CLASSIC: Is the middle class going extinct?

It's no secret that inequality is rising in countries around the world, but what does this mean for the future? What is the middle class, exactly -- and why do some people believe it's going extinct? Find out in this classic episode.

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Episode Transcript

Speaker 1 (00:00):
This week's classic episode is one that remains relevant and
in no small way frightening in the in the modern day. Uh.
You know, when you hear about class structure in the US,
one of the big things you hear, especially every time
there's an election coming up, is you'll hear people talking

(00:20):
about the middle class. The people who are maybe not
the you know, working poor, right, maybe not dependent upon
direct government aid, but maybe they're also not you know,
a paycheck away from being out on the streets. But
they also don't own a yacht, you know what I mean.
They might have owned like a vacation house somewhere, but

(00:42):
that's that's it. You can there'll be a middle class
and on a vacation on a second home. I would
have thought that would have bumped you up to the
next level. I'm pretty sure when we're talking about the
middle class here, as we're gonna learn in this episode,
it is a lot of people at least that are
classified historically as being in the middle class. It's a
wide range or that call themselves the middle class. You know,

(01:04):
there's there's such a wide variation because you know, there
there are a lot of people who, of course they
say I don't want to think of myself as below
middle class. You might be surprised to learn there are
a lot of people that most people would consider upper
class who say, whoa, whoa, guys, I have only two rolls, Royces,
I'm middle class just like you. It makes me think

(01:25):
of that scene at thirty Rock where Steve Bishemy is
like wearing like a skater outfit and like holding a
skateboard and like a middle school and he's saying, you know,
greetings fellow kids. This would be like greetings fellow plebs. Right,
it's it's uh it Also, speaking three reck reminds me
a little bit of that Alec Baldwin line that always
stuck with me. Uh. Liz Lemon asked him why he's

(01:46):
wearing a tucks and he says, it's after six Lemon,
what about a farmer god? And so we see, I
mean we're joking. But today's questions is the middle class
going extinct? Other questions um that we should probably think
about two as we listen to this classic episode are
has the middle class already gone extinct? What is the

(02:08):
middle class? Was it a fad to begin with or
is it just endangered? Let's learn together from UFOs two,
ghosts and government cover ups. History has riddled with unexplained events.
You can turn back now or learn the stuff they
don't want you to now, Hello, welcome back. My name

(02:32):
is Matt and I am Ben, and this is stuff
they don't want you to know. And today, Ben, we're
tackling a topic that's gonna hit home with you right away.
And I can tell I know, how can you tell
me personally? Or everybody out there listening with us, everybody listening,
this is something we can all identify with, well, not
all of us, but we've probably heard about it. Perhaps

(02:54):
are robotic listeners who loved, uh love that episode, by
the way, perhaps they can identify with it now. Matt,
I have to say that a lot of people before
we get started, a lot of people don't know that
you have some amazing voices under your belt. I guess
in your throat. You get the gist of what I'm saying. Yes,
they exist mostly inside my throat. Some of them are

(03:15):
in my head. Um Ever, every once in a while
they coincide. So we did, uh, we did the opening
for this episode a couple of times today because Matt,
you were doing brilliant public radio voice that sounds really good,
and I was I was just messing up an Ira
Glass impression. So that's exactly what it was. I was

(03:39):
trying to picture what it was. N Well, if it's
a good impression, then you just know. Well, I haven't
been listening to as much this American life as I
probably should be. Well, we're big fans, but we also
want to tell you this, listeners, just so that you
know that maybe you can write to Matt asking them
to do some voices and uh maybe maybe he will

(04:01):
because I can't persuade you did hear them. No, you
would be hard pressed to persuade me to do this.
The voices are usually things I do, I don't know,
in the in the shower, in theater class in ninth grade,
in our office after six Yeah, that that's when they
really come. That's when they kick in. Yeah. I feel
like I can hear the voices in your head then too.

(04:23):
Uh So. One thing that I always think about when
I hear the phrase middle class, right is I think
about the what we call in the United States, the
American dream. Yeah, man, I think about suburbia, two point
five kids, maybe a dog, sometimes cats. In my case,

(04:46):
it was cats. Okay, Yeah, probably own a car, take
a vacation once in a while, at least making payments
on a car. Right, Yeah, What the heck is the
middle class? So many people in the West talked about it,
and the is always this big concern. You know, every
every few years, Uh, some pundit will come out on

(05:07):
your local radio or television say, the middle class is disappearing.
What does that mean? What does that mean? Well, let's
define our terms first of all, as we like to
do here. Well, the middle class is a financial label
above most other things, but it's also it kind of
talks about a lifestyle or refers to a lifestyle about

(05:31):
what a family of a family unit can afford. We're
again we're talking about home cars and you know, to
some extent, education and also even the ability to take vacations. Uh,
there are like budgeting and saving encompasses a lot of
different things, a little bit of life investing. So what then,

(05:54):
it's not just physical goods, the ability to buy physical
goods like what's eighties song? Uh? Material World? Yeah, do
you want me to go into it? How did they go?
I don't know that I can legally in this format,
but it's Madonna and I'm yes, I'm checking. Um, I'm

(06:16):
throwing aside. I hear with our super producer Noel Brown
on the ones and twos because you guys, Matt and Noel,
no uh darn your everything about music. They know a
lot of stuff which is dabble. We dabb you guys
dabble for sure, which is why every so often you'll
hear some uh some amazing sounds on our audio podcast,
our video podcast. But I digressed so hard. Yes, So

(06:43):
it's not just that this households could buy material goods.
It's that there is this lifestyle. Um. Maybe they don't
have two homes and travel to Florida every winter or something,
but they do probably have a summer vacation when the
kids out of school, yes, exactly, and things like that.

(07:04):
So the further we drill down into this definition of
what a middle class is, uh, the more that we
find there is not necessarily one size fits all rule
because what means middle class depends on the country in
which you live, absolutely, and as we live in the US,

(07:24):
we're going to be focusing primarily on that. Um. So
so let's look at the money factor first of all. So,
the average income in the United States was fifty one
thousand and seventeen dollars in two thousand and twelve. So

(07:45):
that's just the the um then is that mean, I
guess must be the average the middle number. So counting
all the people who made negligible and counting all the
people who made a lot, we end up with a
alarmingly deceptive number because you can't take an average of

(08:06):
that many people and that many uh in that many environments,
in different socioeconomic circumstances and expect it to be very helpful.
And there are two things about that number. What's that?
First of all, it's pretty high, yeah, but it's not
the highest. It's not like cutter or something, right, but

(08:27):
it is globally pretty high. So let's look at another
place spend. Let's say the Democratic Republic of Congo. The
average income there is two hundred and thirty six dollars. Wow.
We should note, of course, as well, that that is
one of the poorest countries in the world by this metric.

(08:49):
But it's weird, right, because they also have a wealth
of resources and suffer from what is often called in
international politics the resource curse, the resource curse, which is no,
that's Okay, that is just another show. Uh, and we
will have to cover that again. I think we mentioned

(09:10):
that before. And another talk about international banking we mentioned
in um resource Extraction. You can check out some of
our We had an outdated video now, but it still
holds up pretty well called is China Colonizing Africa? Which
I would recommend to anybody who's interested in stories of
resource extraction or establishing slash fighting hedgemoney. And if you

(09:34):
don't want to look at our videos, then just look
up the current president of Bolivia so you know how
he's working with you guys. Uh. And remember that we
said Bolivia because that that'll be interesting later. So there's
a stand. If we were to take a standard definition
from like a financial website, we would say, uh, we
will find a couple of different numbers. One that's commonly

(09:56):
found is that twenty five thousand to a hundred thousand
dollars of income a year is most people would consider
a middle class income. Uh. This accounts for a wide
cost of living differential. So you know, it costs more
to live in New York City than it does in
um Fargo or Bared Forks, and so anyone who lives

(10:16):
in San Francisco or New York will tell you that
twenty five thousand dollars a year is dirt, poor, dirty, poor,
um nothing. And that's because, uh, in that city, you
can't you can't make a long con you can't grow old,
support of family and retire and have a place to

(10:38):
sleep at night, right, right, dollars a year, I mean
you couldn't. If we'd be you'd be really hard pressed
to find a place to live. Yeah. Now there are
subsidies for fure and for residents, right, but this and
you know, of course we're not in any way detigrating
anybody who makes twenty five dollars and lives in a

(11:00):
very expensive city. Absolutely not. It's just the reality of living,
you know, cost living in surviora it's very different. Like Atlanta,
where we are based, has one of the lowest costs
of living for a city its size, and that only
ever becomes apparent to me when I'm in another city. Yeah,

(11:21):
all right, So what we found is that this means
essentially there's no universally recognized definition of middle class, but
there is something different about the socio economic makeup of
Western countries. Over the last few decades. In many countries.
The Western middle class, however vaguely defined, isn't prospering at

(11:43):
least in the way that it once was back when
we had an economic boom with construction and industrialization in
the US, when we were making cars, let's say, a
lot of cars. Yeah, that's true. Is a sea change
that is troubling to people, And there's this. We can't

(12:06):
make any bones about it. This is not a conspiracy theory,
no matter how often it may be presented as one. Uh,
this is not a It is true and hard numbers
that inequality in the United States is rising in some
areas more than other areas. So what does this mean
for me? Would be most people's question, right exactly, from

(12:29):
the Koke Brothers to uh, somebody making one dollars and
living just outside of New York, the question would always
be what does this mean for me? Very different answers
and exactly so it First of all, it means a
lot of different things depending on where you are. Like
we said at the top, in developing an emerging markets,

(12:50):
we're actually seeing a rise or in emerging middle class.
So it's not so much that the global middle class
is dying as it is that the middle class. What
it means b middle class is moving. Yeah, isn't that
a weird idea. It's just that that type of emerging
wealth has just transferred, it's just took a trip across

(13:12):
the world other other different places. That sort of lifestyle
is becoming increasingly popular in countries where it wasn't once
upon a time exactly. So, then we also see that
rising inequality has dangerous effects on the existing UH middle
class of these of these different countries. In October of
two thousand fourteen, Interestingly enough, the United Kingdom's wealthiest ten

(13:36):
percent controlled fifty four point one percent of the country's
total wealth UM. If we if we look at the
math of that, you know, it can be the deceptive thing.
A lot of these statistics can sound scary, and some
of them were constructed not by us, but constructed or
framed to sound frightening. We know that inequality is on

(13:57):
the rise in the United Kingdom, it's on the rise
in UH the United States. Maybe not for the same reasons,
but there have been some pretty smart people making some
pretty good studies about this right. The authors of the
new study, Emmanuel Says and Gabriel Zookman, highlight that the
wealth inequality was high in the beginning of the twentieth century,

(14:20):
decreased steadily from nineteen twenty nine to nineteen seventy eight,
but was continuously increased ever since then. Moreover, the increase
in wealth inequality is almost completely due to the increase
in the top point one percent wealth share from seven
percent in nineteen seventy nine to twenty two percent in
two thousand twelve, nearly as high as in nineteen twenty nine.

(14:43):
The study also showed that the wealth share of the
bottom wealth edged up until the mid nineteen eighties and
has been declining steadily ever since. And today, Uh, huge
majority of Americans acknowledge the growing gap between the rich
and the poor, and a lot of people say, hey,
I think that is going to be a problem, if

(15:04):
it isn't already. But there's little, uh, there's little agreement
on the causes of this rising inequality or how to
address it, you know what I mean, sure, Ben, So
that question is hugely complex, and you'll hear people like
Russell Brand talking about it on talk shows, even wrote

(15:25):
a book about it recently, UM and lots of other
people just trying to figure out a way to help
stop this inequality from increasing. And then there are people
who say that it's part of the system, so it
should exist in some way in a capitalist society sort
of inherently demands inequality. And then on the far side
you have people on the far far other side, you

(15:47):
might have people who say, uh, something like iron Rand
was right with her opinion, and I do mean opinion
about objectivism. And then you have people on the other
end of the spectrum who say, you know, why do
we need to have any sort of system. Let's just
let people do what they want because people are inherently good.

(16:09):
What's the worst that could happen? Right, and then we'll
all be equal. Uh, However, we have some compelling physiological
evidence that human beings are not capable of considering the
rest of the human race as a peer, as a
as a group of people. We crap out around a

(16:30):
hundred and fifty. That's all our brain can count. Uh, friends,
stuff on that, yeah, Dunbar's number. Yeah. Um, And now
we can go ahead. We set the stage right, the
extinction of middle class, the definitions, uh, the exploration and

(16:50):
some of the assumptions, and now it's almost time for
the really crazy stuff. But first the word from our sponsor.

(17:15):
You know, usually we have our sponsor, Illumination Global Unlimited
coming in. Yeah, but they're not here this week. I'm
not sure. Maybe they'll come back sometime. Yeah. It all
depends really if the stars are in the right positions.
And sure there are a lot of factors that Illumination
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(17:37):
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Illumination Global products. But anyway, just little ps a there. Uh,
here's the crazy stuff. Here's where it gets crazy. I
love it. Is there an oligarchy that is developed in

(17:58):
the United States? That's the big question. We all know
what an oligarchy is. It's a small group of interest
or whatever running a larger group. Sure, so, do you
want my personal answer or my objective research answer. Uh,
let's see first the objective research and then your personal take. Well,

(18:21):
whether or not this has developed inside the United States
is a matter of debate. There are a lot of
different opinions, but there's something even more surprising about this subject.
When you look at the research across the world. The
globe as a whole, inequality has actually decreased, at least

(18:42):
for a time leading up to the recent economic disaster,
so to two thousand seven, and then some of the
other stuff that's been going on. So things were getting
better for a little while. But you have to be
really careful when you look at the stats. All Right,
we've got a great report via the Guardian the richest
one percent of the world's popular nation are getting wealthier,

(19:02):
if not healthier, which alas said, owning more than forty
eight percent of global wealth. This was according to the
Credit Suits Global Wealth Report, which you can find online.
And uh, here we go, though, when we say the
richest one percent of the entire world, that's such a
bigger number in both directions. So what what What are

(19:24):
the numbers meant? Well, a person only needs three thousand,
six hundred and fifty dollars including the value or equity
in your home to be among the wealthiest half of
the world citizens. Wow, okay, and then uh, to be
a member of the top ten percent of global wealthholders,
you need more than seventies seven thousand dollars and that

(19:47):
isn't a not like how much money you make every year,
that's how much worth or something. And then, uh, last,
but not least, can we get a drum roll? No,
you need seven hundred and nine thousand dollars to belong
in the top one. Now that's smaller. That's a smaller

(20:09):
amount than I thought. But I guess that's because it's
a much bigger one. Sure, so that is a lot
more money than this guy will ever see in his lifetime. Um,
but you know it's something to shoot for. Ben Uh.
The American dream as where we started in the beginning,
So let's go straight to some of the more conspiratorial stuff.

(20:33):
One thing that I thought was interesting that comes to
us from UH political spheres, right, is the idea that
concerns over inequality are some sort of noise or propaganda
made by socialist and communists seeking to overthrow capitalism. So
I guess the argument there would be that the nature

(20:56):
of inequality itself is being vilified and that it's not
bad for a few people to control as much wealth. Yeah,
in in the eyes of someone UH talking about this,
I would say they see it as more villainizing the rich,
and at least that in my head, that's what I see.

(21:17):
And I would, you know, I would argue that perhaps
those arguments come from the wealthy a lot of the times, right,
and that would that would make sense because opponents of
that argument would say that there is a group of
wealthy elites actively working to disempower the populations of various countries,

(21:38):
which is not I'm it's gonna I'm gonna be honest.
It's totally been proven that that's happened in the past.
We know that that has happened in the past, um,
during times of imperialism or colonialism. And no, I'm not
just talking about European expansions. I'm talking about the history

(21:58):
of tribute states, the history of vassals and peasants and
servants and lifelong slavery which still exists. I think Mauritania
still has quite a large slave population. Yeah. And also
if you look at the power of money in politics now,
especially in the US, um, you need a certain amount

(22:21):
of money to make any kind of waves in the
political sphere here, and you know, if you're increasing that
that wealth gap, then perhaps that's one of the goals.
I don't know, I'm just a guy man. Yeah, me too.
There's also there was all you remember. This might be
a little bit before some of our listeners time, uh,

(22:41):
but you remember growing up and hearing about the the
idea of trickle down economics, um, which I still probably
have a child's understanding of that, because I didn't really
get it when I was a kid, and I haven't
looked into it too much. But I just want to
present these counter arguments. Yeah, trickle down economics, so the
idea that when the the ultra wealthy have a lot

(23:04):
of money, they spend a lot of money, and then
it trickles down throughout the economy because they're spending money
here and there, and here and there is everybody else.
That's my understand. Inherently, I don't understand how that would work,
because that is the dispersion of wealth, not the accumulation
of wealth. And also because of Swiss bank accounts and

(23:25):
or Australian incorporation, wouldn't you be more likely to try
to save money? I don't know. I I don't know.
But there's another point here, and this is the one
that I think has the most sand that the relationships
between governments and businesses are empowering wealthy actors and by
that we mean companies as well as individuals at the

(23:45):
expense of the poor. Yeah, and again look at the
representation and governments where especially in places where money makes
the politician. Right. Yeah, So we we've talked about this,
you and I extensively when we've done any a series
on financial shenanigans. There's this, there's this argument. A lot
of people here in the States are very cynical about

(24:09):
the relationship between financial institutions and the regulatory bodies set
to watch those financial institutions. I can't air quote hard
enough uh on regulatory or watch. But but there and
you know, the idea, there is something that we lampooned
in an earlier podcast that these uh groups can't really

(24:33):
watch each other or have the kind of authoritative relationship
they need to have because they end up work the
individuals end up working for the same companies. But to
be fair, the counter argument is that this field is
so rarefied and complex that they're the only people qualified
to work in it. Sure, it makes my eyes, my

(24:54):
eyes rolled on if that I saw that, I saw
that they're rolling hard. They're still rolling uh So without
me personally commenting on it. I just want to present
that argument and counter argument. It's true, though, that governments
have in the eyes of the public, not just in
the United States but also in the United Kingdom. UH,

(25:15):
that governments have been seen as not stopping crimes by
large financial institutions, and typically that scene as further proof
that the middle class is somehow being squeezed out of
a judicial process, a legislative process, things like that. Um.

(25:35):
But another thing that you and I have run into
quite often is that the laws. It's it's very important
to figure out who gets to write laws, you know
what I mean. And the concerns that we have read
about with the idea of a disappearing middle class is that, first,
it's so very vaguely defined in the United States. If

(25:57):
you ask people to pull the majority party of people
in the United States would say that they are the
middle class. UM. And politicians have wildly differing ideas about this.
But are these people being shut out of legislation? That's
a question, right, It's a really good question, and I
think it should be addressed by people who know more

(26:19):
than us, right, which might be you listeners hopefully, So
we wanted to know if the if you think that
the middle class is disappearing, and let's keep in mind
also that over the great span of human existence, the
middle class is a very recent phenomena. Yeah, sure, absolutely. Um.
And also here's another question. Is it necessary that inequality

(26:44):
exists for let's save the entire system to run correctly.
That's yeah, that's a really good question. Is there a
conscious drive by someone or some group to accelerate inequality?
Then I was reading this thing right before we came
in here. Um, you can look this up. It was
about restaurants in the that aim for the middle class,

(27:07):
then the middle of the road, like and it mentioned
specifically places like Red Lobster. Um. Yeah, and just talking
about how those being in owning a restaurant in that
level right now is really dangerous because restaurants are starting

(27:28):
to shift. Um. At least the ones that are prospering
right now are either the really ritzy, high priced places
with locally sourced food that's just prepared by you know,
chef genius in the back, and then to the fast
food this is as cheap as it can possibly get,
and the people in the middle are finding that they're
just losing money week after week. So if middle class

(27:53):
families aren't disappearing, middle class restaurants are, well, people aren't
going out. The idea is that the people who find
themselves and identify in the middle class are trying to
save every bit of money that they possibly can because
they're feeling squeezed, you know, perhaps not getting that small

(28:13):
raise for costs of living every year, or not getting
just what all the different reasons, emergency, anything that could
pop up. So I think that's really interesting to me,
and it made me think about my past growing up
and we my family just says a little anecdote. I
want to see if anybody identifies with this. When it
was a special occasion, after I got to about ten,

(28:36):
red lobster was like my jam. So if it was
a special occasion, I was like, Mom, Dad, please can
we go get some of those garlic? Yeah? Um, that's
all I wanted. I don't care about the lobster. I
didn't care about any other stuff. I just wanted those biscuits.
But yeah, we could only afford to go there. Maybe
you know a couple of times a year, dude. But

(28:59):
it just makes me, Uh, I see what you're saying,
because it now in retrospect, you're thinking, Yeah, this is
not a place we would go every week exactly because
we couldn't afford to, at least at the time. Um,
but yeah, it makes me. It just makes me wonder
what effect that has on the wider scale, just if

(29:21):
you're just looking at restaurants, Like what what else is
starting to disappear? Sure, and that's a really good question,
like are there certain types of cars that people aren't buying? Um?
What about home home purchases? Right? Uh, vacations, all the
stuff we named in the beginning essentially, and you know
you can track that to the skyrocketing costs of some

(29:44):
of these things as well as wage stagnation. And everybody,
big hand to know for editing that thing. I was
trying to say that sentence like four times in a row. Yeah,
big up. Everything you like about this show is probably
nu all right, We've got to get out of here, everybody.
I'm so sorry, Matt. I have one piece of listener

(30:05):
mail for you. Fine punk g writes to us and says,
I really enjoy listening to your podcast. While listening to
the show today, I'm stuck on wanting to know if
Matt Frederick is Canadian. He sounds like he is. That's
all they said. Really, that's that's what he wants to know. Wow. Hey,

(30:29):
uh no, sir, I I am not Canadian. I was
born in Alpharetta, Georgia, and I have lived less than
fifty miles from there my whole life. So wow, as
far as we know. And on that note, ladies and gentlemen,

(30:49):
I apologize for interrupting you, Matt. I thought was a
great question, and when should get it out there in
case other people believe that you're Canadian. Not that there's
anything wrong, It's quite all right, ben, So everybody find
us on Facebook a and uh, go ahead and hit
us up on Twitter. We're at conspiracy stuff there also
on Facebook conspiracy stuff. Go to our website. Stuff they

(31:10):
don't want you to know. For everything we've ever done,
it all exists there and it's all wondrous. Uh. The
U r L maybe a little long, but hey, you
can you know, you can figure it out. And that's
the end of this classic episode. If you have any
thoughts or questions about this episode, you can get into
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of the best is to give us a call. Our

(31:31):
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(31:52):
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