Can you imagine a time when only 16 percent of the residents in American cities are middle class with the rest of their inhabitants equally split between those with high and low incomes? New York City’s mayor doesn’t have to wait for that to happen because those economic divisions already exist there: 43 percent of his residents are at the high end of the economic scale and 41 percent live at the bottom. The rest — 16 percent — are middle class.
But that’s just the Big Apple, right? No. Miami sandwiches its 19 percent middle- income workers between its well off (42 percent) and its not-so-tony set (40 percent). West Coast capital Los Angeles is earning its title as “The City of Angels” by providing a heavenly backdrop for at least 42 percent of its residents with high incomes. However, they have to share the stage with the city’s 40 percent low-income earners and 17 percent middle class.
But, the middle class isn’t just shrinking in big cities. Its decline is evident in all metropolitan neighborhoods, where in 1970, 58 percent were middle-income communities versus 41 percent by 2000, according to a study published in June by the Washington-based Brookings Institute. Brookings analyzed 30 years of census data for families and neighborhoods in the 100 largest metropolitan areas, and in 12 metropolitan cities and suburbs.
Brookings found fewer middle-income families in metropolitan areas today (28 percent in 1970 versus 22 percent in 2000), which explains some of the shift, but so does dramatically increasing housing prices in many areas, especially in larger cities such as New York, which has been experiencing a building boom. However, New Yorkers with median household incomes (about $40,000) have about 20 percent fewer apartments to choose from than in 2002, according to New York University researchers.
Although the suburbs have always been a middle-class haven, its percentage there is declining, too. Brookings noted that between 1970 and 2000, the number of middle class residents living in the 12 suburban communities they studied declined from 64 to 44 percent — only to be replaced by roughly equal numbers of high income and low income families.
In a departure from his recent predecessors, Treasury Secretary Henry Paulson acknowledged the economic problems faced by the middle class in a speech late last month. “Amid this country’s strong economic expansion, many Americans simply aren’t feeling the benefits,” he said. And no wonder. From 1962 to 1966, real private sector wages rose 27.5 percent. During the five-years ending in 1996, private wages grew 11.3 percent. From 2001 to 2005, private sector wages rose just 2.7 percent. By the way, last year, the number of millionaires in the country grew by 11 percent to 8.3 million households.
Americans’ opportunity to more easily move up the economic ladder distinguishes us from most of the world. But, if we are creating a society that encourages the rich to get richer while allowing the middle class to decline, we won’t have to worry about running out of oil because without a strong middle class, the engine that powers the viability of American communities will be running out of gas.