Two statistics out in the past week highlight the shrinking middle class and the negative impact it is having on a wide range of individuals and families struggling to get by.
Last week, economists at UC Berkeley, Oxford University and the Paris School of Economics said a review of IRS data showed that the wealth gap between the top 1 percent and the rest of the country's wage earners has grown larger than it has been at any time in about a century.
The top 1 percent encompasses families with incomes above $394,000. Since the recession, this group has seen its incomes increase 31 percent. The remaining 99 percent was income growth of only 0.4 percent, and, for many, it was lower.
In another story, The Associated Press reported this week that the unemployment rate of families with incomes of $150,000 or more is just 3.2 percent, while the unemployment rate of those making $20,000 or less is 21 percent. That rate, The Associated Press reported, almost matches the rate for all workers during the Great Depression.
As more skilled workers are forced to take lower paying jobs, those who traditionally have sought the positions are being squeezed out.
"Based on employment-to-population ratios, which are seen as a reliable gauge of the labor market, the employment disparity between rich and poor households remains at the highest levels in more than a decade, the period for which comparable data are available," The Associated Press reported.
Older people who have had to put off retirement to pay the bills, as well as a segment of the population that is underemployed and those who have to take an additional part-time job to make ends meet, are making it harder for lower income individuals and families to find work. The result is more people in need of assistance.
"The overall rise in both the unemployment rate and low-wage jobs due to the recent recession accounts for the record number of people who were stuck in poverty in 2011: 46.2 million, or 15 percent of the population," The Associated Press reported.
This income inequality and the squeezing out of the middle class doesn't bode well for our recovery, which has been limping along since the recession. It also is limiting opportunities for a new generation of workers who are getting out of school or college looking to start their careers.
We need to take a comprehensive look at the forces driving the changes that are pushing our middle class to extinction and driving more families into poverty, and we need to find ways to reverse the trend. Otherwise, the American dream will remain just that, a dream, for a growing percentage of families and individuals.
