The prosperous middle class of the 1950s-60s was a direct result of WWII. After WWII, the United States had 4% of the world's population and 70% of the intact manufacturing and transportation infrastructure because all the other major industrialized countries (Germany, Japan, Russia, Poland, etc.) had been decimated in the war. For about 20 years, while everybody else caught up, the United States was the major producer of products in a world with rapidly expanding demand. Worldwide demand for US products drove up prices and workers' wages. By the mid-1960's the rest of the world had caught up. And by the 1980s-1990s China and India came into the picture. The decline of the middle class is largely a result of the rest of the world catching up with us and eliminating the advantage we gained in the aftermath of WWII.
Correctamundo! We've hastened our economic demise by (1) outsourcing jobs to boost the bottom line, and (2) trying to "hang onto" our former economic glory in the face of very stiff competition form Chindia, Latin countries. The economic "shift towards the West" to Asia was inevitable... but we hurt ourselves by speeding up the shift, not acknowledging it as a permanent, structural change... and overspending.... when we should have been scaling back and husbanding our resources.
The decline of the unions you mean. America is still surprisingly good at manufacturing -- just tilted towards higher end stuff. And in the 80s the transition began to a service oriented economy. The real trouble is 1) the leverage piled on over the past 25 years, and 2) the parasitic expansion of a self-serving financial sector. Grantham has good stuff on this.
Unions SHOULD decline... SHOULD BE ABOLISHED! They are little more than legalized extortion.... parasitic blood suckers... even more so for Public Employee Unions. Reagan's firing of all PATCO members was a great thing.... too bad it didn't catch on throughout the USA.
They served a purpose in their original incarnation and then grew bloated and corrupt over time, just as any self-interested power structure will without vigilance built into the culture.
http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf For the purposes of that study (Page 19), the income cutoff for Top 1% in 1996 was $284,603. Do you really think that this type of income is considered to be rich by those who subscribe to the notion that the rich continue to get richer? Secondly, the page 8 of that same study clearly states, that the top income groups often include a large share of individuals whose income is only temporarily high. Put differently, more than half of the households in the top 1% in 2005 were not there nine years earlier. The only thing that study illustrates is the hierarchical nature of the wage distribution (there are less jobs that come with higher wages) and the natural increase in wages associated with career growth due to passage of time. In other words, some people's careers grow and they make more money, some don't. Given the finite number of positions that pay wages as broken down by quintiles, some of them would be occupied by some people who made less money before the promotion. If one considers the meaning of being rich as based on the assets as opposed to the taxable income - the rich are getting richer.
And the sun rises in the East... the natural order of things. So... you think "that's not fair"? You're jealous of the success of others? Why don't you do what's required to become one of the rich? If you did, you'd have a different view of things. ANYBODY IN AMERICA CAN BECOME RICH... IF THEY ARE WILLING AND ABLE TO DO WHAT'S REQUIRED!!
$284k in 1996 is equivalent to around $400k today from inflation. A person with that income falls squarely in the highest income tax bracket in the country. Uncle Sam clearly considers these people to be rich. Liberals are constantly calling for higher taxes on the rich "because they can afford them." And by the rich, they are referring to the people in the top income brackets. So the answer to your question is yes. So? You're ignoring the top 5%. How about the top 10%? Top 20%? The same trend exists in every case. And these aren't all due to "temporarily high incomes." As for the rich becoming wealthier in assets, I would be interested in seeing your evidence of that. Regardless though, it's not as relevant, since the issue here is progressive income taxes and their effects on wealth accumulation.