is going to shareholders in the form of
Speaker 1: stock by bags and um we're minting a whole lot
Speaker 1: of billionaires, and yet some of that profit could potentially
Speaker 1: be going to increase wages, which would then elevate people
Speaker 1: possibly into the ranks. Yeah, we briefly had that conversation
Speaker 1: coming out of the pandemic about maybe this was labor's moment,
Speaker 1: maybe people wages were going to rise. The problem is
Speaker 1: they haven't kept up with inflation. And we know that
Speaker 1: corporate profits have outstripped inflation in a lot of regards.
Speaker 1: So the middle class, that bottom of the economy have
Speaker 1: borne the brunt of inflation and companies have continued to
Speaker 1: mint those profits. Now, we'll see what happens as we
Speaker 1: go forward, as the economy slows down, as the FED
Speaker 1: slows things down economy, what happens to corporate profits. In
Speaker 1: a traditional recession, you would see those get squeezed and
Speaker 1: people at the top gets squeezed as well. But the
Speaker 1: sad fact of the American economy is when times get tough,
Speaker 1: it's usually people at the bottom of the economy who
Speaker 1: suffer most, and it's that pathway to the middle class
Speaker 1: that gets broken. Is the idea of the middle class
Speaker 1: still a relevant thing. Is it something that we should
Speaker 1: be thinking about as a real segment of the economy
Speaker 1: more than you know, a notion likes me right about this?
Speaker 1: That's an enormous question. It's a really hard question to answer.
Speaker 1: But I think one of the things we need to
Speaker 1: remember is that the American middle class and the idea
Speaker 1: of it, while it's been celebrated in popular culture, while
Speaker 1: it's been celebrated in economics and so on, has always
Speaker 1: been a morphous. It's always been self interested, and it's
Speaker 1: also often been kind of exclusionary. You know, that middle
Speaker 1: class in American popular culture is a pretty white middle
Speaker 1: class through the years, and we know that some of
Speaker 1: the key components of it, such as housing wealth, that
Speaker 1: not all parts of the American population, the black population
Speaker 1: in particular, have had the same access to that over
Speaker 1: the years. So it may be time for us to
Speaker 1: kind of park that idea and move on and think
Speaker 1: more specifically about people's circumstances. That idea of renter versus homeowner,
Speaker 1: that idea of college graduate versus high school graduate, uh,
Speaker 1: that idea of a rural American versus an urban American, uh,
Speaker 1: and so on. But you know, we may want to
Speaker 1: have that debate, but I think Americans for a long
Speaker 1: time are going to be identifying as middle class, are
Speaker 1: going to have this aspiration to join the middle class
Speaker 1: because at the end of the day, it's a pretty
Speaker 1: good place to be. Sean, thanks so much for coming
Speaker 1: on the show. Thanks for listening to us here at
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