Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
The US Upper Middle Class Hasn’t Vanished: Another Economics Chart for Alexandria Ocasio-Cortez
On a recent podcast, New York congressional candidate and democratic socialist Alexandria Ocasio-Cortez complained about the outdated, stuck-in-the-1990s campaign strategy of national Democratic Party leaders: “They were campaigning most when we had more of an American middle class. This upper middle class is probably more moderate but that upper middle class does not exist anymore in America.”
My best guess is that Ocasio-Cortez’s comments suggest a belief in a hyperpolarized, “1 percent vs. 99 percent” modern America. There’s only the rich getting richer and then everybody else. But that doesn’t appear to be an accurate description about what has been happening with incomes. (For more on Ocasio-Cortez’s thinking, check out “The uninformed economic views of Alexandria Ocasio-Cortez, in 2 charts.”) As this 2016 story in The Wall Street Journal explained,
A range of data after the recession and the housing bust supported the idea that only a tiny elite of U.S. society, generally seen as the top 1%, had rebounded and was doing well. But a growing body of evidence suggests the economic expansion since the 2007-09 financial crisis has enriched a much larger swath of the upper middle class, and that a deeper income divide is developing between that top quarter or so of the population and everyone else. The latest piece of evidence comes from economist Stephen Rose of the Urban Institute, who finds in new research that the upper middle class in the U.S. is larger and richer than it’s ever been. He finds the upper middle class has expanded from about 12% of the population in 1979 to a new record of nearly 30% as of 2014.
Top Dems might be stuck in the Clinton era, but Ocasio-Cortez seems stuck at a 2010 Occupy Wall Street rally. The 1 percent is yesterday’s enemy. Now the bull’s-eye is on the top 20 percent, the rich and the upper middle class. They are the “dream hoarders,” the favored fifth who hog the American Dream by tilting the nation’s politics and economy to their advantage.
But it’s important to note that the lower and “middle” middle class decline is apparently because of more families qualifying for the upper middle class through higher incomes. And if you are worried that the UMC is using its size and economic power to make America worse, then it’s time to think about policy fixes such as reforming zoning laws and occupational licensing rules. (Another would be curtailing the deductions on mortgage interest. Oh, I forgot, that’s already happening thanks to the new tax law.) Not sure if any of those items are on the agenda of AOC, who has been called the “future of the Democratic Party.”
Published in Economics, Politics
Not only are “policy fixes such as reforming zoning laws and occupational licensing rules” missing from the AOC agenda, she wouldn’t have the faintest idea what you were talking about if you raised the subject.
Outstanding! Thanks, James.
Note: Your last 5 columns, maybe more, have been Wins, giving you 15 new points and bringing you back into positive territory! I hope you’re not due to write another piece implicitly assuming that mathematical economists can predict the future, because math. Those count for negative 3.
Sarah Palin, a sitting governor, was painted as an inexperienced lightweight while AOC is the new face of the Democratic Party and the media hangs on her every word. Maybe some day they can pair her with someone like Biden and she can put him over the top like Sarah did with John McCain. Oh, wait!
Silly Pethokoukis, facts are for Conservatives. Democrats rely on feeeelings for policy decisions and elections.
I am betting that A-O-C thinks that the Upper middle-class folks she knows are actually middle class. She sees billionaires above and poor folks below and lumps everyone else into the middle. When she was younger she probably didn’t hang with the uppers and now that she is one, they seem to be middles.
I read the report. It is well done, but it should be noted that income data does not include non-cash payments, so folks on the bottom are better off than it appears.
What are the definitions of these categories? Have those definitions remained fairly fixed over time? It seems that the Progs are always redefining the definitions of the lower two classes in order to constantly prove how unfair the Patriarchy is to the so called downtrodden.