Why 1/2 of Americans Can Be Considered as ‘High Income’
The American middle class, once considered the poster boy for ambition, is feeling worn and tattered. Stagnant wages, rising living costs, and an overall sluggish economy have been hurling optimism to the wind for years. Yet a silver lining can be found, so long as you compare Americans to everyone else in the world.
If wealth is relative, Americans should look overseas for a confidence boost. According to a new analysis from Pew Research Center, 56% of Americans are in the world’s high-income group, living on more than $50 per day, compared to only 7% of the global population. Another 32% of Americans are upper-middle income, living on $20.01 to $50 per day. The analysis includes 111 countries accounting for 88% of the global population, and uses data from 2011, the latest year that could be analyzed.
“Only 7% of people in the U.S. were middle income, 3% were low income and 2% were poor. Compare that with the rest of the world, where 13% of people globally could be considered middle income in 2011,” said Rakesh Kochhar, associate director of research at Pew Research Center. “Most people in the world were either low income (56%) or poor (15%), and relatively few were upper-middle income (9%) or high income (7%). This is not to say that the U.S., along with other advanced economies, does not struggle with issues of income inequality and poverty. But given the much higher standard of living in the U.S., what is considered poor here is a level of income still not available to most people globally.”
While it may seem unreasonable to compare our standard of living to other regions of the world to find a silver lining, North America holds up quite well when compared to Europe, the other economic powerhouse found on the map. Despite Europe showing more economic progress during the 2000s, North America holds the title of being the highest income region in the world. Together, North America and Europe account for 87% of the global high-income population. Nonetheless, America still has her problems.
A decade earlier, North America and Europe accounted for 91% of the world’s high-income people. The 4% decline may not seem significant now, but the world is changing. The biggest growth in middle-income earners is taking place in China, South America, and Eastern Europe. For example, 203 million people in China crossed the middle-income threshold of $10 per day from 2001 to 2011. Norway, Luxembourg, the Netherlands, Iceland, Finland, and Canada all lagged behind America in 2001, in regard to high-income populations, but surpassed America by 2011.
Perhaps the most concerning aspect of American living is the lack of enthusiasm for the future. In a recent survey by the MacArthur Foundation, the overwhelming majority of Americans think it’s harder for young people to achieve a middle-class lifestyle, which includes saving for retirement, owning a home, holding a decent-paying job, or having a stable and affordable housing situation. Four in five Americans believe it is more likely for middle-class people to fall into a lower economic class than for people in lower economic classes to rise up to the middle class.
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