Poor Vs Middle Class Vs Rich in America

Every other country in this world is stratified into layers of social classes. Whether you live in developing countries or developed world you fall under a social class.

In this article we look at one particular country called United States of America. USA is still largest economy in the world and it impacts the world economy at large.

In this article we look class system in America, average income divided among classes, inequality, its reasons and finally impact of this on the political landscape.

Class System in America

Before we know about America’s poor, middle class and rich we should take a look at America’s class system first.

poor rich & middle class

To be honest America has an insane class system.

You can divide them into five categories. Here is each one of them in great details.

1. Top Tier: Super Rich: Super Rich are 1% of the population and they are millionaires whose monthly income exceeds $300,000. They are executives, lawyers, doctors and people from Ivy League.

2. Second Tier: Rich: They are also rich but not as rich as Super Rich. Second tier rich are just 5% to 6% of the American population. Their monthly income could be well over $50,000. They do have a college degree.

3. Middle Tier: Middle Class: Then comes the middle class which is the backbone of the social order. They are over 45% and make $60K to $75K per year.

They may or may not have a college degree.

4. Middle Tier: Working Class: Working class or Lower middle class is the 4th class in the social order. Working class is about 40% of the population.

A man from this class earns $30k to $40k per month and a woman makes $20k to $25k per month. They are just high school graduate.

5. Bottom Tier: The Poor: Poor are at the bottom of the pyramid and they constitutes 12% to 15% of the population.

They may live below the poverty line with a yearly income of just $18k to $20k.

In recent years there is another class that has emerged, it is corporate elites. They are on the top of the food chain and very few in numbers.

They aren’t millionaires but multi billionaires.

So these are the classes in America.

Wealth Gap between Middle Class and Rich

Let us see the wealth gap.

The Average Upper Income = $650K

The Average Middle Income = $95K

You can see the difference and it is growing each year.

Average Upper Income increased from $590K in previous year to $650K this year, so an increment of around $60K.

However, the Middle income has remained steady and not increased the way upper income had.

The middle income in America is now around $55k to $60K and it is further declining.

Who is to Blame?

So the data clearly tells about the widening gap between rich and the middle class. Poor are the worst.

Who is to blame for all of this?

Well! It depends upon which side you are on. Left blames the right and right blames the left.

And this is the exact problem.

Economic System: Capitalism or Socialism

American is a capitalist country that believes in free market and free trade. But some on the left believe this is the exact reason for the inequality in the country.

Rich are not paying taxes and the system is created in a way that it helps rich to get richer. Whether you take bailout or tax breaks etc.

On the other hand the right believes its socialist policies like extra spending on social sectors, taxing rich, regulations etc is responsible for widening income gap.

Both sides have points but you can’t fix the problem unless we find a middle ground.

Inequality can grow in either of the two economic systems.

Immigration

Another reason blamed for inequality is immigration. In fact immigration is the main issue of the Republican Party.

There argument is immigration drives the wages down hence increased poverty.

On the hand liberals do not believe this; in fact on the contrary they say immigration is good for the economy.

Globalization

The real reason why middle class in America is not doing well is Globalization. Now a company can make same product incurring lower cost in rest of the world but not in America.

So they are shifting their plants to countries like Mexico and China. And that creates unemployment hence decline in wages for middle class in America.

How Poor Vs Middle Class Vs Rich Income Divide Affecting Politics

This is very important. How the income inequality in America is affecting its culture and politics.

Just look current presidential race. I will name two candidates Bernie Sanders and Donald Trump.

Both are outsiders, one is from far left and other is from far right. Why people in this country are going for these two extremes?

The answer is quite simple, people are fed up with the government. They don’t bother ideologies left or right anymore. They are looking for a candidate who is just honest. So they go for either Bernie or Donald.

Both of their supporters are from working blue collared folks and not the rich.

America Compared to Rest of the World

How America is doing compared to rest of the developed world.

As far as inequality goes it is worst compared to Scandinavian countries, even worse than Germany.

However when it comes to China and other developing world USA is still better.

But the real problem is wages of blue collared workers. It is a fact that wages are coming down for blue collared workers in America.

While the rich are becoming richer in this country however on the other hand middle class is shrinking rapidly.

What is the Future?

I will conclude by saying future is not really great because the inequality is going to rise and middle class income will continue to shrink.

Reasons are simple. Companies are able to find cheap labor in other countries and they will continue to outsource their jobs.

Moreover government is also not interested because they too are in control of big businesses or lousy bureaucracy.

36 COMMENTS

  1. our values in america must change,we must start to prioritize people , environment and truth in education over wealth ! in order to do this we have to change how we think ,all of the dividers that have been placed by the rich and the corporations must be removed and we have to look at all citizens as equal . When we do this we will be able to reorganize our society for the betterment of all.Now a large group of Americans do realize that our governance system needs to be changed , but sadly to say at this time it is not enough of us to do that in a peaceful and intelligent manner. We will change the way America is governed and it will take maybe a century to do so. The rulers of America are the same families that ruled the world before it was established .All is not lost or hopeless , voting wont change anything because the system is corrupt and when new people are added to the system they either play ball or get disgraced through the media. The minds of the people must be awaken to the fact that we have lost control of our beloved country .We have to stop contributing to this government as best we can and have no doubt they will lock you up for not paying taxes. but you can stop voting and start talking about a new system of governance to your neighbors and friends and these grass root ideas will one day become our reality. No killings , bombing or destroying our beautiful country needs to take place just changing of the minds in due time…….god speed

  2. I believe your numbers are not correct. How are the Middle Tier: Middle Class: “make $60K to $75K per year.”
    The Middle Tier: Working Class: Middle Class: “earns $30k to $40k per month and a woman makes $20k to $25k per month” which equals to $360K to 480K per year.

    So you are saying that the middle tier “working class” makes more than the Middle Class? or is it a typo?

    Thank you
    Ben Amor

  3. The numbers outlined in this article are complete bullshit. The top 1% make $450K “per year” NOT $300K “PER MONTH”.

  4. the rich being better than the poor or vice versa is horse bananas. remember we all came from the same god regardless of what status you are. you come in with nothing you go out with nothing put that in your pipe and smoke it gary

  5. That’s a funny way of breaking things down into different classes/tiers… Thing is I don’t know where you’d put someone like me on that scale, despite being 100% American… My income is under 20k a year, yet I am Financially Independent so I don’t work–but on the other hand, my Net Worth is well over 1 million dollars!
    Some would put me in the top 4%–but people judge one another by what they drive, what they wear, where they live, and of course their Income.
    I’m a true oddball.

    The economic problems in this country, and the fall of the Middle Class, are largely due to the evils of Capitalism and the level it’s reached in 21st Century America. Or to put it another way, I’d simply use the term Ignorance or Stupidity. The American people are thoroughly bombarded with and brainwashed by commercials 24-7-365. The commercials Compel them to buy, buy, buy. Anything and everything. They are programmed to keep up with fashion, trends, fads, and in short the latest and greatest of Everything! Second best will never do, and furthermore they have to have it NOW even if they can’t afford it. Otherwise they’ll feel inadequate, second-rate, or some other contrived fear will be factored in. If they only knew how to Save money and better yet invest a bit of it, they would not be broke or homeless or externalizing their problems like blaming the economy, the president, the government, immigrants, god, the devil or Whatever!

    I got to where I am today by being a cheapskate who relied on Logical thinking rather than instant gratification Emotional thinking. I always lived below my means, was always conscious of my money and always questioned whether I actually Needed to buy something.

    America is the country where homeless people Buy Bottled Water despite having access to Free drinkable water!

  6. I completely agree with you on the situation plaguing America. Inequality started with NAFTA and all the other trade agreements that took the jobs away from millions of Americans over the past thirty years. I believe in fair trade, but we emptied the bread basket here while feeding the rest of the world. I am fifty years old and beyond disgusted with current events in this country. It breaks my heart that there are so many people out there that work there ass off and still can’t pay rent at the end of the month. When the housing market went crazy back in early 2000 and the banks were handing out loans like crazy to anyone that signed the dotted line the prices of houses were artificially inflated along with rents from assessors offices around the country. When the scam broke open in 2007 and housing prices dropped dramatically the rent prices that were artificially inflated stayed the same and have just climbed higher. I live in the I-495 corridor and I pay 1125.00 a month for a two bedroom that includes no utilities and that is a good deal for around here. Before the rents were artificially inflated this apartment went for $600.00 a month and the rent was doubled over night. The scam went global because everyone in office went for the ride and earned as much money that they could fully knowing that the bubble was going to collapse.. In 2002, I refused to take out a loan for a house fully knowing just how evil the banks were acting. No income verification loans is free money from the devil himself. I knew the collapse was going to be devastating and when it happened in 2007 everyone was devastated. I am a wife, mother, individual with an associated degree in science and if I saw what was coming in 2003, how many people closed there eyes to what was happening in this country off of the backs of millions of people. The balloon interest rates that were part of all of the loans was so financially devastating to millions of Americans that the foreclosures are still sitting empty everywhere to this day. My generation has been truly screwed by the establishment in every way.

  7. So we the people what are we going to do about this dilemma. Seems to me there is still a lot of racism in the world of today. Because most of the rich is white people and the middle class and poor are black people. Whites been living so well for so many years at least 500 years plus and blacks have to suffer for everyone. I think it is time for the blacks to live good and in power for a change it is only fair to the people of America. I could be wrong about the whole thing but I feel not and just being real about it.

  8. the rich will c0ntinue to be richer, because they know what it takes to remain rich and get even richer.on the other hand the poor keep doing the things that make them poor and get poor in the process.habits like too much television,too much irrelavant talk and spending money instead of investing it.as it is ,the rich will continue to rule over the poor…

    • This is nothing to do with rich or poor rather access to government. The top corporations own seats in the white House. Who represents for you. When your elected official can’t talk because of lobbying groups. Time to ban lobbying and Election contribution. Buying election is Fraud. It’s not fair game when your voice isn’t heard.

  9. its agreeable that globalization has created poverty in America due to the fact that most companies outsource for services outside the country thus raising the unemployment rate . my suggestion towards cubing this dilemma ‘poverty’ is ‘THE NEED FOR A COHERENT POLICY ON ALL FRONTS”

    What this means here again is that social welfare needs a coherent framework that should be articulated with the job market. These two aspects (welfare & jobs) do not by any means work independently, they constantly influence the people. So why think you have to choose? Work on both!

    The strategy to tackle poverty in the United States has often relied on an incentive system: the incentive to work. But without higher pay or greater work benefits this strategy never really worked because since the 1970s wages of the low class have been going down due to globalization (that pushed wages down for the less educated). Even if they do work full-time, it’s sometimes not enough anymore, and now the economic crisis shows the limits of this strategy. A complete overhaul of the job market is needed, which would help as well fight consumer indebtedness.

  10. change isfundamental right of nature . donot worry about future , good days are comming for poor .they will definitely come up. so far as my knowledge is concern upliftment of all are possible due critical thinkeing development of human being.

    regards
    dilip das

  11. IN every Decade people are divided on some criteria or some basis it can be change according to their circumstance they live. western country people are divided on the basis on money .In eastern countries they divide on the basis of caste I.e on the basis of their work they do.The main thing is that both don’t able to completely remove misery from our society.Both system have their good and bad.Its we the people who have to take the good or bad.Both are important as they both minimize misery and bring prosperity at some extent.if whole world become happy then their no need of happiness or importance of it.so misery is as well as important to remind us that if there is happiness then their is sadness or vice versa.

  12. Being on the honest side, I agree that the rich are getter richer and the poor are getting poorer. Does it mean the future is not on the bright side? for example who ever is rich now will be rich for the rest of their lives +family generation, and whoever is poo or in their middle class will be stuck there for the rest of their lives?

  13. There are mass number of unemployment exist. Due to of these many are dying in hunger mostly kids of 2 to 12 years. Govt. should takes initiative in these issues by way of providing good packages only supplying to flood victims are not as enogh. Every citizen be saood up beside Poor fellows. JAI HIND. BHARAT MATA NO JAI.

  14. money will ever be the only difference between the poor, middle and rich classes,if anyone care enough to boarder about it the should look into how thier money is been earned and not who is rich and who is not not.begining from understanding the principles of money and all that good suff.The rich will continue to be rich because they always do what will make them rich.it speaks for itself….

  15. government is take interest in Poor and Middle Class people yearly income and launch new law to destroy inequality

  16. middle middle
    class is the one who suffers the most..and nothing gonna change the condition of middle case..It was, It is nd it’ll remain same

  17. Term “Equality” is nothing but Utopia. People in power i.e. bureaucrats, corporate and politicians subjugate the weaker section of society to fulfill there aims. It’s nothing new to World Dark age, Colonization are proof to my above statement. A boundary never restricts inequality but breeds it.

  18. It’s not only in the US also in other countries because of poor governance. Rich or Elite group of people are more upgrading in their living status. A contagious disease spreading up in our Industry. Poor people are graving economically.

  19. I think your tiers are not calibrated enough to be useful. If ‘upper class’ is defined by making 125k+, and the number in circulation this week is that it takes 130k to live what was in the past considered to be a middle class lifestyle (e.g., stable housing, savings, health insurance, regular vacations, retirement) – and only if you live outside a major city (the very places it’s least unlikely where you might score a 130k+ salary), how does this really make sense?

    People can afford the gadgets and some of the trappings of a middle class lifestyle pretty easily, thanks to lower relative costs for goods. That doesn’t mean they are middle class.

  20. i think the American govt need to look into their tax system,becouse as it is now the tax system seems to favour the rich than poor.

    • I seen both sides of the us tax system and it favors the rich and the poor over the middle class and workers. The rich always are able to find ways to avoid or lower the rightful percentage of tax they should pay. The poor get government benefits and pay very little tax and when income tax day come around they get 10 times the money they paid in income tax back. All the while the people working their butts off aka the middle class look at their w2’s and when you add up the ssi and Medicare with income taxes they see nearly 40% of their money taken and never seen again!! Don’t get even started on the ” affordable healthcare act” !I know I have siblings on welfare they live better than I do and every year got 5 to 8 grand back on their taxes while I was lucky to owe or be owed around 50 bucks every year.

  21. nowadays, eventhough the gov’t had said that they are trying to abolish this gap but the things is that they will not be able as seeing whats happening. Rich become richer and richer and poor become poorer and poorer. some rich dominate who is poor,

  22. I am surprised at the classification . In India most of the population is below poverty line. There is a need to have a minimum wage system like the Americans have. Due to severe added financial pressures and illiteracy people of India are still exploited. More than 40% of Indian population is youth and the youth is not properly educated or paid adequately which gives rise to crime. Hoping the Modi governmwnt does some constructive work towards this grave cause so that the future generations have hope for a more secured life.

  23. Respected sir/ madam

    You are right,but like your link is supported to like our poor class as well as middle class also, I am lower class…,
    That’s why I want job to do something…. Plz I beg I give me work from home job

  24. According to me they should decrease the globalisation as that is increasing the unemployment that leads to more poverty and the middle class people are suffering more.. also when it comes to inequality again the same reason because rich people are not facing problem as the middle class people…

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