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5/11/16, "From coast to coast, middle-class communities are shrinking," LA Times, Don Lee
"America's shrinking middle class, a growing concern for the economy
and a central issue in the presidential race, cuts across virtually all
communities from coast to coast, according to a study released
Wednesday.
The report by Pew Research Center found that the share
of the middle class fell in 203 of the 229 U.S. metropolitan areas
examined from 2000 to 2014, including major cities such as New York, Los
Angeles and Chicago,
which saw a relatively sharp drop in its middle
class.
For many areas, a big culprit in the declining middle was the
falloff in manufacturing jobs during that 14-year period, when factories
shed about 5 million workers from their payrolls nationally.
"The
10 metropolitan areas with the greatest losses in economic status from
2000 to 2014 have one thing in common — a greater than average reliance
on manufacturing," the Pew report said, referring to places such as
Detroit;
Rockford, Ill.;
Springfield, Ohio; and the
Hickory-Lenoir-Morganton area in North Carolina.
The news was not all downcast, especially for metro areas in coastal
and border regions that have benefited from the boom in technology,
trade and resources.
In California, even as 22 of the 26
metropolitan areas experienced a thinning middle class between 2000 and
2014, most of those same areas saw a net gain in distribution of income,
meaning the share of the upper-income tier increased more than the
lower-income group.
"It absolutely is an East-West phenomenon,"
said Stephen Levy, director of the Center for Continuing Study of the
California Economy, noting that coastal areas generally are blessed with
higher-wage industries like high-tech, and more favorable demographics,
such as a highly educated workforce.
Both the San Francisco and
Sacramento areas, for example, showed a significant hollowing of the
middle in the Pew study, but Sacramento's was due largely to more people
dropping down to the lower-income tier whereas San Francisco's
reflected sharp increases in households in the higher-income group.
Pew
reported late last year that the middle class no longer constituted a
majority on a nationwide basis. In 1971, 61% of adults were in
middle-income households, but that had fallen steadily to just a hair
below 50% last year, Pew said.
Many experts regard a shrinking
middle class as worrisome for economic and social stability, and the
issue -- along with a related trend of skewed gains among the nation's
richest -- is seen as a major factor in the anger and resentment
displayed by voters during recent primaries that have fueled the
campaigns of Donald Trump, the presumptive Republican nominee, and on
the Democratic side, Bernie Sanders.
In general, Pew found that areas with a larger middle class tended to have a smaller degree of income inequality.
"The
deeper root at what is driving inequality and really hollowing out the
middle class -- that is a pattern very strong in the metro areas," said
Rakesh Kochhar, associate director of the Pew Research Center. "It is
cutting across all communities. No one seems immune to this widening
inequality trend."
As in Pew's previous study, the latest research
defined middle class as households earning two-thirds to twice the
national median income, after adjusting for household size. The new
report took into account differences in a metro area's cost of living.
So in the Los Angeles-Orange County metro area, a household of three
would be considered middle income if its total annual income ranged from
$49,011 to $147,036.
For most metro areas, Pew found, the middle
class accounted for 50% to 55% of the adult population in 2014, although
it was much smaller for big metro areas such as Los Angeles. The share
of its middle class in 2014 was 46.5%, little changed from 2000.
The
areas in the nation with the largest middle class were mostly in the
Midwest, with 4 of the top 10 in Wisconsin, including Wausau, where
67% of the adults were in middle-income households.
Nationally, a
household of three making less than $42,000 in 2014 fell into the
lower-income tier, while a household with earnings above $125,000 was
considered part of the upper tier.
Midland, Texas, had the largest
share of its population in the upper-income tier, at 37%, although the
oil-bust in the last two years has likely lowered that figure. Most of
the remaining metro areas with the highest share of upper-income adults
were in the East, among them Boston, Washington, D.C., and the
Bridgeport-Stamford area of Connecticut. The San Jose and San Francisco
areas also were in the top 10, with 31% and 28% of their population,
respectively, in the upper-income group.
Urban areas in Texas,
California and the Southwest dominated the top 10 areas with the highest
share of lower-income population. Laredo and Brownsville, both in
Texas, topped the list with 47% of their adults in the lower-income
group,
followed by the Visalia area in California's San Jaoquin Valley,
with 46%."...
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