Pew: US Middle Class Is Losing Ground

By Hunter Wallace

The Pew Research Center has a massive new study out which shows the US middle class is losing ground:

“After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point, according to a new Pew Research Center analysis of government data …

Fully 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. The share accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.

And middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.”

The Pew study doesn’t hazard to guess why the American middle class has shrunk in relative size in every consecutive decade since 1971. I believe, however, that I have found the answer:

“When and how did the free-traders capture America?

If one year could mark their decisive victory, it would be 1934, with the passage of the Reciprocal Trade Agreements Act. And if one year could be cited as the inauguration of the free-trade era, it would be 1967, with completion of the Kennedy Round of trade negotiations.”

The Kennedy Round of GATT was the fateful moment when America leapt off the cliff and went full retard on free-trade:

“In 1967 America arrived at the final crossroad. The Kennedy Round of trade negotiations under GATT was stalled. Europeans were balking at U.S. demands to further open their markets to American agriculture; Japan had given a flat no to greater market access. Fear gripped Washington. The talks were on the verge of collapse.

The U.S. trade negotiators went to see President Lyndon Johnson. Failure to end the Kennedy Round successfully, they warned, would return global trade to “jungle warfare,” risk “spiraling protectionism” in the United States, and “encourages strong forces now at work to male the [European Common Market] into an isolationist, anti-U.S. bloc, while, at the same time, further alienating the poor countries.” If America did not make the necessary concessions, disaster was certain.

Again the United States capitulated; and Commerce Secretary Alexander Trowbridge rejoiced.”

Buchanan continues:

“LBJ crushed the uprising with a flat declaration. No quota bill will “become law as long as I am president and can help it.” By the end of the sixties, early returns from the Kennedy Round were coming in. America had entered a new era”

He quotes trade historian Alfred E. Eckes, Jr.:

“Viewed from a historical perspective, the Kennedy Round marked a watershed. In each of the seventy-four years from 1893 to 1967 the United States ran a merchandise trade surplus (exports of good exceeded imports). During the 1968-72 implementation period for Kennedy Round concessions, the U.S. trade surplus vanished and a sizeable deficit emerged. For twenty of the next twenty-two years, the United States experienced merchandise trade deficits – as much as $160 billion in 1987.”

Buchanan explains what happened next after the Kennedy Round was implemented from 1968 to 1972:

“The Kennedy Round tore down the levees, and floods of imports poured in from low-wage nations. With the tariff collapsed, American companies had a powerful incentive to relocate factories abroad, to take advantage of the low-wage labor and then export back to the United States. Journalists were soon writing excitedly about the Japanese “miracle” and the “tigers” of Asia – Singapore, Hong Kong, Taiwan, South Korea. Few asked at whose expense this sudden Asian prosperity had come.

One after another of the great U.S. industries began to decline, depart, or die. The radio- and television-manufacturing industries disappeared. The antifriction-bearings industry and machine-tool industry were gutted. The mighty auto industry was ravaged. Five years after the Kennedy Round, foreign penetration of the U.S. auto market had doubled, to 16 percent. But in Europe and Japan, internal tariffs, targeted at American-made cars, kept U.S. exports from making comparable gains.”

Back to trade historian Alfred E. Eckes, Jr.:

“In the twenty years after 1970 the opportunities Kennedy foresaw vanished for high-paid but relatively low-skilled U.S. workers. From 1972 to 1992 the United States created 44 million net jobs – particularly in services and government. However, America generated no net jobs in internationally traded industries. Japan and many of the other rapidly industrializing powers – Taiwan, South Korea, and Brazil among others – enjoyed rapid economic growth, not because they practiced free trade at home, but because they enjoyed access to the open American market. Like nineteenth-century America, they practiced protectionism at home while America’s generous market-opening policies provided boutiful export opportunities. Paul Bairoch noted the lesson: “Those who don’t obey the rules win.”

With the sole exceptions of 1973 and 1975, the US has ran a trade deficit with foreign countries since 1971, 42 out of the last 44 years of the free-trade era. Isn’t that an amazing coincidence?

Of course there were many other things going on in the US in 1971 that also contributed to this turning point: the most important being the great tidal wave of Third World immigration that followed the Immigration Act of 1965, the end of the Bretton Woods system after Nixon floated the dollar, the decimation of organized labor in the 1970s and 1980s, and Ronald Reagan’s changes to the tax code.

Note: The excerpts above come from Pat Buchanan’s book The Great Betrayal which was published in 1998.

From the Pew study:

“Overall, the economic stagnation that has characterized this century so far has set the welfare of households back by at least 15 years. For upper-income households, the median income in 2014 was comparable to its level in 1998. The median for middle-income households in 2014 is similar to its level in 1997, and for lower-income households the median income has retreated to its level in 1996.”

Incredible.

After Bush and Obama, the median household income in 2015 is comparable to its level in 1998, 1997, and 1996 for the wealthy, the middle class, and the poor respectively. Economically speaking, it is like the 21st century never happened after two presidents, a Republican and Democrat, who were equally committed to free-trade and open borders.

About Hunter Wallace 9619 Articles
Founder and Editor-in-Chief of Occidental Dissent

20 Comments

  1. As a longtime reader, I think this is unquestionably some of the most valuable work you’ve done. If you’re going to write a book on this subject and need a publisher, maybe Arktos or whoever publishes Jared Taylor will do it. I think Robert Lindsey edits Taylor’s books.

  2. >>In this study, which examines the changing size, demographic composition and economic fortunes of the American middle class, “middle-income” Americans are defined as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three.<<

    So the "middle class" is people that make 2/3 to double what the real middle income people make…. Commies are right on this one, the "middle class" doesn't exist. Classes are defined by one's relationship to means of production/labor, not fiat numerology.

  3. Wasn’t the historical norm something like .9% upper 9% middle 90% lower?

    As in the actual “middle class” is the 14% types who live comfortably?

    I think some type of qualitative division is needed: do you have to work? You are not upper class. Are you unable to sustain a mortgage or own your own home? You are not middle class. Can you live off of your investment income? You are upper class. Do you have employees? You are not lower class, etc.

    Three classes may not be enough.

  4. I do hope you write a book. You’ve gone over so much here already. Not that it will be easy but the raw material is already there.

  5. Hunter, this is an absolutely brilliant and important post, which impacts hugely on both black and white economic stagnation. Blame the cursed 1960s, again? You bet!

  6. “Commies are right on this one, the “middle class” doesn’t exist. Classes are defined by one’s relationship to means of production/labor, not fiat numerology.”

    Having a large middle class is the solution to class divisions – hence why commies hate it as much as the oligarchs.

  7. “… Republican and Democrat … equally committed to free-trade and open borders.” Free-trade, open borders, anti-White affirmative action, and support for Israel — the Big Four of US politics. Free-trade is really anti-White fraud trade (one-way free-trade). Open borders are really open for non-Whites and mostly closed for Whites (one-way open borders). Billionaires are parasites who are making as much hay as possible before the darkness closes the hay-making.
    There is a political monopoly with two main brands on the market. Yidberals are the welfare brand, neocohens are the warfare brand, and both are Israel lobby brands.
    “The 100 biggest donors of 2014 gave nearly $174 million to Democrats, compared to more than $140 million to Republicans … Donors who gave mostly or exclusively to Democrats held down 52 of the top 100 spots …”
    http://www.politico.com/story/2015/01/blue-billionaires-on-top-114151
    Whites need to understand the situation and unite in self-defense.

  8. Sir,

    As I understand it, in 1945, this country manufactured 44% of it’s own goods.

    Today. that is less than 10%.

    How could the middle class survive in such a circumstance.

    It’s amazing we are not more 3rd World than we are.

    The Constitution calls on the government to protect American business, and I’ll be hickory-switched if I can see how that has been done.

    We been NAFTAed to death – and now they want to TPP and Global-Warming Confederence what’s left of our cadaver.

    Sir : how is it possible to see the government in Washington, as anything less than the greatest opponent a non-welfare receiving Southerner has?

  9. Nice, but I seem to recall a much, much older piece of some decades gone, where the standard of living in the US took an initial nosedive around 1974-5 or so. Ain’t slowed, no. The recession continues…

  10. Junius,

    In 1929, the US had 42.2 percent of WORLD manufacturing capacity compared to Germany (11.6), Britain, (9.4), France (6.6), the Soviet Union (4.3) and Japan (2.5). I will look up the numbers, but I am pretty sure we were far more autarkic than that.

  11. @Mr. Griffin…

    Those are incredible numbers!

    I would wager that today’s numbers demonstrate, to a nauseating extent, the betrayal of this country, since WWII, by it’s oligarchs & politicians.

    Now, I’m going on a idyllick country ride with my wife, and we will end up shopping in Rocky Mount. There we will revel in the yuletide spirit and try to ignore those, in our midst, following Sharia law, with their birkhas up top – they potent reminders of Our South being a conquered country.

    Best to you and your wife.

    • Buchanan makes a key point here:

      “Manufacturing is the key to national power. Not only does it pay for than service industries but the rates of productivity growth are higher and the potential of new industry arising is far greater. From radio came television; from television, VCRs and flat-panel screens. From adding machines came calculators and computers. From the electric typewriter came the word processor. Research and development follows manufacturing.”

  12. Marxists reduce EVERYTHING to money. It’s not about money, fundamentally. It’s about what type of civilization we create. Money is a symbol for the ability to acquire goods and services. There are many ways to do this. “Money” is extremely useful – but the Ultimate Guiding Principle must be “What do you want the world to look like, when you step outside? What and what do you want to see”?

    Whites create wealth – beautiful things, technological development, etc. Others Races do as well, to varying degrees – so don’t WORRY about that.

    That Cardone guym in the video – he looks like a White man. “Cardone” is Italian/Latinate. The Truth Bomb HE drops is at the very end of the segment. It’s not about the “middle class being gone”. “Wealth” – in his case, “money” is relative to the ability to acquire goods and services. We’re really, really good at making things. His real Truth Bomb is about himself – he resents his own living space, but “owns” houses that he rents out. He’s rootless, He is not a part of a Community. His only investment in anything is his ability to generate money symbols for himself. He embodies pathological self-ish-ness. He’s PURE evil.

    I don’t want him in MY world.

  13. If its not good for White people its unAmerican. I only care about White people. Anyone else has two choices, leave or be removed. Capitalism and Communism are just rat plagues that need killing.

  14. Has anyone considered the racial component to these numbers? How much has the middle class shrinkage is due to the number of non whites living in the US? Take out the increase in the number of blacks and poor 3rd world immigrants and what would the number of middle class look like? Also notice that the number of people who have gone from middle to upper class has increased. Should this be considered a bad thing?

  15. I read Adam Smith’s “Wealth of Nations” way back there somewhere. And one thing that really struck me was where he said that no nation ever got wealthy without manufacturing, that that’s how they did it. And he specifically mentioned Egypt, Greece and Rome. We somehow don’t usually think of the ancients as manufacturers. But people needed clothing, furniture, tools, weapons, and what not, unless they were living like animals. And manufacturers could trade for other cool stuff. Come to think of it, “manu” is the ablative (instrumental case) of “mano” (h,and), and “facare” (to make or to do, from which we get “fact” [= done), is the base of the “facture” part of the word; it was stuff made by hand, or handiworks; we just applied machinery to it. But I think Smith was onto something.

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