March 31, 2026 • 52 mins
Lots of nations gauge the health of their country by how the middle class is doing. There’s just one issue with that – no one can say exactly what defines the middle class. But even when you take a guess, it seems like the health isn’t so good these days.
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Speaker 1 (00:01):
Welcome to Stuff You should Know, a production of iHeartRadio.
Speaker 2 (00:11):
Hey, and welcome to the podcast. I'm Josh and there's
Chuck and Jerry's here to us sitting in for a
good old fashioned stuff you should know episode.
Speaker 3 (00:21):
That's right, not one of those new fangled ones.
Speaker 2 (00:24):
No, no, not one of the new ones that are
just like you know, all hair gel and yeah, you know, style,
no substance.
Speaker 3 (00:31):
It still has that new podcast episode smell.
Speaker 2 (00:34):
Yes for sure. Speaking of new Smell, how do you
feel being fifty five? Birthday boy?
Speaker 3 (00:41):
New smell? You know, it's great. I think I have
actual privileges now that come with it.
Speaker 2 (00:48):
That age, like cheap coffee at McDonald's that kind of stuff.
Speaker 3 (00:52):
Yeah, I don't know about McDonald's, but like I think
I think I can play golf for a little cheaper now,
like literally as this your rate, which is that's hysterical.
Speaker 2 (01:03):
Yeah, well I think you can get an AARP membership
now too.
Speaker 3 (01:07):
Oh yeah, I mean you're probably already getting that stuff
in the mail, right. They start early.
Speaker 2 (01:12):
H No, I'm not even fifty yet. They won't let me.
I keep applying and they keep denying.
Speaker 3 (01:17):
Okay, maybe fifty. I mean they start sending in that
stuff years ahead.
Speaker 2 (01:20):
Yeah, we used to have when you had to get
it for work or something like that. But they found out,
you know, what our age is, and they got really mad.
Speaker 3 (01:27):
They said, we've been spending sending things to spring chickens.
Speaker 2 (01:32):
But yeah, well, let me know how the golf thing goes,
and if you get cheap coffee at McDonald's, and what
being a senior is like, Chuck, because you know, I
think for me and Jerry and everybody, we just want
to wish you a happy birthday.
Speaker 3 (01:44):
I appreciate that.
Speaker 2 (01:45):
People went bonkers on Instagram.
Speaker 3 (01:48):
Oh yeah, was that you?
Speaker 2 (01:50):
Yeah, of course.
Speaker 3 (01:51):
I figured, you know what my uncle, My uncle wished
you a happy birthday?
Speaker 2 (01:57):
Did he on that post? I didn't see that.
Speaker 3 (01:59):
Yeah, it's pretty funny. Then THO was a confusing series
of texts where he was finally like, is it your birthday?
It was like those a few days ago.
Speaker 2 (02:07):
Sure, he said, who is this? Yeah exactly, he said, McGovern,
not mcguffin, no McGovern. Okay, all right, let's start talking,
because we're talking about the middle class in America at least,
although this definitely extends to other countries like the UK,
(02:28):
some of the Nordic countries, Australia, there's not an obsession
but a real like obsession with the middle class, how
it's doing, how mobile it is, upwardly, downwardly, and there's
it's essentially the middle class is like the thumbnail metric
for the health, the real, true health of a society
(02:50):
and economy.
Speaker 3 (02:53):
Would you agree, Yeah, I mean I think so. And
I think that used to be a real like it's
always been a talking point in the United States, but
I think it used to be a real, genuine talking point,
whereas now I think it's like, you know, are all
the rich people doing great? Okay, all right, now let's
talk publicly a little bit about the middle class, I
(03:13):
guess right.
Speaker 2 (03:14):
But not everybody's fallen for that. There's like this whole
idea that the middle class and the health of the
middle class was a canary in the coal mine. Yeah,
and not only is the canary dead, it caught fire
at some point as far as a lot of people
are concerned about the United States middle class at least
because there's this idea that it's dead. But then if
(03:34):
you read up a little further on it, you come
across other people who are like, no, no, dude, look
at these statistics, like the middle class is actually doing great,
way better than they used to be doing, and other
people are like that just doesn't quite add up. So
when you get into it, it's really tough to define
the middle class. And you can monkey around with who's
(03:55):
middle class or who's not and come up with all
sorts of different profiles. But I think it just matters
what people who would probably self identify as the middle
class feel about the economy and about their prospects in life.
Speaker 3 (04:08):
Yeah, for sure. Like what is that the vibe session? Yeah?
Speaker 2 (04:13):
What was her name, Kyla Scanlon. She's a kind of
a gen Z financial explanatory journalist. Yeah.
Speaker 3 (04:21):
Yeah, so that's the idea of like sort of like
not falling for being gas lit by everything you're being
told about how great it's going. And there's something called
a vibe session. Am I saying that?
Speaker 2 (04:33):
Right?
Speaker 3 (04:34):
Yeah?
Speaker 2 (04:34):
Vibe session?
Speaker 3 (04:35):
It just sounds weird because a vibe session sounds like,
you know, something I do late on Friday nights.
Speaker 2 (04:40):
Right, This is with a C instead of an S.
Speaker 3 (04:42):
Yeah exactly, and it's much less ire. Yeah, oh man,
But yeah, the idea of you know, various politicians, you know,
whenever anyone's running for something talking about typically reelection, talking
about how great everything really is, whereas everyone is like, yeah,
but why doesn't it feel that way. That's a vibe
(05:04):
session instead of like a true recession.
Speaker 2 (05:06):
Yeah, and she was pointing out like that actually can
become self fulfilling. Yeah, sure, because if enough people start
feeling like, no, things aren't going so good, they start
not spending money, and that actually can trigger a recession
just from the fact that people feel that way, no
matter what the metrics say. So, yeah, we'll talk about
all that, but let's talk about the history of the
(05:27):
middle class because it hasn't always been around.
Speaker 3 (05:29):
Yeah, it's interesting if you look at, you know, the
history of the middle class in the West. It generally
you can point to late medieval Europe as you know,
when things started to get cooking a little bit as
far as the middle class goes, and you know, we'll
walk you all the way through you know, modern times.
But as cities became a thing, you know, all of
(05:50):
a sudden, you needed a middle class to sort of
administer what the aristocracy was asking for in a lot
of cases. Is so you know, there was this distinct
group kind of created that wasn't aristocracy, and it wasn't
the peasant class. And I think one word, and I
believe they've eve been done a short stuff on the bourgeois, Yeah,
(06:14):
didn't we?
Speaker 2 (06:15):
Yeah, and what it means to be bourgeoisie. That's right,
there's another word for him burgers too, and apparently both words.
I don't I don't remember this, but I'm sure we
talked about it in the bourgeois short stuff. That that's
the name of the cities, the fortified cities where they worked,
right or where they emerged from. Yeah, and the burger
(06:37):
is that's why the burger Meister is called that in
either Rudolph or Frosty or some rankin bass something like
the scary BG exactly. Yeah, Burgermeister means mayor so he's
like the head of the city essentially. Anyway, those were
the merchants, the bankers, professionals that emerged to kind of
(06:59):
fill that space between the peasants and the aristocracy. And
you could call them the first middle.
Speaker 3 (07:05):
Class, yeah, sort of. But they grew in size and
wealth and power, so they were kind of like, Hey,
we tricked everybody. We're not really the middle class. We're
I mean maybe upper middle class. Certainly obviously not aristocracy
because they weren't born into that. But as people got wealthier,
there was kind of a true middle class that came
(07:25):
after that, where you needed people to do things like
bookkeeping and you know, kind of handled the business of
the people that previously had said that they were the
middle class, even though no one was using those terms,
you know, we should point.
Speaker 2 (07:39):
Out, right, no, nothing like that. There was also a
lot of changes where before it was wealth and power,
right because that's what nobility kind of based itself on.
So the earliest middle class kind of based itself on
those same markers. But thanks to the Renaissance and the Enlightenment,
other markers kind of came along. The whole idea of thrift,
(08:02):
of saving your money, of not being just frivolous with
your money, that became a really big middle class social marker,
certain tastes, certain ways you would dress. And then of
course wealth, wealth has always been a marker for the
middle class, especially the upper middle class. But these were
(08:25):
all like, all these things seemed so normal to us
and so ingrained that it seems alien almost to kind
of tease this stuff out and identify it historically.
Speaker 3 (08:36):
Yeah, for sure. And this was you know, in Europe
at the time when the United States was born. Olivia,
by the way, did a great job with this article.
I thought, uh, greed, she is a heck of a writer.
So the United States was, you know, as she points out,
kind of a sort of a bourgeois not a I
(08:58):
wanted to say, project or a test an experiment, maybe
the American experiment. Yeah, because there were people like Thomas
Jefferson who were very much believed like, hey, we're going
to build this new country on and not on the
backs of but like the middle class, these people that
owned farms and could provide for their family and that
(09:18):
own some land, like this is the American experiment, that
like the goal that we're striving toward.
Speaker 2 (09:26):
Yeah, and those yamen farmers were typically not slave holding.
So his idea was to basically become a nation of
self sufficient farmers growing food for their families and themselves
and then selling some in the market. And that just
is not how it went, because the wealthy landowners who
had actually had slaves became essentially the power, the elite,
(09:51):
the people actually pulling the levers, and eventually they except
in the Antebellum South. They kind of replaced that wealthy
land owning and agriculture with industry as the Industrial Revolution
started in Europe and then spread to the US, and
then we had a real disparity in power and wealth growing.
Speaker 3 (10:14):
Yeah, for sure, because if you're owning a factory or
owning a railroad or a share of a railroad, that
is a very distinct upper class. It may not be aristocracy,
but aristocracy became less and less important as time went on.
Flashed forward to like the middle of the nineteenth century,
and you had people like Karl Marx, and we should
(10:36):
say Carl Marx was trying to sell something which was Marxism,
but he would come along and say like, hey, they're
really two classes. There's the working class and then everybody
else that's exploiting the working class.
Speaker 2 (10:53):
Yeah, and the exploiters or the oppressors and the oppressed.
I think he also put it, they owned the capital.
They were the capitalists. They were the ones who could
open a factory and employ you and you depended on
them for money, but they were exploiting your labor. Yes,
And in this sense where there's an owning class and
(11:14):
a working class, there's really no room for a middle class. Eventually, though,
a middle class still emerged because those capitalists aren't going to,
like you said, do their own books. They're not going
to go teach the next generation of workers to come
work in their factory. So like there was a need
for people to train the working classes to better serve
(11:35):
the capitalist elite. And that's where the middle class really
started to emerge in the United States in particular, but
also in the UK, Australia, some of the other places
in the West. That's where that the middle classes we
understand it now, really developed.
Speaker 3 (11:52):
Yeah, for sure, and it was there during the time
of Marx, but that wasn't good for Marxism to point
that out. So yeah, it was very much easier for
him to say, like you're being exploited or you're the exploiter.
It was a little black and white, yeah, for sure.
So in the nineteenth century, the middle class values system
started to kind of take shape, which is, you know,
(12:15):
sort of this the value system that ideally is still
around today, which is the idea that you know, if
you work hard, you save up, you can be a success.
In the United States, you know, they agreed that people
should vote more and more like have access to voting.
And of course that started with like, hey, maybe men
(12:37):
that aren't land owners should be able to vote, and
then that kind of spread throughout the years to you know,
people of different races, and then women finally. But the
idea that expanding voting rights and expanding education was always
sort of a middle class value, and then early on
it was you know, the role of women in society
has definitely changed as far as the middle class value goes,
(12:59):
but early on it was, hey, women are very important
to keep the home, but really be the moral center
of the world. Of the home, you.
Speaker 2 (13:10):
Know, yeah, of the family, which was of utmost importance,
the nuclear family, which became really important in the Victorian
era and really informed the middle class values too, right,
and all of those seem like so we take them
for granted so much as values typically aside from you know,
forcing women to work in the home whether they like
(13:30):
it or not, that just goes to show you how
effective the middle class was at spreading its basically imposing
its values on everybody else in the West.
Speaker 3 (13:40):
Yeah, for sure. Should we take an early break here, Well,
it's not too early, actually, I think, so, Yeah, all right,
we'll take a break. I think that's a good setup.
Middle classes forming. Everyone's getting excited, and we'll fast forward
to the twentieth century right after.
Speaker 2 (13:54):
This definitely about our childhood et r.
Speaker 1 (14:03):
Y Skur, all.
Speaker 3 (14:20):
Right, I promised talk to the twentieth century in the
middle class, and that's where we are, uh specifically, you know,
this is when the middle class in the US really
really emerged as like a massive thing, like the largest
portion of a like set of people in the US
became middle class in the in the twentieth century, and
really after the war. It was powered by the New Deal.
(14:43):
Of course, after World War Two, the United States was
in a unique position as as victor, but also victor
who didn't have the war fought on their you know,
mainland soil, right, so we didn't have to do all
this rebuilding after the war. So we were in a
position to really he hit the throttle on economic stimulus,
(15:04):
which was brought about via the New Deal.
Speaker 2 (15:07):
Yeah, and World War two. Just the sheer amount of
money thrown into the economy from the government for World
War two helped as well, right, And we had all
those technologies that we developed that gave us things like
pop tarts and stuff immediately after the war and completely
improved the quality of life for people in the United States,
especially the middle class. Right, so you have government policy
(15:29):
like the New Deal, like the National Labor Relations Act
that are favoring workers, this working class that is becoming
the middle class. And then one of the other, really
really really big aspects of what built the middle class
and the United States and elsewhere were unions. Union membership,
(15:50):
because if you can bargain collectively, you can't be exploited
nearly as easily, and that means that life is a
lot more fair for you, the worker, because you're allowed
to get together and say no, you can't do that
to any of us. If you do that to one
of us, you do it to all of us, and
we'll all leave.
Speaker 3 (16:07):
Yes, I mean we did. We did a great episode
on unions years ago, So I advise you to go
listen to that now if you want to learn more
about those But no, no, no, everyone else. I mean
you can if you want. Okay, a little refresher, But
union membership really bloomed in the nineteen thirties and forties.
I think at the beginning of the twentieth century, it
(16:28):
was in the low teens union membership and then it
really really rose from there, and so did wages. Between
nineteen forty and nineteen sixty, if you were a non farmer,
your median weekly income rose. And these by the way,
everything we're doing is in twenty twenty five dollars, just
to make it easier to understand, but your median weekly
(16:50):
income for a non farmer went from five hundred and
fifty dollars to over one thousand dollars, almost eleven hundred bucks.
And that was across all you know, a lot of
edgecation levels, you know, different racial groups, different industries. That
was sort of a broad change. So, you know, it
was an interesting time in that, you know, pay for
(17:11):
people and what is now like a solid middle class,
it was really rising. They were taxing the rich and
constraining corporate power such that some people called this this
time the Great Compression, where the wealth levels were sort
of smashed together on a graph instead of expanded vastly
like we are now. We're gonna have some shocking numbers
for you later in this episode.
Speaker 2 (17:33):
Yeah, So that era between nineteen forty and I think
a lot of people essentially put it at the mid
seventies is when they say the party really started to end.
Was just as economic boom golden age for the United
States and the middle class. And there was another big
factor too, which was home ownership. We did I remember
(17:56):
in our racial discrimination or housing discrimination episode that we did,
we pointed out that owning a home has long been
really important, especially for the middle class, because that is
how you generate wealth. For most people, your home just
appreciates some value over the years, and then you can
also use that home to transfer that wealth to your kids.
(18:18):
So it's also a form of generational wealth transfer for
the middle class. So it's really big deal to own
your own home. And that was another big thing that
happened after World War Two. Home ownership went up quite
a bit.
Speaker 3 (18:30):
Yeah previous and this is going way back, but between
eighteen ninety and nineteen thirty, home ownership was under fifty
percent of the United States. And eventually, you know, thanks
to the suspect mortgages that they were handing out like
candy in two thousand and four, that peaked at I
think it was close to seventy percent, like sixty nine
(18:50):
or something.
Speaker 2 (18:51):
Yeah, for sure, and then I think it dropped down
to something like sixty five and is basically plateaued since there.
But this is the point that that you could own
a house, you could own a car. Yeah, you could
have a family of you know, a husband and wife
and two kids and live in the suburbs, and the
(19:12):
kids would go to a nice school. And this was obviously,
this is the most idealized version what we're talking about.
There's a lot of disparity. There was a lot of
people who are still very poor in the United States too,
But overall, if we're just focusing on the middle class,
you could do all of these things and have a nice,
comfortable middle class life, a pension after you retired, on
(19:33):
one salary, one income, because again, one of the main
values of the middle class at this time was that
the mother stayed home, raised the kids, and made the
house the center of the nuclear family, respite from the
rest of the world. One salary could do all of that.
Speaker 3 (19:52):
Yeah, and it was you know, people weren't as far
apart as they were financially speaking, like you may live
in the same neighborhood or maybe the neighborhood next to
your boss. You know, blue collar workers and white collar
workers were were way more you know, just kind of
squashed together, like your children probably went to school. If
(20:12):
you were like a line worker at an auto plant,
you know, you may not have as nice of a
car or as big of a house as your manager
or your boss, but you know, it was in the
It was in the same world. And you know, I
still remember that stuff growing up in the eighties, like
the watch any John Hughes movie, and like all the
(20:32):
kids at the same school. They were like, you know,
the rich kids and then the kids that lived in
that neighborhood, right, but it wasn't extreme wealth and poverty.
Speaker 2 (20:42):
No. And the fact is they were all going to
the same school exactly. There was like a leveling from that.
So yeah, that was a really big deal. And this
is this is going on through about to the mid
seventies when things started to decline for the middle class. Right. Yeah,
there's there was the end of the post war boom.
(21:03):
I mean, that's really tough to keep up in the
form that it was in for very long. Yeah, and
it's kind of astounding it stayed up that long. Part
of it was that the US was in that unique position,
like you said, it didn't have to rebuild after World
War Two like Europe and Japan did well. After a
few decades, Europe and Japan were able to rebuild and
(21:23):
they started to catch up to the United States, which
meant that they were taking more share of the United
States pie with say like exports and manufacturing and stuff.
That was one factor too. There was also the oil crisis. Yeah,
I think that that made a bigger dent than I
ever realized that that was like a history changing event,
(21:44):
the OPEC oil crisis, and then also political conflicts that
ultimately laid the bedwork for today's culture wars, civil rights movement, feminism, environmentalism,
LGBTQ plus US rights. All of these things were marginalized groups.
Previously marginalized groups came forward and said, no, there's no
(22:06):
reason we should be treated like second class citizens. That
created a tension in the United States. A lot of
corporations came in and figured out how to exploit this
for their own ends, and that eventually started to divide
people to where there was this sense of competition is
the bedrock of American capitalism, and American capitalism is the
(22:30):
bedrock of the middle class. It's part of the middle class.
It's a new middle class value. It's where we got
yuppies in the eighties.
Speaker 3 (22:37):
Yeah, for sure. The industrialization also happened. In nineteen seventy
if one in out of every four non farming jobs
in the US was in manufacturing, and by twenty seventeen
it was one and eleven. So other countries, you know,
as globalization and trade increased, other countries started making stuff
super cheap. Like this isn't a big surprise to anyone
(23:00):
to this. Imports from China started coming in, Imports from
other you know, Southeast Asian countries started coming in. Stuff
was a lot cheaper to buy, and you know, they
started automating a lot of stuff. It was, you know,
kind of the first automation boom was happening in the
nineteen seventies where factories didn't need as many people on
(23:20):
the line to do stuff that these new machines were doing.
So that coupled with deunionization, really, you know kind of
dropping off, was a huge factor.
Speaker 2 (23:32):
Yeah, and it really definitely declined that it's below ten
percent for the entire workforce in the United States. A
huge chunk of that is just from government jobs like teaching,
they tend to have a very strong union. But overall,
it went from like thirty five thirty six percent to
ten percent. And one of the reasons that that happened
(23:53):
is because the government basically withdrew its support for unions.
Not only did it stop passing legis enforcing legislation that
supported unions, it actually started issuing legislation that harmed and
crippled unions and essentially removed their power.
Speaker 3 (24:09):
Yeah, for sure. And then the last reason, you know,
we can't talk about the middle class and wealth disparity
without talking about Ronald Reagan. You know, he's the one
that kicked it off. And subsequent administrations definitely didn't do
the middle class any favors. But those Reagan era policies
that trickle down economics, cutting taxes for corporations, undermining labor unions,
(24:33):
cutting taxes on the top earners individually really transformed the
look of our nation heavily, heavily in favor of the
rich and you know, the top ten percent, especially the
top one percent. And like I said, other you know,
Democrats and Republicans since then have failed the United States
and their policies. I know, after the economic crash and
(24:57):
the real estate crash in two thousand and eight, there
were a lot of people, especially now in hindsight that
look back and say, you know what, we really had
an opportunity there, and the Obama administration failed us. When
we bailed out those banks with not very many strings attached.
We had some leverage there to sort of get some
changes in place that could have helped, you know, shift
the look of the financial outlook of our country, and
(25:19):
we didn't do it.
Speaker 2 (25:20):
No, And what they would have been doing is undoing
damage that was done during the Clinton administration where they
repealed the Glass Stegal Act that kept banks from dabbling investments.
You were either a bank or an investment company, which
one and after that you don't have to choose, And
that's ultimately what helped lead us to that massive financial crisis,
(25:43):
the Great Recession.
Speaker 3 (25:45):
Yeah.
Speaker 2 (25:45):
So yeah, it's really easy and fun to pick on
Ronald Reagan and Margaret Thatcher for kicking all this off,
but they were not the only neoliberal presidents to come
along after the eighties.
Speaker 3 (25:56):
No, for sure, if you're talking about the middle class today,
you really have to start with like how do you
define the middle class? And Libya did a really great
job in this section. I think like there are a
lot of different ways that people and pundits like to
talk about what the middle class even is. Some social
scientists it's just a super straightforward income based definitions, which
(26:19):
is good in one sense because you can adjust that
depending on where you are in the world, Like a
middle class income in New York City isn't going to
be the same thing as in a rural area, so
they can you can adjust things economically based on just
a strict income based definition, which is kind of cool.
Speaker 2 (26:40):
Also, that means that the middle class doesn't move out
of reach of certain people too. Like if you just
have the median income and say that's the middle class,
As the median income grows, the middle class goes up
and some people stay behind. This is like here's the
middle class section, and you can get into it and
out of it, or drop out of it and go
above it. But it's going to stay in the same place,
(27:02):
and it's just going to it's going to change depending
on how wages rise. Yeah, it seems like a pretty
good it's a good idea to me. The most widely
used one comes from the Pew Research Center, and they
it's an income based approach that they use, but they
basically say that if your household income is two thirds
(27:24):
of the median household income or up to double the
median household income. You are middle class, right, and I
think in twenty twenty four that meant that your household
is very important too. That your household made between fifty
five thousand, eight hundred and twenty dollars to one hundred
and sixty seven thousand, four hundred and sixty dollars any
(27:46):
anywhere in there, you were middle class income wise.
Speaker 3 (27:50):
Yeah, and this is all obviously like pretext money.
Speaker 2 (27:53):
Right, yeah, oh yeah, I would think so. Yeah.
Speaker 3 (27:59):
So under that definition, the middle class made up sixty
one percent of households in nineteen seventy one, compared to
just fifty one percent in twenty twenty three. But at
the same time, the upper income category went from eleven
percent to nineteen percent and the lower percentage rose from
(28:19):
twenty seven percent to thirty percent. So what you're seeing
is like the wealth gap like happening in real time, basically.
Speaker 2 (28:27):
Yes, But that also suggests that eight percent of people
in the middle class moved up from the core middle
class to the upper income category. So that's what that's
an interpretation that a lot of people who are like, no,
the middle class is fine, suggest.
Speaker 3 (28:44):
Right, then three percent moved down.
Speaker 2 (28:46):
Right, Yeah, so that's yeah. Income is like, if you're
an economist, this is what you're looking at. If you're
say anthropologists or sociologists, you might say, well, who considers
themselves middle class? Maybe we should look at those people
and then kind of study them like that, like ask
people are you middle class or not? Are you working class?
(29:08):
You consider yourself upper class? And they usually either divide
it into those three lower class, middle class, upper class,
or else they divide it into quintiles lower class, working class,
which they would also call lower middle class, core, middle class,
upper middle class, and then gob smackingly rich.
Speaker 3 (29:28):
And one percent saying buzz office, none of your business.
Quit ask any questions.
Speaker 2 (29:33):
They have them arrested.
Speaker 3 (29:35):
So twenty twenty four was the last Gallop poll that
we have where someone said, like, hey, what do you
consider yourself? And in the United States, thirty nine percent
of citizens considered themselves middle class. Another fifteen percent said
there were upper middle class, which brings that grand total
to fifty four. Thirty one percent identified as working class,
(29:56):
twelve percent is lower class, just two percent of upper class,
which means a lot of those upper middle class people
were lying liars and that they're really part of the
upper class.
Speaker 2 (30:09):
Yeah, for sure, But I think also it's not I'm
sure some people were like I don't want to say,
like I feel upper class.
Speaker 3 (30:16):
And self identification, so it makes sense.
Speaker 2 (30:18):
Sure, But at the same time, also I think that
has to do with the idea that maybe based on income,
it's almost like that vibe session thing like, yeah, your
income would put you in the middle class, but you
don't feel wealthy. You feel like you could be ruined
by a healthcare crisis at any time. So I think,
especially with self identification, that gives you a sense of
(30:40):
the actual health of the economy as far as like
consumer confidence is concerned.
Speaker 3 (30:45):
Yeah, and there's you know, laziness factors in. You could
be in the upper middle class but also still have
a car tire sitting in your sideyard for sure, with
like typical markers of you know, different glasses.
Speaker 2 (31:00):
For sure, tires in your side Jock, I gotta get
mine moved.
Speaker 3 (31:05):
Emily got onto me for years about the car battery
that I had that I just it's like, got to
get rid of a car battery. I know you can, Oh,
you take it to like one of the auto stores,
I know, but none of those feel right.
Speaker 2 (31:21):
They know they take the core out and yeah it's
they recycle them for real.
Speaker 3 (31:25):
Yeah, because you've watched them do all that right from
beginning to help.
Speaker 2 (31:29):
I help on weekends as just as pro bono.
Speaker 3 (31:33):
That's my point is, I don't I don't trust any
of it. None of it feels right.
Speaker 2 (31:37):
All right, I'm with you. Well, you want to know
something that really opened my eyes and changed my life, Chuck,
I realized recently that that whole like grocery store recycle
bag recycling thing is a total scam. Like publics and
all them who have those those things out that said
put your plastic bags in your we recycle them. They don't.
They don't. They throw them away. And I can't tell
(31:59):
you how how much time I've spent, like taking labels
off of plastic wrap, shaking out plastic crap to make
it clean, like taking it all bundled together, taking it
to publics and putting it in the bend. And then
the idea they just take it and throw it away
and use this as just like a pr thing. Oh
my god, I'm so sick of stuff like that.
Speaker 3 (32:18):
Man agreed two quick things on that. You can't count
on your large grocery store chain to do that. You
got to go to like the Charm. You got to
go what we have here in Atlanta and Athens, the
Center for Hard to recycle Materials, because they really do
the work. It's just a big pain. And number two,
just as a quick aside, I went to Belize on
(32:40):
winter break recently, had a great time, but the grocery
store in there was a grocery store in Placentia named Publics.
Publics same exact font and coloring as Publics.
Speaker 2 (32:56):
It's like Ricky Rouse and moneld Muck thought it was very,
very funny. It's funny. They're like, we spell it different.
Speaker 3 (33:02):
What all right? So we're getting off track. The one
of the last ways, I guess, second to the last
ways to look at it is through education levels, because
a lot of times when you hear you know, pundits
on the news talking about the middle class, they'll say
things like, you know, people with a four year college degree,
that's only about forty percent of the population in the US,
(33:23):
and it's really misleading. So I wish they'd just kind
of throw this one out with the Public's grocery bags
because you know, you could have a four year degree
and be a college professor that also has to have
a second job to make ends meet. Or you could
also not have a college degree and on a multimillion
dollar you know, sort of blue collar business. So I say,
(33:47):
just get rid of that one.
Speaker 2 (33:48):
A multimillion dollar battery recycling.
Speaker 3 (33:50):
Business, yeah, because that's where all the money is.
Speaker 2 (33:53):
So yeah. So values also, I agree education levels, just
get rid of that, especially with college not really leading
to many as many opportunities today as it used to
and all of the incredible debt associated with it, that
should not be a measurement for the middle class. Values
is another one too, And this one I was kind
of like, what why, Yeah, and I realized you can't
(34:15):
measure social groups strictly on things like income. That self
identification thing has a lot to do with values. One
we talked about is a nuclear family, which has been
altered dramatically since the middle of the last century. When
I would say, I would argue in the United States
at least the nuclear family was like at its peak
(34:38):
of importance. It's definitely declined. People kind of make family
wherever they can find it. And that doesn't mean that
like all of the values are gone that there was
a twenty ten Vice President Joe Biden middle Class task
Force had no idea that existed, but it essentially went
(34:59):
through and said what are your values and they came
up with pretty basic stuff that that I think most
middle class people would agree with. Economic stability and security.
You want a car for each of your kids as
they get to driving age. You want to take a
family vacation once a year. You want to send those
kids to college. You want to own your home, like
really basic stuff. And the idea that all of that
(35:22):
is up for grabs in this country right now is
really alarming.
Speaker 3 (35:27):
Yeah, for sure. Should we take another break? Yes, all right,
we're going to take a break and we'll talk about
what's gone wrong with the middle class and where we
might be headed right after this.
Speaker 2 (35:39):
Definitely large holds of each o.
Speaker 1 (35:47):
Y s k.
Speaker 2 (35:54):
Is okay, Chuck. So, I think we've kind of said
a couple of times that there's a lot of different
ways you can look at things to say the middle
class is doing great. I know the middle classes hauloed
out in debt. One of the things that you can
(36:15):
really kind of point to is like, how much are
you getting paid. Right, that's a pretty easy one. So
you can look at average hourly wages for non supervisory employees.
So that's everybody who's not a manager or like a
C suite executive, right, just the regular rank and file employees.
(36:36):
There was a peak of pay in nineteen seventy three
of thirty dollars. This is twenty twenty five dollars, right.
Speaker 3 (36:42):
Yeah, always or always on this episode.
Speaker 2 (36:46):
Right in fall of twenty twenty five, we were at
thirty one dollars and fifty cents. So we managed to
gain an extra dollar fifty in average hourly wages in
fifty years. Yeah, and you might think like, oh, okay,
well really, let's think about inflation and everything. I did.
(37:10):
Get this if you went back to nineteen seventy three, right,
one dollar today buys fourteen percent of what it bought
in nineteen seventy three. Yeah, so that means that today
it does. So you can you could buy, using the
same hourly wage today fourteen percent of your groceries if
(37:33):
you went from nineteen seventy three to today. So we
are definitely worse off because things have gotten more expensive,
but wages have stagnated. If anyone ever tells you that
wages have not stagnated, they are lying or they're dumb
or both, and just tell them so. Yeah, I've been
trying really hard not to get worked up, man, and
(37:53):
I'm trying to keep it together. Rre we go, everybody,
I'm keeping it together.
Speaker 3 (37:58):
The idea of the middle class, though, around the nineteen sixties,
was about wasn't just about getting to a spot and
hitting it. It was about everybody continuing to grow and the
overall economy of the United States continuing to grow. And
that has happened, but compensation hasn't happened along with it.
From nineteen seventy nine to twenty twenty five, productivity in
(38:21):
the United States rose eighty seven percent, but that hourly
compensation rose by thirty three percent for non supervisory workers.
Speaker 2 (38:31):
Right. And there's two ways you can interpret that. If
you're like, well, unions are gone, you could say if
you're an owner, well you get rid of the union's
productivity increases. Unions make lazy workers. Another way to put
it is that without the unions, you can exploit workers
more easily and get them to work harder because they're
afraid of losing their job. Right, Yeah, regardless of how
(38:52):
you look at it, like, there's no way to interpret
it differently. If your wages have increased thirty three but
productivities increased eighty seven percent, that means that that extra
wealth that was generated had to go somewhere, and it
didn't go to the workers. It went to the wealthiest people.
And there are just like, if you want to just
(39:15):
look at eye popping numbers, just look up income inequality
in the twenty first century, because it has gotten completely
out of control compared to how it used to be.
And I mean how it used to be. Like I'm
talking the eighties.
Speaker 3 (39:29):
As Sam Jackson would say, hang on your butts. What
do you say, Jurassic Park?
Speaker 2 (39:34):
Hang on your butts?
Speaker 3 (39:35):
Yep, hang on your butt.
Speaker 2 (39:36):
You need a cigarette sticking out of your mouth?
Speaker 3 (39:38):
Oh, I've got it, pal, all right, So these numbers
are going to be slightly depressing and slightly eye popping.
Annual wages of the bottom ninety percent of Americans rose
by twenty nine percent from seventy nine to twenty twenty one.
For the top one percent during over that same time period,
they rose two hundred and six and the Forbes four
(40:04):
hundred lists it's a list that we put out in
or Forbes magazine puts out about the four hundred wealthiest Americans.
They should probably just stop doing this altogether.
Speaker 2 (40:14):
I know it ruins society.
Speaker 3 (40:17):
But you mentioned the nineteen eighties, nineteen eighty two that
it was the initial Forbes four hundred. It had thirteen
billionaires on it. Now everybody on the Forbes list is
a billionaire, and there's another five hundred billionaires that don't
get on the list.
Speaker 2 (40:34):
Wow.
Speaker 3 (40:35):
So in nineteen eighty two there were thirteen billionaires. There
are more than nine hundred billionaires in the United States
right now who have a collective worth of six point
six trillion dollars. I'm sorry, that's just the Forbes four
hundred have six point six trillion. Forget the other five
hundred billionaires.
Speaker 2 (40:51):
Okay. So another thing that that Forbes list pointed out
is that the total wealth in all of the United
States is one hundred and forty trillion dollars. The bottom
fifty percent owns four trillion of that. That means the
top fifty percent owns one hundred and thirty six trillion
compared to four trillion. Ah Man, there was one other
(41:12):
statistic I found too, between nineteen seventy five and twenty
twenty four, there was a wealth transfer upward to the
top percent that totaled fifty trillion dollars. So, however you
want to put it, however you want to look at it,
the middle class and the lower class have been held
(41:32):
back while the wealth that they have been producing has
moved upward. And a big problem with that is when
you have wealth concentrated in the hands of a few,
they're making the decisions about what happens with that money,
rather than hundreds of millions of people all making individual
decisions and collectively making decisions that are like market signals
(41:53):
that tell people, I'm going to go make this, I'm
going to stop making this, I'm going to make this
price that all these people are upset because they don't
have good healthcare, we better do something about that. None
of that matters because they don't have money, so they
don't have power, and they're afraid of losing their jobs.
So you can do basically whatever you want to them.
That's what happened.
Speaker 3 (42:11):
Yeah, And you know, politically speaking, the wealth and the
powers is who controls everything. They obviously via campaign donations
is the most clear cut way, but all kinds of
interventions to basically let the top one or two percent
make the decisions for the majority. There's a social scientist
and this isn't us railing on stuff. This is just
(42:33):
how it is. Like, if you're saying this isn't the case,
then you're lying. Like you said, there's a social scientist
named Richard Reeves who said that the top twenty percent
of earners are basically have been completely successful in pushing
zoning regulations and tax policies that benefit them all at
the expense of the middle class. They gain the systems
(42:55):
to pass that you know, wealth down to their children
or to get their kids into the better It's just
the way things have gone in the United States.
Speaker 2 (43:04):
Yeah, and the problem, one of the big problems is
people are going to be all over our iTunes reviews
being like, these guys are liberal idiots. You don't know
what they're talking about. It's not liberal and conservative, and
it's not Republican and democrat. This is strictly a class issue,
and the idea that you are defending a class beyond
yours that is exploiting your own class, including you. That's
(43:27):
a problem because it's presented as a political thing, and
we're so tribal when it comes to political affiliations that
you will defend against your own self interest.
Speaker 3 (43:38):
Yeah, because it's.
Speaker 2 (43:40):
Being presented to you as a political issue, and it's.
Speaker 3 (43:42):
Not happens every voting season. That happens.
Speaker 2 (43:46):
Yeah, And it's true. And I'm not picking just on
conservatives or Republicans like Democrats do it too, like tr
tribal and toxic and unhealthy. And if, oh man, if
we could ever come to get there and break down
those lines, oh my gosh, people are so ripped up
right now that it would just be magnificent, the sweeping
(44:08):
changes that would happen. A new renaissance, Yes, renaissance too,
the sequel to h Yeah.
Speaker 3 (44:17):
Here's the thing. You know, Goods have gotten cheaper though,
if you want to look at again, comparing in today's dollars,
groceries are generally cheaper than they were in the mid
seventies because the mid seventies, as we said, was pretty bad.
Things like you know, clothing and furniture, electronics, all that
stuff is way cheaper than it used to be. If
you look at you know, back when you bought a VCR,
(44:38):
when those first came out, and they were like a
thousand dollars, you know, stuff like that is all like
the bottom has fallen out on those kind of prices.
But that hasn't happened in the housing market, which is
a big deal for the middle class. Like you said
in Act one, that median sales price of a house
and again in today's dollars, it was three hundred thousand
dollars in nineteen seventy nine. It's more than four four
(45:00):
hundred thousand dollars today. And I think we said it
was sixty nine point two percent at its peak of
home ownership in two thousand and four. As of I
think twenty twenty two. You know, what's happened is that
you know, I think you said if it was about
sixty five percent, so it's not that big of a difference,
(45:20):
but it's that age of buying your first house has
just gotten older and older and older. In twenty twenty two,
only sixty two percent of forty year olds own their home,
whereas the Boomer generation sixty nine percent of forty year
olds owned. And the same can be said for rent
(45:40):
and childcare, in college and healthcare. It's just all these
things are outpacing earnings.
Speaker 2 (45:47):
Plus also that sixty two and sixty nine percent is
a little misleading because there are way more boomers than
there are Gen x who are forty now, So that
so sixty nine percent of boomers is a new manically
a much bigger group than sixty two percent of gen.
Speaker 3 (46:04):
Xers, right, which also means that that's a greater number
of houses that are now locked up right being passed
on to their kids. And you know, not saying that
you shouldn't own a house and pass along your kids,
but that as far as the housing market goes, that's
just a lot, right.
Speaker 2 (46:21):
So Chuck, what do you what are we going to
do about this? What are some things we can do?
Speaker 3 (46:28):
Oh? Man, let's solve it right now on the spot. Well,
I mean, I don't know, man, It's not like this
all over the world. If you look in Europe that
there is a middle class there, but it's not quite
the same. They aren't maybe don't have the kind of
wealth that upper middle class does here, but they have
the income and quality isn't as great generally, they have
(46:49):
stronger social welfare programs, like the danger of falling into
a desperate life straits isn't as great over there. I
saw I think on Instagram recently. It was an interview
with a guy that was a had a good job.
Speaker 1 (47:05):
You know.
Speaker 3 (47:05):
It was one of those stories where the guy was
on the streets and he had a degree in chemistry
and he had a good job, and you know, I
read the comments because I was curious if people were
going to be like bashing this dude or what. And hearteningly,
a lot of the people were like, Hey, I worked
in shelters for the un House for years and we
saw all kinds of people come through here. We saw
(47:28):
doctors and attorneys and people you know that just you know,
sometimes you're a bad circumstance or two away from that
kind of situation, and it's just not like that in
Europe generally speaking.
Speaker 2 (47:43):
I remember during the two thousand and eight recession of
reading some statistic that something like at the time like
forty percent or something like that of Americans were one
paycheck away from being homeless. Like that's how little savings
and cushion that most Americans had.
Speaker 3 (47:59):
Yeah, or having to make you know, healthcare decisions like
that aren't good for your life because you can't afford it,
because it will bankrupt your family. You're having to put
yourself and your family in peril physically.
Speaker 2 (48:15):
Right, That's part of that why the European middle class
is much more secure because most of them have universal
health care.
Speaker 3 (48:23):
Yeah, they're not bankrupted by a diagnosis.
Speaker 2 (48:26):
Right, But even on more day to day pedestrian stuff.
So the lower income you are, the more inflation affects you.
Where Like if your higher income and you go gas
up your car and you're like, wow, gas went up
twenty cents today, that sucks, and you just don't think
about it from that point on. If your lower income,
(48:47):
you might roll up to the gas station and be like, oh,
I can't afford to drive my car to work today
because gas went up twenty cents a gallon. So that's
another issue with the whole thing too. It makes it
tougher to get a head when you can't afford the
basic necessities because they're growing out of your reach day
(49:07):
by day.
Speaker 3 (49:09):
Yeah. I mean when I was a snot nosed, no
at all college kid working at Golden Pantry in Athens, Georgia,
I used to and you know, I was working at
Golden Pantry, so it's not like I was making any
kind of money, but for a college kid, it was like, hey,
that's great. I had everything I needed making that seven
dollars an hour or whatever, because my parents were generally
(49:29):
paying for my education and it's like easy street. I
would I would wonder why someone would come in and
buy like seven dollars worth of gas. I aloud be like,
what a weird number? Why are you putting seven dollars
worth of gas? Because it didn't occur to me that's
all that they could afford. It's like, why don't you
just fill your car up? And it's like because it
(49:50):
couldn't afford to dummy? Right, I was a dummy, that's right.
Speaker 2 (49:54):
Yeah, No, I know exactly what to mean. I've been
on both sides of that.
Speaker 3 (49:58):
Yeah, I mean, you know the night abitab a college kid,
So in a way.
Speaker 2 (50:03):
Was that the golden pantry at Alps?
Speaker 3 (50:06):
Uh No, I worked on the college station road.
Speaker 2 (50:09):
Okay side, gotcha. So we didn't figure out how to Yeah,
I had the same kind of job, and it is
a very weird job. So we didn't figure out how
to fix anything. Chuck, you got any ideas, I think
that you could learn a lot from Europe expanding social
safety nets. We could stop making that a political thing
(50:32):
and be like, no, actually, this can help everybody. I
saw that in New Mexico has started free childcare for all,
doesn't matter what your income level is, doesn't matter, Like
you can put your kid into childcare for free, and
that's a huge expense that save for the average person.
Speaker 3 (50:48):
Yeah.
Speaker 2 (50:48):
I think New York is trying to do that, like
Mom Donnie is trying to to institute that in New
York City too, So that could be a huge trend.
Just free childcare, Universe childcare could make a huge difference
in people's income.
Speaker 3 (51:04):
Yeah, and all of that is because people want to
go out and work their job to make money for
the man.
Speaker 2 (51:11):
Yep, yeah, well put man, you got anything else?
Speaker 3 (51:15):
Got nothing else?
Speaker 2 (51:16):
Okay, I don't either, which means it's time for listener man.
Speaker 3 (51:23):
It is a quick correction. We heard from people from
Tennessee because we stole their college. Hey guys, longtime listener here.
Your show has fueled many runs and chores over the years.
Quick Nashville nitpick from a proud local. In the Flexner
Report episode, you mentioned Maharry being right here in Georgia.
Nashville would like to gently reclaim that, guys, Mahary medical
(51:45):
College has been proudly in Nashville since eighteen seventy six,
and we're pretty attached to it. Totally understand how geography
gets slippery mid podcasts, but just wanted to defend a
hometown institution and that is from Bridget Chevron or Shavaine.
And we heard from a lot of people, Bridget, So
I don't know how we screwed that up, but we did.
Speaker 2 (52:04):
Yeah, we got it screwed up royally. I even went
back and was like, surely there's a Mahary College in
Georgia too. Nope, Nope, it's just the one in Tennessee.
So sorry everyone in Tennessee who took offense to that,
because we did hear from a lot of you.
Speaker 3 (52:16):
For sure, that's right, But we're neighbors and we like
to think that we're all the same.
Speaker 2 (52:20):
Yeah, for sure, we all shared your medical college. Yeah,
in the Tri state area. If you want to be
like Bridget and send us a really nice email correcting us,
we love that kind of thing. You can send it
off to Stuff Podcast at iHeartRadio dot com.
Speaker 3 (52:38):
Stuff you Should Know is a production of iHeartRadio. For
more podcasts my heart Radio, visit the iHeartRadio app, Apple podcasts,
or wherever you listen to your favorite shows.
Welcome to Stuff You should Know, a production of iHeartRadio.
Speaker 2 (00:11):
Hey, and welcome to the podcast. I'm Josh and there's
Chuck and Jerry's here to us sitting in for a
good old fashioned stuff you should know episode.
Speaker 3 (00:21):
That's right, not one of those new fangled ones.
Speaker 2 (00:24):
No, no, not one of the new ones that are
just like you know, all hair gel and yeah, you know, style,
no substance.
Speaker 3 (00:31):
It still has that new podcast episode smell.
Speaker 2 (00:34):
Yes for sure. Speaking of new Smell, how do you
feel being fifty five? Birthday boy?
Speaker 3 (00:41):
New smell? You know, it's great. I think I have
actual privileges now that come with it.
Speaker 2 (00:48):
That age, like cheap coffee at McDonald's that kind of stuff.
Speaker 3 (00:52):
Yeah, I don't know about McDonald's, but like I think
I think I can play golf for a little cheaper now,
like literally as this your rate, which is that's hysterical.
Speaker 2 (01:03):
Yeah, well I think you can get an AARP membership
now too.
Speaker 3 (01:07):
Oh yeah, I mean you're probably already getting that stuff
in the mail, right. They start early.
Speaker 2 (01:12):
H No, I'm not even fifty yet. They won't let me.
I keep applying and they keep denying.
Speaker 3 (01:17):
Okay, maybe fifty. I mean they start sending in that
stuff years ahead.
Speaker 2 (01:20):
Yeah, we used to have when you had to get
it for work or something like that. But they found out,
you know, what our age is, and they got really mad.
Speaker 3 (01:27):
They said, we've been spending sending things to spring chickens.
Speaker 2 (01:32):
But yeah, well, let me know how the golf thing goes,
and if you get cheap coffee at McDonald's, and what
being a senior is like, Chuck, because you know, I
think for me and Jerry and everybody, we just want
to wish you a happy birthday.
Speaker 3 (01:44):
I appreciate that.
Speaker 2 (01:45):
People went bonkers on Instagram.
Speaker 3 (01:48):
Oh yeah, was that you?
Speaker 2 (01:50):
Yeah, of course.
Speaker 3 (01:51):
I figured, you know what my uncle, My uncle wished
you a happy birthday?
Speaker 2 (01:57):
Did he on that post? I didn't see that.
Speaker 3 (01:59):
Yeah, it's pretty funny. Then THO was a confusing series
of texts where he was finally like, is it your birthday?
It was like those a few days ago.
Speaker 2 (02:07):
Sure, he said, who is this? Yeah exactly, he said, McGovern,
not mcguffin, no McGovern. Okay, all right, let's start talking,
because we're talking about the middle class in America at least,
although this definitely extends to other countries like the UK,
(02:28):
some of the Nordic countries, Australia, there's not an obsession
but a real like obsession with the middle class, how
it's doing, how mobile it is, upwardly, downwardly, and there's
it's essentially the middle class is like the thumbnail metric
for the health, the real, true health of a society
(02:50):
and economy.
Speaker 3 (02:53):
Would you agree, Yeah, I mean I think so. And
I think that used to be a real like it's
always been a talking point in the United States, but
I think it used to be a real, genuine talking point,
whereas now I think it's like, you know, are all
the rich people doing great? Okay, all right, now let's
talk publicly a little bit about the middle class, I
(03:13):
guess right.
Speaker 2 (03:14):
But not everybody's fallen for that. There's like this whole
idea that the middle class and the health of the
middle class was a canary in the coal mine. Yeah,
and not only is the canary dead, it caught fire
at some point as far as a lot of people
are concerned about the United States middle class at least
because there's this idea that it's dead. But then if
(03:34):
you read up a little further on it, you come
across other people who are like, no, no, dude, look
at these statistics, like the middle class is actually doing great,
way better than they used to be doing, and other
people are like that just doesn't quite add up. So
when you get into it, it's really tough to define
the middle class. And you can monkey around with who's
(03:55):
middle class or who's not and come up with all
sorts of different profiles. But I think it just matters
what people who would probably self identify as the middle
class feel about the economy and about their prospects in life.
Speaker 3 (04:08):
Yeah, for sure. Like what is that the vibe session? Yeah?
Speaker 2 (04:13):
What was her name, Kyla Scanlon. She's a kind of
a gen Z financial explanatory journalist. Yeah.
Speaker 3 (04:21):
Yeah, so that's the idea of like sort of like
not falling for being gas lit by everything you're being
told about how great it's going. And there's something called
a vibe session. Am I saying that?
Speaker 2 (04:33):
Right?
Speaker 3 (04:34):
Yeah?
Speaker 2 (04:34):
Vibe session?
Speaker 3 (04:35):
It just sounds weird because a vibe session sounds like,
you know, something I do late on Friday nights.
Speaker 2 (04:40):
Right, This is with a C instead of an S.
Speaker 3 (04:42):
Yeah exactly, and it's much less ire. Yeah, oh man,
But yeah, the idea of you know, various politicians, you know,
whenever anyone's running for something talking about typically reelection, talking
about how great everything really is, whereas everyone is like, yeah,
but why doesn't it feel that way. That's a vibe
(05:04):
session instead of like a true recession.
Speaker 2 (05:06):
Yeah, and she was pointing out like that actually can
become self fulfilling. Yeah, sure, because if enough people start
feeling like, no, things aren't going so good, they start
not spending money, and that actually can trigger a recession
just from the fact that people feel that way, no
matter what the metrics say. So, yeah, we'll talk about
all that, but let's talk about the history of the
(05:27):
middle class because it hasn't always been around.
Speaker 3 (05:29):
Yeah, it's interesting if you look at, you know, the
history of the middle class in the West. It generally
you can point to late medieval Europe as you know,
when things started to get cooking a little bit as
far as the middle class goes, and you know, we'll
walk you all the way through you know, modern times.
But as cities became a thing, you know, all of
(05:50):
a sudden, you needed a middle class to sort of
administer what the aristocracy was asking for in a lot
of cases. Is so you know, there was this distinct
group kind of created that wasn't aristocracy, and it wasn't
the peasant class. And I think one word, and I
believe they've eve been done a short stuff on the bourgeois, Yeah,
(06:14):
didn't we?
Speaker 2 (06:15):
Yeah, and what it means to be bourgeoisie. That's right,
there's another word for him burgers too, and apparently both words.
I don't I don't remember this, but I'm sure we
talked about it in the bourgeois short stuff. That that's
the name of the cities, the fortified cities where they worked,
right or where they emerged from. Yeah, and the burger
(06:37):
is that's why the burger Meister is called that in
either Rudolph or Frosty or some rankin bass something like
the scary BG exactly. Yeah, Burgermeister means mayor so he's
like the head of the city essentially. Anyway, those were
the merchants, the bankers, professionals that emerged to kind of
(06:59):
fill that space between the peasants and the aristocracy. And
you could call them the first middle.
Speaker 3 (07:05):
Class, yeah, sort of. But they grew in size and
wealth and power, so they were kind of like, Hey,
we tricked everybody. We're not really the middle class. We're
I mean maybe upper middle class. Certainly obviously not aristocracy
because they weren't born into that. But as people got wealthier,
there was kind of a true middle class that came
(07:25):
after that, where you needed people to do things like
bookkeeping and you know, kind of handled the business of
the people that previously had said that they were the
middle class, even though no one was using those terms,
you know, we should point.
Speaker 2 (07:39):
Out, right, no, nothing like that. There was also a
lot of changes where before it was wealth and power,
right because that's what nobility kind of based itself on.
So the earliest middle class kind of based itself on
those same markers. But thanks to the Renaissance and the Enlightenment,
other markers kind of came along. The whole idea of thrift,
(08:02):
of saving your money, of not being just frivolous with
your money, that became a really big middle class social marker,
certain tastes, certain ways you would dress. And then of
course wealth, wealth has always been a marker for the
middle class, especially the upper middle class. But these were
(08:25):
all like, all these things seemed so normal to us
and so ingrained that it seems alien almost to kind
of tease this stuff out and identify it historically.
Speaker 3 (08:36):
Yeah, for sure. And this was you know, in Europe
at the time when the United States was born. Olivia,
by the way, did a great job with this article.
I thought, uh, greed, she is a heck of a writer.
So the United States was, you know, as she points out,
kind of a sort of a bourgeois not a I
(08:58):
wanted to say, project or a test an experiment, maybe
the American experiment. Yeah, because there were people like Thomas
Jefferson who were very much believed like, hey, we're going
to build this new country on and not on the
backs of but like the middle class, these people that
owned farms and could provide for their family and that
(09:18):
own some land, like this is the American experiment, that
like the goal that we're striving toward.
Speaker 2 (09:26):
Yeah, and those yamen farmers were typically not slave holding.
So his idea was to basically become a nation of
self sufficient farmers growing food for their families and themselves
and then selling some in the market. And that just
is not how it went, because the wealthy landowners who
had actually had slaves became essentially the power, the elite,
(09:51):
the people actually pulling the levers, and eventually they except
in the Antebellum South. They kind of replaced that wealthy
land owning and agriculture with industry as the Industrial Revolution
started in Europe and then spread to the US, and
then we had a real disparity in power and wealth growing.
Speaker 3 (10:14):
Yeah, for sure, because if you're owning a factory or
owning a railroad or a share of a railroad, that
is a very distinct upper class. It may not be aristocracy,
but aristocracy became less and less important as time went on.
Flashed forward to like the middle of the nineteenth century,
and you had people like Karl Marx, and we should
(10:36):
say Carl Marx was trying to sell something which was Marxism,
but he would come along and say like, hey, they're
really two classes. There's the working class and then everybody
else that's exploiting the working class.
Speaker 2 (10:53):
Yeah, and the exploiters or the oppressors and the oppressed.
I think he also put it, they owned the capital.
They were the capitalists. They were the ones who could
open a factory and employ you and you depended on
them for money, but they were exploiting your labor. Yes,
And in this sense where there's an owning class and
(11:14):
a working class, there's really no room for a middle class. Eventually, though,
a middle class still emerged because those capitalists aren't going to,
like you said, do their own books. They're not going
to go teach the next generation of workers to come
work in their factory. So like there was a need
for people to train the working classes to better serve
(11:35):
the capitalist elite. And that's where the middle class really
started to emerge in the United States in particular, but
also in the UK, Australia, some of the other places
in the West. That's where that the middle classes we
understand it now, really developed.
Speaker 3 (11:52):
Yeah, for sure, and it was there during the time
of Marx, but that wasn't good for Marxism to point
that out. So yeah, it was very much easier for
him to say, like you're being exploited or you're the exploiter.
It was a little black and white, yeah, for sure.
So in the nineteenth century, the middle class values system
started to kind of take shape, which is, you know,
(12:15):
sort of this the value system that ideally is still
around today, which is the idea that you know, if
you work hard, you save up, you can be a success.
In the United States, you know, they agreed that people
should vote more and more like have access to voting.
And of course that started with like, hey, maybe men
(12:37):
that aren't land owners should be able to vote, and
then that kind of spread throughout the years to you know,
people of different races, and then women finally. But the
idea that expanding voting rights and expanding education was always
sort of a middle class value, and then early on
it was you know, the role of women in society
has definitely changed as far as the middle class value goes,
(12:59):
but early on it was, hey, women are very important
to keep the home, but really be the moral center
of the world. Of the home, you.
Speaker 2 (13:10):
Know, yeah, of the family, which was of utmost importance,
the nuclear family, which became really important in the Victorian
era and really informed the middle class values too, right,
and all of those seem like so we take them
for granted so much as values typically aside from you know,
forcing women to work in the home whether they like
(13:30):
it or not, that just goes to show you how
effective the middle class was at spreading its basically imposing
its values on everybody else in the West.
Speaker 3 (13:40):
Yeah, for sure. Should we take an early break here, Well,
it's not too early, actually, I think, so, Yeah, all right,
we'll take a break. I think that's a good setup.
Middle classes forming. Everyone's getting excited, and we'll fast forward
to the twentieth century right after.
Speaker 2 (13:54):
This definitely about our childhood et r.
Speaker 1 (14:03):
Y Skur, all.
Speaker 3 (14:20):
Right, I promised talk to the twentieth century in the
middle class, and that's where we are, uh specifically, you know,
this is when the middle class in the US really
really emerged as like a massive thing, like the largest
portion of a like set of people in the US
became middle class in the in the twentieth century, and
really after the war. It was powered by the New Deal.
(14:43):
Of course, after World War Two, the United States was
in a unique position as as victor, but also victor
who didn't have the war fought on their you know,
mainland soil, right, so we didn't have to do all
this rebuilding after the war. So we were in a
position to really he hit the throttle on economic stimulus,
(15:04):
which was brought about via the New Deal.
Speaker 2 (15:07):
Yeah, and World War two. Just the sheer amount of
money thrown into the economy from the government for World
War two helped as well, right, And we had all
those technologies that we developed that gave us things like
pop tarts and stuff immediately after the war and completely
improved the quality of life for people in the United States,
especially the middle class. Right, so you have government policy
(15:29):
like the New Deal, like the National Labor Relations Act
that are favoring workers, this working class that is becoming
the middle class. And then one of the other, really
really really big aspects of what built the middle class
and the United States and elsewhere were unions. Union membership,
(15:50):
because if you can bargain collectively, you can't be exploited
nearly as easily, and that means that life is a
lot more fair for you, the worker, because you're allowed
to get together and say no, you can't do that
to any of us. If you do that to one
of us, you do it to all of us, and
we'll all leave.
Speaker 3 (16:07):
Yes, I mean we did. We did a great episode
on unions years ago, So I advise you to go
listen to that now if you want to learn more
about those But no, no, no, everyone else. I mean
you can if you want. Okay, a little refresher, But
union membership really bloomed in the nineteen thirties and forties.
I think at the beginning of the twentieth century, it
(16:28):
was in the low teens union membership and then it
really really rose from there, and so did wages. Between
nineteen forty and nineteen sixty, if you were a non farmer,
your median weekly income rose. And these by the way,
everything we're doing is in twenty twenty five dollars, just
to make it easier to understand, but your median weekly
(16:50):
income for a non farmer went from five hundred and
fifty dollars to over one thousand dollars, almost eleven hundred bucks.
And that was across all you know, a lot of
edgecation levels, you know, different racial groups, different industries. That
was sort of a broad change. So, you know, it
was an interesting time in that, you know, pay for
(17:11):
people and what is now like a solid middle class,
it was really rising. They were taxing the rich and
constraining corporate power such that some people called this this
time the Great Compression, where the wealth levels were sort
of smashed together on a graph instead of expanded vastly
like we are now. We're gonna have some shocking numbers
for you later in this episode.
Speaker 2 (17:33):
Yeah, So that era between nineteen forty and I think
a lot of people essentially put it at the mid
seventies is when they say the party really started to end.
Was just as economic boom golden age for the United
States and the middle class. And there was another big
factor too, which was home ownership. We did I remember
(17:56):
in our racial discrimination or housing discrimination episode that we did,
we pointed out that owning a home has long been
really important, especially for the middle class, because that is
how you generate wealth. For most people, your home just
appreciates some value over the years, and then you can
also use that home to transfer that wealth to your kids.
(18:18):
So it's also a form of generational wealth transfer for
the middle class. So it's really big deal to own
your own home. And that was another big thing that
happened after World War Two. Home ownership went up quite
a bit.
Speaker 3 (18:30):
Yeah previous and this is going way back, but between
eighteen ninety and nineteen thirty, home ownership was under fifty
percent of the United States. And eventually, you know, thanks
to the suspect mortgages that they were handing out like
candy in two thousand and four, that peaked at I
think it was close to seventy percent, like sixty nine
(18:50):
or something.
Speaker 2 (18:51):
Yeah, for sure, and then I think it dropped down
to something like sixty five and is basically plateaued since there.
But this is the point that that you could own
a house, you could own a car. Yeah, you could
have a family of you know, a husband and wife
and two kids and live in the suburbs, and the
(19:12):
kids would go to a nice school. And this was obviously,
this is the most idealized version what we're talking about.
There's a lot of disparity. There was a lot of
people who are still very poor in the United States too,
But overall, if we're just focusing on the middle class,
you could do all of these things and have a nice,
comfortable middle class life, a pension after you retired, on
(19:33):
one salary, one income, because again, one of the main
values of the middle class at this time was that
the mother stayed home, raised the kids, and made the
house the center of the nuclear family, respite from the
rest of the world. One salary could do all of that.
Speaker 3 (19:52):
Yeah, and it was you know, people weren't as far
apart as they were financially speaking, like you may live
in the same neighborhood or maybe the neighborhood next to
your boss. You know, blue collar workers and white collar
workers were were way more you know, just kind of
squashed together, like your children probably went to school. If
(20:12):
you were like a line worker at an auto plant,
you know, you may not have as nice of a
car or as big of a house as your manager
or your boss, but you know, it was in the
It was in the same world. And you know, I
still remember that stuff growing up in the eighties, like
the watch any John Hughes movie, and like all the
(20:32):
kids at the same school. They were like, you know,
the rich kids and then the kids that lived in
that neighborhood, right, but it wasn't extreme wealth and poverty.
Speaker 2 (20:42):
No. And the fact is they were all going to
the same school exactly. There was like a leveling from that.
So yeah, that was a really big deal. And this
is this is going on through about to the mid
seventies when things started to decline for the middle class. Right. Yeah,
there's there was the end of the post war boom.
(21:03):
I mean, that's really tough to keep up in the
form that it was in for very long. Yeah, and
it's kind of astounding it stayed up that long. Part
of it was that the US was in that unique position,
like you said, it didn't have to rebuild after World
War Two like Europe and Japan did well. After a
few decades, Europe and Japan were able to rebuild and
(21:23):
they started to catch up to the United States, which
meant that they were taking more share of the United
States pie with say like exports and manufacturing and stuff.
That was one factor too. There was also the oil crisis. Yeah,
I think that that made a bigger dent than I
ever realized that that was like a history changing event,
(21:44):
the OPEC oil crisis, and then also political conflicts that
ultimately laid the bedwork for today's culture wars, civil rights movement, feminism, environmentalism,
LGBTQ plus US rights. All of these things were marginalized groups.
Previously marginalized groups came forward and said, no, there's no
(22:06):
reason we should be treated like second class citizens. That
created a tension in the United States. A lot of
corporations came in and figured out how to exploit this
for their own ends, and that eventually started to divide
people to where there was this sense of competition is
the bedrock of American capitalism, and American capitalism is the
(22:30):
bedrock of the middle class. It's part of the middle class.
It's a new middle class value. It's where we got
yuppies in the eighties.
Speaker 3 (22:37):
Yeah, for sure. The industrialization also happened. In nineteen seventy
if one in out of every four non farming jobs
in the US was in manufacturing, and by twenty seventeen
it was one and eleven. So other countries, you know,
as globalization and trade increased, other countries started making stuff
super cheap. Like this isn't a big surprise to anyone
(23:00):
to this. Imports from China started coming in, Imports from
other you know, Southeast Asian countries started coming in. Stuff
was a lot cheaper to buy, and you know, they
started automating a lot of stuff. It was, you know,
kind of the first automation boom was happening in the
nineteen seventies where factories didn't need as many people on
(23:20):
the line to do stuff that these new machines were doing.
So that coupled with deunionization, really, you know kind of
dropping off, was a huge factor.
Speaker 2 (23:32):
Yeah, and it really definitely declined that it's below ten
percent for the entire workforce in the United States. A
huge chunk of that is just from government jobs like teaching,
they tend to have a very strong union. But overall,
it went from like thirty five thirty six percent to
ten percent. And one of the reasons that that happened
(23:53):
is because the government basically withdrew its support for unions.
Not only did it stop passing legis enforcing legislation that
supported unions, it actually started issuing legislation that harmed and
crippled unions and essentially removed their power.
Speaker 3 (24:09):
Yeah, for sure. And then the last reason, you know,
we can't talk about the middle class and wealth disparity
without talking about Ronald Reagan. You know, he's the one
that kicked it off. And subsequent administrations definitely didn't do
the middle class any favors. But those Reagan era policies
that trickle down economics, cutting taxes for corporations, undermining labor unions,
(24:33):
cutting taxes on the top earners individually really transformed the
look of our nation heavily, heavily in favor of the
rich and you know, the top ten percent, especially the
top one percent. And like I said, other you know,
Democrats and Republicans since then have failed the United States
and their policies. I know, after the economic crash and
(24:57):
the real estate crash in two thousand and eight, there
were a lot of people, especially now in hindsight that
look back and say, you know what, we really had
an opportunity there, and the Obama administration failed us. When
we bailed out those banks with not very many strings attached.
We had some leverage there to sort of get some
changes in place that could have helped, you know, shift
the look of the financial outlook of our country, and
(25:19):
we didn't do it.
Speaker 2 (25:20):
No, And what they would have been doing is undoing
damage that was done during the Clinton administration where they
repealed the Glass Stegal Act that kept banks from dabbling investments.
You were either a bank or an investment company, which
one and after that you don't have to choose, And
that's ultimately what helped lead us to that massive financial crisis,
(25:43):
the Great Recession.
Speaker 3 (25:45):
Yeah.
Speaker 2 (25:45):
So yeah, it's really easy and fun to pick on
Ronald Reagan and Margaret Thatcher for kicking all this off,
but they were not the only neoliberal presidents to come
along after the eighties.
Speaker 3 (25:56):
No, for sure, if you're talking about the middle class today,
you really have to start with like how do you
define the middle class? And Libya did a really great
job in this section. I think like there are a
lot of different ways that people and pundits like to
talk about what the middle class even is. Some social
scientists it's just a super straightforward income based definitions, which
(26:19):
is good in one sense because you can adjust that
depending on where you are in the world, Like a
middle class income in New York City isn't going to
be the same thing as in a rural area, so
they can you can adjust things economically based on just
a strict income based definition, which is kind of cool.
Speaker 2 (26:40):
Also, that means that the middle class doesn't move out
of reach of certain people too. Like if you just
have the median income and say that's the middle class,
As the median income grows, the middle class goes up
and some people stay behind. This is like here's the
middle class section, and you can get into it and
out of it, or drop out of it and go
above it. But it's going to stay in the same place,
(27:02):
and it's just going to it's going to change depending
on how wages rise. Yeah, it seems like a pretty
good it's a good idea to me. The most widely
used one comes from the Pew Research Center, and they
it's an income based approach that they use, but they
basically say that if your household income is two thirds
(27:24):
of the median household income or up to double the
median household income. You are middle class, right, and I
think in twenty twenty four that meant that your household
is very important too. That your household made between fifty
five thousand, eight hundred and twenty dollars to one hundred
and sixty seven thousand, four hundred and sixty dollars any
(27:46):
anywhere in there, you were middle class income wise.
Speaker 3 (27:50):
Yeah, and this is all obviously like pretext money.
Speaker 2 (27:53):
Right, yeah, oh yeah, I would think so. Yeah.
Speaker 3 (27:59):
So under that definition, the middle class made up sixty
one percent of households in nineteen seventy one, compared to
just fifty one percent in twenty twenty three. But at
the same time, the upper income category went from eleven
percent to nineteen percent and the lower percentage rose from
(28:19):
twenty seven percent to thirty percent. So what you're seeing
is like the wealth gap like happening in real time, basically.
Speaker 2 (28:27):
Yes, But that also suggests that eight percent of people
in the middle class moved up from the core middle
class to the upper income category. So that's what that's
an interpretation that a lot of people who are like, no,
the middle class is fine, suggest.
Speaker 3 (28:44):
Right, then three percent moved down.
Speaker 2 (28:46):
Right, Yeah, so that's yeah. Income is like, if you're
an economist, this is what you're looking at. If you're
say anthropologists or sociologists, you might say, well, who considers
themselves middle class? Maybe we should look at those people
and then kind of study them like that, like ask
people are you middle class or not? Are you working class?
(29:08):
You consider yourself upper class? And they usually either divide
it into those three lower class, middle class, upper class,
or else they divide it into quintiles lower class, working class,
which they would also call lower middle class, core, middle class,
upper middle class, and then gob smackingly rich.
Speaker 3 (29:28):
And one percent saying buzz office, none of your business.
Quit ask any questions.
Speaker 2 (29:33):
They have them arrested.
Speaker 3 (29:35):
So twenty twenty four was the last Gallop poll that
we have where someone said, like, hey, what do you
consider yourself? And in the United States, thirty nine percent
of citizens considered themselves middle class. Another fifteen percent said
there were upper middle class, which brings that grand total
to fifty four. Thirty one percent identified as working class,
(29:56):
twelve percent is lower class, just two percent of upper class,
which means a lot of those upper middle class people
were lying liars and that they're really part of the
upper class.
Speaker 2 (30:09):
Yeah, for sure, But I think also it's not I'm
sure some people were like I don't want to say,
like I feel upper class.
Speaker 3 (30:16):
And self identification, so it makes sense.
Speaker 2 (30:18):
Sure, But at the same time, also I think that
has to do with the idea that maybe based on income,
it's almost like that vibe session thing like, yeah, your
income would put you in the middle class, but you
don't feel wealthy. You feel like you could be ruined
by a healthcare crisis at any time. So I think,
especially with self identification, that gives you a sense of
(30:40):
the actual health of the economy as far as like
consumer confidence is concerned.
Speaker 3 (30:45):
Yeah, and there's you know, laziness factors in. You could
be in the upper middle class but also still have
a car tire sitting in your sideyard for sure, with
like typical markers of you know, different glasses.
Speaker 2 (31:00):
For sure, tires in your side Jock, I gotta get
mine moved.
Speaker 3 (31:05):
Emily got onto me for years about the car battery
that I had that I just it's like, got to
get rid of a car battery. I know you can, Oh,
you take it to like one of the auto stores,
I know, but none of those feel right.
Speaker 2 (31:21):
They know they take the core out and yeah it's
they recycle them for real.
Speaker 3 (31:25):
Yeah, because you've watched them do all that right from
beginning to help.
Speaker 2 (31:29):
I help on weekends as just as pro bono.
Speaker 3 (31:33):
That's my point is, I don't I don't trust any
of it. None of it feels right.
Speaker 2 (31:37):
All right, I'm with you. Well, you want to know
something that really opened my eyes and changed my life, Chuck,
I realized recently that that whole like grocery store recycle
bag recycling thing is a total scam. Like publics and
all them who have those those things out that said
put your plastic bags in your we recycle them. They don't.
They don't. They throw them away. And I can't tell
(31:59):
you how how much time I've spent, like taking labels
off of plastic wrap, shaking out plastic crap to make
it clean, like taking it all bundled together, taking it
to publics and putting it in the bend. And then
the idea they just take it and throw it away
and use this as just like a pr thing. Oh
my god, I'm so sick of stuff like that.
Speaker 3 (32:18):
Man agreed two quick things on that. You can't count
on your large grocery store chain to do that. You
got to go to like the Charm. You got to
go what we have here in Atlanta and Athens, the
Center for Hard to recycle Materials, because they really do
the work. It's just a big pain. And number two,
just as a quick aside, I went to Belize on
(32:40):
winter break recently, had a great time, but the grocery
store in there was a grocery store in Placentia named Publics.
Publics same exact font and coloring as Publics.
Speaker 2 (32:56):
It's like Ricky Rouse and moneld Muck thought it was very,
very funny. It's funny. They're like, we spell it different.
Speaker 3 (33:02):
What all right? So we're getting off track. The one
of the last ways, I guess, second to the last
ways to look at it is through education levels, because
a lot of times when you hear you know, pundits
on the news talking about the middle class, they'll say
things like, you know, people with a four year college degree,
that's only about forty percent of the population in the US,
(33:23):
and it's really misleading. So I wish they'd just kind
of throw this one out with the Public's grocery bags
because you know, you could have a four year degree
and be a college professor that also has to have
a second job to make ends meet. Or you could
also not have a college degree and on a multimillion
dollar you know, sort of blue collar business. So I say,
(33:47):
just get rid of that one.
Speaker 2 (33:48):
A multimillion dollar battery recycling.
Speaker 3 (33:50):
Business, yeah, because that's where all the money is.
Speaker 2 (33:53):
So yeah. So values also, I agree education levels, just
get rid of that, especially with college not really leading
to many as many opportunities today as it used to
and all of the incredible debt associated with it, that
should not be a measurement for the middle class. Values
is another one too, And this one I was kind
of like, what why, Yeah, and I realized you can't
(34:15):
measure social groups strictly on things like income. That self
identification thing has a lot to do with values. One
we talked about is a nuclear family, which has been
altered dramatically since the middle of the last century. When
I would say, I would argue in the United States
at least the nuclear family was like at its peak
(34:38):
of importance. It's definitely declined. People kind of make family
wherever they can find it. And that doesn't mean that
like all of the values are gone that there was
a twenty ten Vice President Joe Biden middle Class task
Force had no idea that existed, but it essentially went
(34:59):
through and said what are your values and they came
up with pretty basic stuff that that I think most
middle class people would agree with. Economic stability and security.
You want a car for each of your kids as
they get to driving age. You want to take a
family vacation once a year. You want to send those
kids to college. You want to own your home, like
really basic stuff. And the idea that all of that
(35:22):
is up for grabs in this country right now is
really alarming.
Speaker 3 (35:27):
Yeah, for sure. Should we take another break? Yes, all right,
we're going to take a break and we'll talk about
what's gone wrong with the middle class and where we
might be headed right after this.
Speaker 2 (35:39):
Definitely large holds of each o.
Speaker 1 (35:47):
Y s k.
Speaker 2 (35:54):
Is okay, Chuck. So, I think we've kind of said
a couple of times that there's a lot of different
ways you can look at things to say the middle
class is doing great. I know the middle classes hauloed
out in debt. One of the things that you can
(36:15):
really kind of point to is like, how much are
you getting paid. Right, that's a pretty easy one. So
you can look at average hourly wages for non supervisory employees.
So that's everybody who's not a manager or like a
C suite executive, right, just the regular rank and file employees.
(36:36):
There was a peak of pay in nineteen seventy three
of thirty dollars. This is twenty twenty five dollars, right.
Speaker 3 (36:42):
Yeah, always or always on this episode.
Speaker 2 (36:46):
Right in fall of twenty twenty five, we were at
thirty one dollars and fifty cents. So we managed to
gain an extra dollar fifty in average hourly wages in
fifty years. Yeah, and you might think like, oh, okay,
well really, let's think about inflation and everything. I did.
(37:10):
Get this if you went back to nineteen seventy three, right,
one dollar today buys fourteen percent of what it bought
in nineteen seventy three. Yeah, so that means that today
it does. So you can you could buy, using the
same hourly wage today fourteen percent of your groceries if
(37:33):
you went from nineteen seventy three to today. So we
are definitely worse off because things have gotten more expensive,
but wages have stagnated. If anyone ever tells you that
wages have not stagnated, they are lying or they're dumb
or both, and just tell them so. Yeah, I've been
trying really hard not to get worked up, man, and
(37:53):
I'm trying to keep it together. Rre we go, everybody,
I'm keeping it together.
Speaker 3 (37:58):
The idea of the middle class, though, around the nineteen sixties,
was about wasn't just about getting to a spot and
hitting it. It was about everybody continuing to grow and the
overall economy of the United States continuing to grow. And
that has happened, but compensation hasn't happened along with it.
From nineteen seventy nine to twenty twenty five, productivity in
(38:21):
the United States rose eighty seven percent, but that hourly
compensation rose by thirty three percent for non supervisory workers.
Speaker 2 (38:31):
Right. And there's two ways you can interpret that. If
you're like, well, unions are gone, you could say if
you're an owner, well you get rid of the union's
productivity increases. Unions make lazy workers. Another way to put
it is that without the unions, you can exploit workers
more easily and get them to work harder because they're
afraid of losing their job. Right, Yeah, regardless of how
(38:52):
you look at it, like, there's no way to interpret
it differently. If your wages have increased thirty three but
productivities increased eighty seven percent, that means that that extra
wealth that was generated had to go somewhere, and it
didn't go to the workers. It went to the wealthiest people.
And there are just like, if you want to just
(39:15):
look at eye popping numbers, just look up income inequality
in the twenty first century, because it has gotten completely
out of control compared to how it used to be.
And I mean how it used to be. Like I'm
talking the eighties.
Speaker 3 (39:29):
As Sam Jackson would say, hang on your butts. What
do you say, Jurassic Park?
Speaker 2 (39:34):
Hang on your butts?
Speaker 3 (39:35):
Yep, hang on your butt.
Speaker 2 (39:36):
You need a cigarette sticking out of your mouth?
Speaker 3 (39:38):
Oh, I've got it, pal, all right, So these numbers
are going to be slightly depressing and slightly eye popping.
Annual wages of the bottom ninety percent of Americans rose
by twenty nine percent from seventy nine to twenty twenty one.
For the top one percent during over that same time period,
they rose two hundred and six and the Forbes four
(40:04):
hundred lists it's a list that we put out in
or Forbes magazine puts out about the four hundred wealthiest Americans.
They should probably just stop doing this altogether.
Speaker 2 (40:14):
I know it ruins society.
Speaker 3 (40:17):
But you mentioned the nineteen eighties, nineteen eighty two that
it was the initial Forbes four hundred. It had thirteen
billionaires on it. Now everybody on the Forbes list is
a billionaire, and there's another five hundred billionaires that don't
get on the list.
Speaker 2 (40:34):
Wow.
Speaker 3 (40:35):
So in nineteen eighty two there were thirteen billionaires. There
are more than nine hundred billionaires in the United States
right now who have a collective worth of six point
six trillion dollars. I'm sorry, that's just the Forbes four
hundred have six point six trillion. Forget the other five
hundred billionaires.
Speaker 2 (40:51):
Okay. So another thing that that Forbes list pointed out
is that the total wealth in all of the United
States is one hundred and forty trillion dollars. The bottom
fifty percent owns four trillion of that. That means the
top fifty percent owns one hundred and thirty six trillion
compared to four trillion. Ah Man, there was one other
(41:12):
statistic I found too, between nineteen seventy five and twenty
twenty four, there was a wealth transfer upward to the
top percent that totaled fifty trillion dollars. So, however you
want to put it, however you want to look at it,
the middle class and the lower class have been held
(41:32):
back while the wealth that they have been producing has
moved upward. And a big problem with that is when
you have wealth concentrated in the hands of a few,
they're making the decisions about what happens with that money,
rather than hundreds of millions of people all making individual
decisions and collectively making decisions that are like market signals
(41:53):
that tell people, I'm going to go make this, I'm
going to stop making this, I'm going to make this
price that all these people are upset because they don't
have good healthcare, we better do something about that. None
of that matters because they don't have money, so they
don't have power, and they're afraid of losing their jobs.
So you can do basically whatever you want to them.
That's what happened.
Speaker 3 (42:11):
Yeah, And you know, politically speaking, the wealth and the
powers is who controls everything. They obviously via campaign donations
is the most clear cut way, but all kinds of
interventions to basically let the top one or two percent
make the decisions for the majority. There's a social scientist
and this isn't us railing on stuff. This is just
(42:33):
how it is. Like, if you're saying this isn't the case,
then you're lying. Like you said, there's a social scientist
named Richard Reeves who said that the top twenty percent
of earners are basically have been completely successful in pushing
zoning regulations and tax policies that benefit them all at
the expense of the middle class. They gain the systems
(42:55):
to pass that you know, wealth down to their children
or to get their kids into the better It's just
the way things have gone in the United States.
Speaker 2 (43:04):
Yeah, and the problem, one of the big problems is
people are going to be all over our iTunes reviews
being like, these guys are liberal idiots. You don't know
what they're talking about. It's not liberal and conservative, and
it's not Republican and democrat. This is strictly a class issue,
and the idea that you are defending a class beyond
yours that is exploiting your own class, including you. That's
(43:27):
a problem because it's presented as a political thing, and
we're so tribal when it comes to political affiliations that
you will defend against your own self interest.
Speaker 3 (43:38):
Yeah, because it's.
Speaker 2 (43:40):
Being presented to you as a political issue, and it's.
Speaker 3 (43:42):
Not happens every voting season. That happens.
Speaker 2 (43:46):
Yeah, And it's true. And I'm not picking just on
conservatives or Republicans like Democrats do it too, like tr
tribal and toxic and unhealthy. And if, oh man, if
we could ever come to get there and break down
those lines, oh my gosh, people are so ripped up
right now that it would just be magnificent, the sweeping
(44:08):
changes that would happen. A new renaissance, Yes, renaissance too,
the sequel to h Yeah.
Speaker 3 (44:17):
Here's the thing. You know, Goods have gotten cheaper though,
if you want to look at again, comparing in today's dollars,
groceries are generally cheaper than they were in the mid
seventies because the mid seventies, as we said, was pretty bad.
Things like you know, clothing and furniture, electronics, all that
stuff is way cheaper than it used to be. If
you look at you know, back when you bought a VCR,
(44:38):
when those first came out, and they were like a
thousand dollars, you know, stuff like that is all like
the bottom has fallen out on those kind of prices.
But that hasn't happened in the housing market, which is
a big deal for the middle class. Like you said
in Act one, that median sales price of a house
and again in today's dollars, it was three hundred thousand
dollars in nineteen seventy nine. It's more than four four
(45:00):
hundred thousand dollars today. And I think we said it
was sixty nine point two percent at its peak of
home ownership in two thousand and four. As of I
think twenty twenty two. You know, what's happened is that
you know, I think you said if it was about
sixty five percent, so it's not that big of a difference,
(45:20):
but it's that age of buying your first house has
just gotten older and older and older. In twenty twenty two,
only sixty two percent of forty year olds own their home,
whereas the Boomer generation sixty nine percent of forty year
olds owned. And the same can be said for rent
(45:40):
and childcare, in college and healthcare. It's just all these
things are outpacing earnings.
Speaker 2 (45:47):
Plus also that sixty two and sixty nine percent is
a little misleading because there are way more boomers than
there are Gen x who are forty now, So that
so sixty nine percent of boomers is a new manically
a much bigger group than sixty two percent of gen.
Speaker 3 (46:04):
Xers, right, which also means that that's a greater number
of houses that are now locked up right being passed
on to their kids. And you know, not saying that
you shouldn't own a house and pass along your kids,
but that as far as the housing market goes, that's
just a lot, right.
Speaker 2 (46:21):
So Chuck, what do you what are we going to
do about this? What are some things we can do?
Speaker 3 (46:28):
Oh? Man, let's solve it right now on the spot. Well,
I mean, I don't know, man, It's not like this
all over the world. If you look in Europe that
there is a middle class there, but it's not quite
the same. They aren't maybe don't have the kind of
wealth that upper middle class does here, but they have
the income and quality isn't as great generally, they have
(46:49):
stronger social welfare programs, like the danger of falling into
a desperate life straits isn't as great over there. I
saw I think on Instagram recently. It was an interview
with a guy that was a had a good job.
Speaker 1 (47:05):
You know.
Speaker 3 (47:05):
It was one of those stories where the guy was
on the streets and he had a degree in chemistry
and he had a good job, and you know, I
read the comments because I was curious if people were
going to be like bashing this dude or what. And hearteningly,
a lot of the people were like, Hey, I worked
in shelters for the un House for years and we
saw all kinds of people come through here. We saw
(47:28):
doctors and attorneys and people you know that just you know,
sometimes you're a bad circumstance or two away from that
kind of situation, and it's just not like that in
Europe generally speaking.
Speaker 2 (47:43):
I remember during the two thousand and eight recession of
reading some statistic that something like at the time like
forty percent or something like that of Americans were one
paycheck away from being homeless. Like that's how little savings
and cushion that most Americans had.
Speaker 3 (47:59):
Yeah, or having to make you know, healthcare decisions like
that aren't good for your life because you can't afford it,
because it will bankrupt your family. You're having to put
yourself and your family in peril physically.
Speaker 2 (48:15):
Right, That's part of that why the European middle class
is much more secure because most of them have universal
health care.
Speaker 3 (48:23):
Yeah, they're not bankrupted by a diagnosis.
Speaker 2 (48:26):
Right, But even on more day to day pedestrian stuff.
So the lower income you are, the more inflation affects you.
Where Like if your higher income and you go gas
up your car and you're like, wow, gas went up
twenty cents today, that sucks, and you just don't think
about it from that point on. If your lower income,
(48:47):
you might roll up to the gas station and be like, oh,
I can't afford to drive my car to work today
because gas went up twenty cents a gallon. So that's
another issue with the whole thing too. It makes it
tougher to get a head when you can't afford the
basic necessities because they're growing out of your reach day
(49:07):
by day.
Speaker 3 (49:09):
Yeah. I mean when I was a snot nosed, no
at all college kid working at Golden Pantry in Athens, Georgia,
I used to and you know, I was working at
Golden Pantry, so it's not like I was making any
kind of money, but for a college kid, it was like, hey,
that's great. I had everything I needed making that seven
dollars an hour or whatever, because my parents were generally
(49:29):
paying for my education and it's like easy street. I
would I would wonder why someone would come in and
buy like seven dollars worth of gas. I aloud be like,
what a weird number? Why are you putting seven dollars
worth of gas? Because it didn't occur to me that's
all that they could afford. It's like, why don't you
just fill your car up? And it's like because it
(49:50):
couldn't afford to dummy? Right, I was a dummy, that's right.
Speaker 2 (49:54):
Yeah, No, I know exactly what to mean. I've been
on both sides of that.
Speaker 3 (49:58):
Yeah, I mean, you know the night abitab a college kid,
So in a way.
Speaker 2 (50:03):
Was that the golden pantry at Alps?
Speaker 3 (50:06):
Uh No, I worked on the college station road.
Speaker 2 (50:09):
Okay side, gotcha. So we didn't figure out how to Yeah,
I had the same kind of job, and it is
a very weird job. So we didn't figure out how
to fix anything. Chuck, you got any ideas, I think
that you could learn a lot from Europe expanding social
safety nets. We could stop making that a political thing
(50:32):
and be like, no, actually, this can help everybody. I
saw that in New Mexico has started free childcare for all,
doesn't matter what your income level is, doesn't matter, Like
you can put your kid into childcare for free, and
that's a huge expense that save for the average person.
Speaker 3 (50:48):
Yeah.
Speaker 2 (50:48):
I think New York is trying to do that, like
Mom Donnie is trying to to institute that in New
York City too, So that could be a huge trend.
Just free childcare, Universe childcare could make a huge difference
in people's income.
Speaker 3 (51:04):
Yeah, and all of that is because people want to
go out and work their job to make money for
the man.
Speaker 2 (51:11):
Yep, yeah, well put man, you got anything else?
Speaker 3 (51:15):
Got nothing else?
Speaker 2 (51:16):
Okay, I don't either, which means it's time for listener man.
Speaker 3 (51:23):
It is a quick correction. We heard from people from
Tennessee because we stole their college. Hey guys, longtime listener here.
Your show has fueled many runs and chores over the years.
Quick Nashville nitpick from a proud local. In the Flexner
Report episode, you mentioned Maharry being right here in Georgia.
Nashville would like to gently reclaim that, guys, Mahary medical
(51:45):
College has been proudly in Nashville since eighteen seventy six,
and we're pretty attached to it. Totally understand how geography
gets slippery mid podcasts, but just wanted to defend a
hometown institution and that is from Bridget Chevron or Shavaine.
And we heard from a lot of people, Bridget, So
I don't know how we screwed that up, but we did.
Speaker 2 (52:04):
Yeah, we got it screwed up royally. I even went
back and was like, surely there's a Mahary College in
Georgia too. Nope, Nope, it's just the one in Tennessee.
So sorry everyone in Tennessee who took offense to that,
because we did hear from a lot of you.
Speaker 3 (52:16):
For sure, that's right, But we're neighbors and we like
to think that we're all the same.
Speaker 2 (52:20):
Yeah, for sure, we all shared your medical college. Yeah,
in the Tri state area. If you want to be
like Bridget and send us a really nice email correcting us,
we love that kind of thing. You can send it
off to Stuff Podcast at iHeartRadio dot com.
Speaker 3 (52:38):
Stuff you Should Know is a production of iHeartRadio. For
more podcasts my heart Radio, visit the iHeartRadio app, Apple podcasts,
or wherever you listen to your favorite shows.
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