Welcome to Stuff You should Know, a production of iHeartRadio.
Hey, and welcome to the podcast. I'm Josh and there's Chuck and Jerry's here to us sitting in for a good old fashioned stuff you should know episode.
That's right, not one of those new fangled ones.
No, no, not one of the new ones that are just like you know, all hair gel and yeah, you know, style, no substance.
It still has that new podcast episode smell.
Yes for sure. Speaking of new Smell, how do you feel being fifty five? Birthday boy?
New smell? You know, it's great. I think I have actual privileges now that come with it.
That age, like cheap coffee at McDonald's that kind of stuff.
Yeah, I don't know about McDonald's, but like I think I think I can play golf for a little cheaper now, like literally as this your rate, which is that's hysterical.
Yeah, well I think you can get an AARP membership now too.
Oh yeah, I mean you're probably already getting that stuff in the mail, right. They start early.
H No, I'm not even fifty yet. They won't let me. I keep applying and they keep denying.
Okay, maybe fifty. I mean they start sending in that stuff years ahead.
Yeah, we used to have when you had to get it for work or something like that. But they found out, you know, what our age is, and they got really mad.
They said, we've been spending sending things to spring chickens.
But yeah, well, let me know how the golf thing goes, and if you get cheap coffee at McDonald's, and what being a senior is like, Chuck, because you know, I think for me and Jerry and everybody, we just want to wish you a happy birthday.
I appreciate that.
People went bonkers on Instagram.
Oh yeah, was that you?
Yeah, of course.
I figured, you know what my uncle, My uncle wished you a happy birthday?
Did he on that post? I didn't see that.
Yeah, it's pretty funny. Then THO was a confusing series of texts where he was finally like, is it your birthday? It was like those a few days ago.
Sure, he said, who is this? Yeah exactly, he said, McGovern,
not mcguffin, no McGovern. Okay, all right, let's start talking, because we're talking about the middle class in America at least, although this definitely extends to other countries like the UK, some of the Nordic countries, Australia, there's not an obsession but a real like obsession with the middle class, how it's doing, how mobile it is, upwardly, downwardly, and there's it's essentially the middle class is like the thumbnail metric for the health, the real, true health of a society
and economy.
Would you agree, Yeah, I mean I think so. And I think that used to be a real like it's always been a talking point in the United States, but I think it used to be a real, genuine talking point, whereas now I think it's like, you know, are all the rich people doing great? Okay, all right, now let's talk publicly a little bit about the middle class, I guess right.
But not everybody's fallen for that. There's like this whole idea that the middle class and the health of the middle class was a canary in the coal mine. Yeah, and not only is the canary dead, it caught fire at some point as far as a lot of people are concerned about the United States middle class at least
because there's this idea that it's dead. But then if you read up a little further on it, you come across other people who are like, no, no, dude, look at these statistics, like the middle class is actually doing great, way better than they used to be doing, and other people are like that just doesn't quite add up. So when you get into it, it's really tough to define the middle class. And you can monkey around with who's middle class or who's not and come up with all
sorts of different profiles. But I think it just matters what people who would probably self identify as the middle class feel about the economy and about their prospects in life.
Yeah, for sure. Like what is that the vibe session? Yeah?
What was her name, Kyla Scanlon. She's a kind of a gen Z financial explanatory journalist. Yeah.
Yeah, so that's the idea of like sort of like not falling for being gas lit by everything you're being told about how great it's going. And there's something called a vibe session. Am I saying that?
Right?
Yeah?
Vibe session?
It just sounds weird because a vibe session sounds like, you know, something I do late on Friday nights.
Right, This is with a C instead of an S.
Yeah exactly, and it's much less ire. Yeah, oh man, But yeah, the idea of you know, various politicians, you know, whenever anyone's running for something talking about typically reelection, talking about how great everything really is, whereas everyone is like, yeah, but why doesn't it feel that way. That's a vibe session instead of like a true recession.
Yeah, and she was pointing out like that actually can become self fulfilling. Yeah, sure, because if enough people start feeling like, no, things aren't going so good, they start not spending money, and that actually can trigger a recession just from the fact that people feel that way, no matter what the metrics say. So, yeah, we'll talk about all that, but let's talk about the history of the middle class because it hasn't always been around.
Yeah, it's interesting if you look at, you know, the history of the middle class in the West. It generally you can point to late medieval Europe as you know, when things started to get cooking a little bit as far as the middle class goes, and you know, we'll walk you all the way through you know, modern times. But as cities became a thing, you know, all of a sudden, you needed a middle class to sort of administer what the aristocracy was asking for in a lot
of cases. Is so you know, there was this distinct group kind of created that wasn't aristocracy, and it wasn't the peasant class. And I think one word, and I believe they've eve been done a short stuff on the bourgeois, Yeah, didn't we?
Yeah, and what it means to be bourgeoisie. That's right, there's another word for him burgers too, and apparently both words. I don't I don't remember this, but I'm sure we talked about it in the bourgeois short stuff. That that's the name of the cities, the fortified cities where they worked, right or where they emerged from. Yeah, and the burger is that's why the burger Meister is called that in either Rudolph or Frosty or some rankin bass something like
the scary BG exactly. Yeah, Burgermeister means mayor so he's like the head of the city essentially. Anyway, those were the merchants, the bankers, professionals that emerged to kind of fill that space between the peasants and the aristocracy. And you could call them the first middle.
Class, yeah, sort of. But they grew in size and wealth and power, so they were kind of like, Hey, we tricked everybody. We're not really the middle class. We're I mean maybe upper middle class. Certainly obviously not aristocracy
because they weren't born into that. But as people got wealthier, there was kind of a true middle class that came after that, where you needed people to do things like bookkeeping and you know, kind of handled the business of the people that previously had said that they were the middle class, even though no one was using those terms, you know, we should point.
Out, right, no, nothing like that. There was also a lot of changes where before it was wealth and power, right because that's what nobility kind of based itself on. So the earliest middle class kind of based itself on those same markers. But thanks to the Renaissance and the Enlightenment, other markers kind of came along. The whole idea of thrift, of saving your money, of not being just frivolous with your money, that became a really big middle class social marker,
certain tastes, certain ways you would dress. And then of course wealth, wealth has always been a marker for the middle class, especially the upper middle class. But these were all like, all these things seemed so normal to us and so ingrained that it seems alien almost to kind of tease this stuff out and identify it historically.
Yeah, for sure. And this was you know, in Europe at the time when the United States was born. Olivia, by the way, did a great job with this article. I thought, uh, greed, she is a heck of a writer. So the United States was, you know, as she points out, kind of a sort of a bourgeois not a I wanted to say, project or a test an experiment, maybe
the American experiment. Yeah, because there were people like Thomas Jefferson who were very much believed like, hey, we're going to build this new country on and not on the backs of but like the middle class, these people that owned farms and could provide for their family and that own some land, like this is the American experiment, that like the goal that we're striving toward.
Yeah, and those yamen farmers were typically not slave holding. So his idea was to basically become a nation of self sufficient farmers growing food for their families and themselves and then selling some in the market. And that just is not how it went, because the wealthy landowners who had actually had slaves became essentially the power, the elite, the people actually pulling the levers, and eventually they except
in the Antebellum South. They kind of replaced that wealthy land owning and agriculture with industry as the Industrial Revolution started in Europe and then spread to the US, and then we had a real disparity in power and wealth growing.
Yeah, for sure, because if you're owning a factory or owning a railroad or a share of a railroad, that is a very distinct upper class. It may not be aristocracy, but aristocracy became less and less important as time went on. Flashed forward to like the middle of the nineteenth century, and you had people like Karl Marx, and we should say Carl Marx was trying to sell something which was Marxism, but he would come along and say like, hey, they're
really two classes. There's the working class and then everybody else that's exploiting the working class.
Yeah, and the exploiters or the oppressors and the oppressed. I think he also put it, they owned the capital. They were the capitalists. They were the ones who could open a factory and employ you and you depended on them for money, but they were exploiting your labor. Yes, And in this sense where there's an owning class and a working class, there's really no room for a middle class. Eventually, though, a middle class still emerged because those capitalists aren't going to,
like you said, do their own books. They're not going to go teach the next generation of workers to come work in their factory. So like there was a need for people to train the working classes to better serve the capitalist elite. And that's where the middle class really started to emerge in the United States in particular, but also in the UK, Australia, some of the other places in the West. That's where that the middle classes we understand it now, really developed.
Yeah, for sure, and it was there during the time of Marx, but that wasn't good for Marxism to point that out. So yeah, it was very much easier for him to say, like you're being exploited or you're the exploiter. It was a little black and white, yeah, for sure.
So in the nineteenth century, the middle class values system started to kind of take shape, which is, you know, sort of this the value system that ideally is still around today, which is the idea that you know, if you work hard, you save up, you can be a success. In the United States, you know, they agreed that people should vote more and more like have access to voting.
And of course that started with like, hey, maybe men that aren't land owners should be able to vote, and then that kind of spread throughout the years to you know,
people of different races, and then women finally. But the idea that expanding voting rights and expanding education was always sort of a middle class value, and then early on it was you know, the role of women in society has definitely changed as far as the middle class value goes, but early on it was, hey, women are very important to keep the home, but really be the moral center of the world. Of the home, you.
Know, yeah, of the family, which was of utmost importance, the nuclear family, which became really important in the Victorian era and really informed the middle class values too, right, and all of those seem like so we take them for granted so much as values typically aside from you know, forcing women to work in the home whether they like it or not, that just goes to show you how effective the middle class was at spreading its basically imposing its values on everybody else in the West.
Yeah, for sure. Should we take an early break here, Well, it's not too early, actually, I think, so, Yeah, all right, we'll take a break. I think that's a good setup. Middle classes forming. Everyone's getting excited, and we'll fast forward to the twentieth century right after.
This definitely about our childhood et r.
Y Skur, all.
Right, I promised talk to the twentieth century in the middle class, and that's where we are, uh specifically, you know, this is when the middle class in the US really really emerged as like a massive thing, like the largest portion of a like set of people in the US became middle class in the in the twentieth century, and really after the war. It was powered by the New Deal.
Of course, after World War Two, the United States was in a unique position as as victor, but also victor who didn't have the war fought on their you know, mainland soil, right, so we didn't have to do all this rebuilding after the war. So we were in a position to really he hit the throttle on economic stimulus, which was brought about via the New Deal.
Yeah, and World War two. Just the sheer amount of money thrown into the economy from the government for World War two helped as well, right, And we had all those technologies that we developed that gave us things like pop tarts and stuff immediately after the war and completely improved the quality of life for people in the United States,
especially the middle class. Right, so you have government policy like the New Deal, like the National Labor Relations Act that are favoring workers, this working class that is becoming the middle class. And then one of the other, really really really big aspects of what built the middle class
and the United States and elsewhere were unions. Union membership, because if you can bargain collectively, you can't be exploited nearly as easily, and that means that life is a lot more fair for you, the worker, because you're allowed to get together and say no, you can't do that to any of us. If you do that to one of us, you do it to all of us, and we'll all leave.
Yes, I mean we did. We did a great episode on unions years ago, So I advise you to go listen to that now if you want to learn more about those But no, no, no, everyone else. I mean you can if you want. Okay, a little refresher, But union membership really bloomed in the nineteen thirties and forties. I think at the beginning of the twentieth century, it was in the low teens union membership and then it
really really rose from there, and so did wages. Between nineteen forty and nineteen sixty, if you were a non farmer, your median weekly income rose. And these by the way, everything we're doing is in twenty twenty five dollars, just to make it easier to understand, but your median weekly income for a non farmer went from five hundred and fifty dollars to over one thousand dollars, almost eleven hundred bucks. And that was across all you know, a lot of
edgecation levels, you know, different racial groups, different industries. That was sort of a broad change. So, you know, it was an interesting time in that, you know, pay for people and what is now like a solid middle class, it was really rising. They were taxing the rich and constraining corporate power such that some people called this this time the Great Compression, where the wealth levels were sort of smashed together on a graph instead of expanded vastly
like we are now. We're gonna have some shocking numbers for you later in this episode.
Yeah, So that era between nineteen forty and I think a lot of people essentially put it at the mid seventies is when they say the party really started to end. Was just as economic boom golden age for the United States and the middle class. And there was another big
factor too, which was home ownership. We did I remember in our racial discrimination or housing discrimination episode that we did, we pointed out that owning a home has long been really important, especially for the middle class, because that is how you generate wealth. For most people, your home just appreciates some value over the years, and then you can also use that home to transfer that wealth to your kids. So it's also a form of generational wealth transfer for
the middle class. So it's really big deal to own your own home. And that was another big thing that happened after World War Two. Home ownership went up quite a bit.
Yeah previous and this is going way back, but between eighteen ninety and nineteen thirty, home ownership was under fifty percent of the United States. And eventually, you know, thanks to the suspect mortgages that they were handing out like candy in two thousand and four, that peaked at I think it was close to seventy percent, like sixty nine or something.
Yeah, for sure, and then I think it dropped down to something like sixty five and is basically plateaued since there. But this is the point that that you could own a house, you could own a car. Yeah, you could have a family of you know, a husband and wife and two kids and live in the suburbs, and the kids would go to a nice school. And this was obviously, this is the most idealized version what we're talking about.
There's a lot of disparity. There was a lot of people who are still very poor in the United States too, But overall, if we're just focusing on the middle class, you could do all of these things and have a nice, comfortable middle class life, a pension after you retired, on one salary, one income, because again, one of the main values of the middle class at this time was that the mother stayed home, raised the kids, and made the house the center of the nuclear family, respite from the
rest of the world. One salary could do all of that.
Yeah, and it was you know, people weren't as far apart as they were financially speaking, like you may live in the same neighborhood or maybe the neighborhood next to your boss. You know, blue collar workers and white collar workers were were way more you know, just kind of
squashed together, like your children probably went to school. If you were like a line worker at an auto plant, you know, you may not have as nice of a car or as big of a house as your manager or your boss, but you know, it was in the It was in the same world. And you know, I still remember that stuff growing up in the eighties, like the watch any John Hughes movie, and like all the
kids at the same school. They were like, you know, the rich kids and then the kids that lived in that neighborhood, right, but it wasn't extreme wealth and poverty.
No. And the fact is they were all going to the same school exactly. There was like a leveling from that. So yeah, that was a really big deal. And this is this is going on through about to the mid seventies when things started to decline for the middle class. Right. Yeah, there's there was the end of the post war boom. I mean, that's really tough to keep up in the form that it was in for very long. Yeah, and
it's kind of astounding it stayed up that long. Part of it was that the US was in that unique position, like you said, it didn't have to rebuild after World War Two like Europe and Japan did well. After a few decades, Europe and Japan were able to rebuild and they started to catch up to the United States, which meant that they were taking more share of the United States pie with say like exports and manufacturing and stuff.
That was one factor too. There was also the oil crisis. Yeah, I think that that made a bigger dent than I ever realized that that was like a history changing event, the OPEC oil crisis, and then also political conflicts that ultimately laid the bedwork for today's culture wars, civil rights movement, feminism, environmentalism, LGBTQ plus US rights. All of these things were marginalized groups. Previously marginalized groups came forward and said, no, there's no
reason we should be treated like second class citizens. That created a tension in the United States. A lot of corporations came in and figured out how to exploit this for their own ends, and that eventually started to divide people to where there was this sense of competition is the bedrock of American capitalism, and American capitalism is the bedrock of the middle class. It's part of the middle class. It's a new middle class value. It's where we got yuppies in the eighties.
Yeah, for sure. The industrialization also happened. In nineteen seventy if one in out of every four non farming jobs in the US was in manufacturing, and by twenty seventeen it was one and eleven. So other countries, you know, as globalization and trade increased, other countries started making stuff super cheap. Like this isn't a big surprise to anyone to this. Imports from China started coming in, Imports from
other you know, Southeast Asian countries started coming in. Stuff was a lot cheaper to buy, and you know, they started automating a lot of stuff. It was, you know, kind of the first automation boom was happening in the nineteen seventies where factories didn't need as many people on the line to do stuff that these new machines were doing. So that coupled with deunionization, really, you know kind of dropping off, was a huge factor.
Yeah, and it really definitely declined that it's below ten percent for the entire workforce in the United States. A huge chunk of that is just from government jobs like teaching, they tend to have a very strong union. But overall, it went from like thirty five thirty six percent to ten percent. And one of the reasons that that happened is because the government basically withdrew its support for unions.
Not only did it stop passing legis enforcing legislation that supported unions, it actually started issuing legislation that harmed and crippled unions and essentially removed their power.
Yeah, for sure. And then the last reason, you know, we can't talk about the middle class and wealth disparity without talking about Ronald Reagan. You know, he's the one that kicked it off. And subsequent administrations definitely didn't do
the middle class any favors. But those Reagan era policies that trickle down economics, cutting taxes for corporations, undermining labor unions, cutting taxes on the top earners individually really transformed the look of our nation heavily, heavily in favor of the rich and you know, the top ten percent, especially the top one percent. And like I said, other you know, Democrats and Republicans since then have failed the United States
and their policies. I know, after the economic crash and the real estate crash in two thousand and eight, there were a lot of people, especially now in hindsight that look back and say, you know what, we really had an opportunity there, and the Obama administration failed us. When we bailed out those banks with not very many strings attached.
We had some leverage there to sort of get some changes in place that could have helped, you know, shift the look of the financial outlook of our country, and we didn't do it.
No, And what they would have been doing is undoing damage that was done during the Clinton administration where they repealed the Glass Stegal Act that kept banks from dabbling investments. You were either a bank or an investment company, which one and after that you don't have to choose, And that's ultimately what helped lead us to that massive financial crisis, the Great Recession.
Yeah.
So yeah, it's really easy and fun to pick on Ronald Reagan and Margaret Thatcher for kicking all this off, but they were not the only neoliberal presidents to come along after the eighties.
No, for sure, if you're talking about the middle class today, you really have to start with like how do you define the middle class? And Libya did a really great job in this section. I think like there are a lot of different ways that people and pundits like to
talk about what the middle class even is. Some social scientists it's just a super straightforward income based definitions, which is good in one sense because you can adjust that depending on where you are in the world, Like a middle class income in New York City isn't going to be the same thing as in a rural area, so they can you can adjust things economically based on just a strict income based definition, which is kind of cool.
Also, that means that the middle class doesn't move out of reach of certain people too. Like if you just have the median income and say that's the middle class, As the median income grows, the middle class goes up and some people stay behind. This is like here's the middle class section, and you can get into it and out of it, or drop out of it and go above it. But it's going to stay in the same place, and it's just going to it's going to change depending
on how wages rise. Yeah, it seems like a pretty good it's a good idea to me. The most widely used one comes from the Pew Research Center, and they it's an income based approach that they use, but they basically say that if your household income is two thirds of the median household income or up to double the median household income. You are middle class, right, and I think in twenty twenty four that meant that your household
is very important too. That your household made between fifty five thousand, eight hundred and twenty dollars to one hundred and sixty seven thousand, four hundred and sixty dollars any anywhere in there, you were middle class income wise.
Yeah, and this is all obviously like pretext money.
Right, yeah, oh yeah, I would think so. Yeah.
So under that definition, the middle class made up sixty one percent of households in nineteen seventy one, compared to just fifty one percent in twenty twenty three. But at the same time, the upper income category went from eleven percent to nineteen percent and the lower percentage rose from twenty seven percent to thirty percent. So what you're seeing is like the wealth gap like happening in real time, basically.
Yes, But that also suggests that eight percent of people in the middle class moved up from the core middle class to the upper income category. So that's what that's an interpretation that a lot of people who are like, no, the middle class is fine, suggest.
Right, then three percent moved down.
Right, Yeah, so that's yeah. Income is like, if you're an economist, this is what you're looking at. If you're say anthropologists or sociologists, you might say, well, who considers themselves middle class? Maybe we should look at those people and then kind of study them like that, like ask people are you middle class or not? Are you working class?
You consider yourself upper class? And they usually either divide it into those three lower class, middle class, upper class, or else they divide it into quintiles lower class, working class, which they would also call lower middle class, core, middle class, upper middle class, and then gob smackingly rich.
And one percent saying buzz office, none of your business. Quit ask any questions.
They have them arrested.
So twenty twenty four was the last Gallop poll that we have where someone said, like, hey, what do you consider yourself? And in the United States, thirty nine percent of citizens considered themselves middle class. Another fifteen percent said there were upper middle class, which brings that grand total
to fifty four. Thirty one percent identified as working class, twelve percent is lower class, just two percent of upper class, which means a lot of those upper middle class people were lying liars and that they're really part of the upper class.
Yeah, for sure, But I think also it's not I'm sure some people were like I don't want to say, like I feel upper class.
And self identification, so it makes sense.
Sure, But at the same time, also I think that has to do with the idea that maybe based on income, it's almost like that vibe session thing like, yeah, your income would put you in the middle class, but you don't feel wealthy. You feel like you could be ruined by a healthcare crisis at any time. So I think, especially with self identification, that gives you a sense of the actual health of the economy as far as like consumer confidence is concerned.
Yeah, and there's you know, laziness factors in. You could be in the upper middle class but also still have a car tire sitting in your sideyard for sure, with like typical markers of you know, different glasses.
For sure, tires in your side Jock, I gotta get mine moved.
Emily got onto me for years about the car battery that I had that I just it's like, got to get rid of a car battery. I know you can, Oh, you take it to like one of the auto stores, I know, but none of those feel right.
They know they take the core out and yeah it's they recycle them for real.
Yeah, because you've watched them do all that right from beginning to help.
I help on weekends as just as pro bono.
That's my point is, I don't I don't trust any of it. None of it feels right.
All right, I'm with you. Well, you want to know something that really opened my eyes and changed my life, Chuck, I realized recently that that whole like grocery store recycle bag recycling thing is a total scam. Like publics and all them who have those those things out that said put your plastic bags in your we recycle them. They don't.
They don't. They throw them away. And I can't tell you how how much time I've spent, like taking labels off of plastic wrap, shaking out plastic crap to make it clean, like taking it all bundled together, taking it to publics and putting it in the bend. And then the idea they just take it and throw it away and use this as just like a pr thing. Oh my god, I'm so sick of stuff like that.
Man agreed two quick things on that. You can't count on your large grocery store chain to do that. You got to go to like the Charm. You got to go what we have here in Atlanta and Athens, the Center for Hard to recycle Materials, because they really do the work. It's just a big pain. And number two, just as a quick aside, I went to Belize on winter break recently, had a great time, but the grocery store in there was a grocery store in Placentia named Publics.
Publics same exact font and coloring as Publics.
It's like Ricky Rouse and moneld Muck thought it was very, very funny. It's funny. They're like, we spell it different.
What all right? So we're getting off track. The one of the last ways, I guess, second to the last ways to look at it is through education levels, because a lot of times when you hear you know, pundits on the news talking about the middle class, they'll say things like, you know, people with a four year college degree, that's only about forty percent of the population in the US,
and it's really misleading. So I wish they'd just kind of throw this one out with the Public's grocery bags because you know, you could have a four year degree and be a college professor that also has to have a second job to make ends meet. Or you could also not have a college degree and on a multimillion dollar you know, sort of blue collar business. So I say, just get rid of that one.
A multimillion dollar battery recycling.
Business, yeah, because that's where all the money is.
So yeah. So values also, I agree education levels, just get rid of that, especially with college not really leading to many as many opportunities today as it used to and all of the incredible debt associated with it, that should not be a measurement for the middle class. Values is another one too, And this one I was kind of like, what why, Yeah, and I realized you can't measure social groups strictly on things like income. That self
identification thing has a lot to do with values. One we talked about is a nuclear family, which has been altered dramatically since the middle of the last century. When I would say, I would argue in the United States at least the nuclear family was like at its peak of importance. It's definitely declined. People kind of make family
wherever they can find it. And that doesn't mean that like all of the values are gone that there was a twenty ten Vice President Joe Biden middle Class task Force had no idea that existed, but it essentially went through and said what are your values and they came up with pretty basic stuff that that I think most middle class people would agree with. Economic stability and security. You want a car for each of your kids as they get to driving age. You want to take a
family vacation once a year. You want to send those kids to college. You want to own your home, like really basic stuff. And the idea that all of that is up for grabs in this country right now is really alarming.
Yeah, for sure. Should we take another break? Yes, all right, we're going to take a break and we'll talk about what's gone wrong with the middle class and where we might be headed right after this.
Definitely large holds of each o.
Y s k.
Is okay, Chuck. So, I think we've kind of said a couple of times that there's a lot of different ways you can look at things to say the middle class is doing great. I know the middle classes hauloed out in debt. One of the things that you can really kind of point to is like, how much are you getting paid. Right, that's a pretty easy one. So you can look at average hourly wages for non supervisory employees.
So that's everybody who's not a manager or like a C suite executive, right, just the regular rank and file employees. There was a peak of pay in nineteen seventy three of thirty dollars. This is twenty twenty five dollars, right.
Yeah, always or always on this episode.
Right in fall of twenty twenty five, we were at thirty one dollars and fifty cents. So we managed to gain an extra dollar fifty in average hourly wages in fifty years. Yeah, and you might think like, oh, okay, well really, let's think about inflation and everything. I did. Get this if you went back to nineteen seventy three, right, one dollar today buys fourteen percent of what it bought in nineteen seventy three. Yeah, so that means that today
it does. So you can you could buy, using the same hourly wage today fourteen percent of your groceries if you went from nineteen seventy three to today. So we are definitely worse off because things have gotten more expensive, but wages have stagnated. If anyone ever tells you that wages have not stagnated, they are lying or they're dumb or both, and just tell them so. Yeah, I've been trying really hard not to get worked up, man, and
I'm trying to keep it together. Rre we go, everybody, I'm keeping it together.
The idea of the middle class, though, around the nineteen sixties, was about wasn't just about getting to a spot and hitting it. It was about everybody continuing to grow and the overall economy of the United States continuing to grow. And that has happened, but compensation hasn't happened along with it.
From nineteen seventy nine to twenty twenty five, productivity in the United States rose eighty seven percent, but that hourly compensation rose by thirty three percent for non supervisory workers.
Right. And there's two ways you can interpret that. If you're like, well, unions are gone, you could say if you're an owner, well you get rid of the union's productivity increases. Unions make lazy workers. Another way to put it is that without the unions, you can exploit workers more easily and get them to work harder because they're afraid of losing their job. Right, Yeah, regardless of how you look at it, like, there's no way to interpret
it differently. If your wages have increased thirty three but productivities increased eighty seven percent, that means that that extra wealth that was generated had to go somewhere, and it didn't go to the workers. It went to the wealthiest people. And there are just like, if you want to just look at eye popping numbers, just look up income inequality in the twenty first century, because it has gotten completely out of control compared to how it used to be.
And I mean how it used to be. Like I'm talking the eighties.
As Sam Jackson would say, hang on your butts. What do you say, Jurassic Park?
Hang on your butts?
Yep, hang on your butt.
You need a cigarette sticking out of your mouth?
Oh, I've got it, pal, all right, So these numbers are going to be slightly depressing and slightly eye popping. Annual wages of the bottom ninety percent of Americans rose by twenty nine percent from seventy nine to twenty twenty one. For the top one percent during over that same time period, they rose two hundred and six and the Forbes four hundred lists it's a list that we put out in or Forbes magazine puts out about the four hundred wealthiest Americans.
They should probably just stop doing this altogether.
I know it ruins society.
But you mentioned the nineteen eighties, nineteen eighty two that it was the initial Forbes four hundred. It had thirteen billionaires on it. Now everybody on the Forbes list is a billionaire, and there's another five hundred billionaires that don't get on the list.
Wow.
So in nineteen eighty two there were thirteen billionaires. There are more than nine hundred billionaires in the United States right now who have a collective worth of six point six trillion dollars. I'm sorry, that's just the Forbes four hundred have six point six trillion. Forget the other five hundred billionaires.
Okay. So another thing that that Forbes list pointed out is that the total wealth in all of the United States is one hundred and forty trillion dollars. The bottom fifty percent owns four trillion of that. That means the top fifty percent owns one hundred and thirty six trillion compared to four trillion. Ah Man, there was one other statistic I found too, between nineteen seventy five and twenty twenty four, there was a wealth transfer upward to the
top percent that totaled fifty trillion dollars. So, however you want to put it, however you want to look at it, the middle class and the lower class have been held back while the wealth that they have been producing has
moved upward. And a big problem with that is when you have wealth concentrated in the hands of a few, they're making the decisions about what happens with that money, rather than hundreds of millions of people all making individual decisions and collectively making decisions that are like market signals that tell people, I'm going to go make this, I'm going to stop making this, I'm going to make this price that all these people are upset because they don't
have good healthcare, we better do something about that. None of that matters because they don't have money, so they don't have power, and they're afraid of losing their jobs. So you can do basically whatever you want to them. That's what happened.
Yeah, And you know, politically speaking, the wealth and the powers is who controls everything. They obviously via campaign donations is the most clear cut way, but all kinds of interventions to basically let the top one or two percent make the decisions for the majority. There's a social scientist and this isn't us railing on stuff. This is just how it is. Like, if you're saying this isn't the case,
then you're lying. Like you said, there's a social scientist named Richard Reeves who said that the top twenty percent of earners are basically have been completely successful in pushing zoning regulations and tax policies that benefit them all at the expense of the middle class. They gain the systems to pass that you know, wealth down to their children or to get their kids into the better It's just the way things have gone in the United States.
Yeah, and the problem, one of the big problems is people are going to be all over our iTunes reviews being like, these guys are liberal idiots. You don't know what they're talking about. It's not liberal and conservative, and it's not Republican and democrat. This is strictly a class issue, and the idea that you are defending a class beyond
yours that is exploiting your own class, including you. That's a problem because it's presented as a political thing, and we're so tribal when it comes to political affiliations that you will defend against your own self interest.
Yeah, because it's.
Being presented to you as a political issue, and it's.
Not happens every voting season. That happens.
Yeah, And it's true. And I'm not picking just on conservatives or Republicans like Democrats do it too, like tr tribal and toxic and unhealthy. And if, oh man, if we could ever come to get there and break down those lines, oh my gosh, people are so ripped up right now that it would just be magnificent, the sweeping changes that would happen. A new renaissance, Yes, renaissance too, the sequel to h Yeah.
Here's the thing. You know, Goods have gotten cheaper though, if you want to look at again, comparing in today's dollars, groceries are generally cheaper than they were in the mid seventies because the mid seventies, as we said, was pretty bad. Things like you know, clothing and furniture, electronics, all that
stuff is way cheaper than it used to be. If you look at you know, back when you bought a VCR, when those first came out, and they were like a thousand dollars, you know, stuff like that is all like the bottom has fallen out on those kind of prices. But that hasn't happened in the housing market, which is a big deal for the middle class. Like you said in Act one, that median sales price of a house and again in today's dollars, it was three hundred thousand
dollars in nineteen seventy nine. It's more than four four hundred thousand dollars today. And I think we said it was sixty nine point two percent at its peak of home ownership in two thousand and four. As of I think twenty twenty two. You know, what's happened is that you know, I think you said if it was about sixty five percent, so it's not that big of a difference, but it's that age of buying your first house has
just gotten older and older and older. In twenty twenty two, only sixty two percent of forty year olds own their home, whereas the Boomer generation sixty nine percent of forty year olds owned. And the same can be said for rent and childcare, in college and healthcare. It's just all these things are outpacing earnings.
Plus also that sixty two and sixty nine percent is a little misleading because there are way more boomers than there are Gen x who are forty now, So that so sixty nine percent of boomers is a new manically a much bigger group than sixty two percent of gen.
Xers, right, which also means that that's a greater number of houses that are now locked up right being passed on to their kids. And you know, not saying that you shouldn't own a house and pass along your kids, but that as far as the housing market goes, that's just a lot, right.
So Chuck, what do you what are we going to do about this? What are some things we can do?
Oh? Man, let's solve it right now on the spot. Well, I mean, I don't know, man, It's not like this all over the world. If you look in Europe that there is a middle class there, but it's not quite the same. They aren't maybe don't have the kind of wealth that upper middle class does here, but they have the income and quality isn't as great generally, they have stronger social welfare programs, like the danger of falling into a desperate life straits isn't as great over there. I
saw I think on Instagram recently. It was an interview with a guy that was a had a good job.
You know.
It was one of those stories where the guy was on the streets and he had a degree in chemistry and he had a good job, and you know, I read the comments because I was curious if people were going to be like bashing this dude or what. And hearteningly, a lot of the people were like, Hey, I worked in shelters for the un House for years and we
saw all kinds of people come through here. We saw doctors and attorneys and people you know that just you know, sometimes you're a bad circumstance or two away from that kind of situation, and it's just not like that in Europe generally speaking.
I remember during the two thousand and eight recession of reading some statistic that something like at the time like forty percent or something like that of Americans were one paycheck away from being homeless. Like that's how little savings and cushion that most Americans had.
Yeah, or having to make you know, healthcare decisions like that aren't good for your life because you can't afford it, because it will bankrupt your family. You're having to put yourself and your family in peril physically.
Right, That's part of that why the European middle class is much more secure because most of them have universal health care.
Yeah, they're not bankrupted by a diagnosis.
Right, But even on more day to day pedestrian stuff. So the lower income you are, the more inflation affects you. Where Like if your higher income and you go gas up your car and you're like, wow, gas went up twenty cents today, that sucks, and you just don't think about it from that point on. If your lower income, you might roll up to the gas station and be like, oh, I can't afford to drive my car to work today because gas went up twenty cents a gallon. So that's
another issue with the whole thing too. It makes it tougher to get a head when you can't afford the basic necessities because they're growing out of your reach day by day.
Yeah. I mean when I was a snot nosed, no at all college kid working at Golden Pantry in Athens, Georgia, I used to and you know, I was working at Golden Pantry, so it's not like I was making any kind of money, but for a college kid, it was like, hey, that's great. I had everything I needed making that seven dollars an hour or whatever, because my parents were generally paying for my education and it's like easy street. I would I would wonder why someone would come in and
buy like seven dollars worth of gas. I aloud be like, what a weird number? Why are you putting seven dollars worth of gas? Because it didn't occur to me that's all that they could afford. It's like, why don't you just fill your car up? And it's like because it couldn't afford to dummy? Right, I was a dummy, that's right.
Yeah, No, I know exactly what to mean. I've been on both sides of that.
Yeah, I mean, you know the night abitab a college kid, So in a way.
Was that the golden pantry at Alps?
Uh No, I worked on the college station road.
Okay side, gotcha. So we didn't figure out how to Yeah, I had the same kind of job, and it is a very weird job. So we didn't figure out how to fix anything. Chuck, you got any ideas, I think that you could learn a lot from Europe expanding social safety nets. We could stop making that a political thing
and be like, no, actually, this can help everybody. I saw that in New Mexico has started free childcare for all, doesn't matter what your income level is, doesn't matter, Like you can put your kid into childcare for free, and that's a huge expense that save for the average person.
Yeah.
I think New York is trying to do that, like Mom Donnie is trying to to institute that in New York City too, So that could be a huge trend. Just free childcare, Universe childcare could make a huge difference in people's income.
Yeah, and all of that is because people want to go out and work their job to make money for the man.
Yep, yeah, well put man, you got anything else?
Got nothing else?
Okay, I don't either, which means it's time for listener man.
It is a quick correction. We heard from people from Tennessee because we stole their college. Hey guys, longtime listener here. Your show has fueled many runs and chores over the years. Quick Nashville nitpick from a proud local. In the Flexner Report episode, you mentioned Maharry being right here in Georgia. Nashville would like to gently reclaim that, guys, Mahary medical College has been proudly in Nashville since eighteen seventy six,
and we're pretty attached to it. Totally understand how geography gets slippery mid podcasts, but just wanted to defend a hometown institution and that is from Bridget Chevron or Shavaine. And we heard from a lot of people, Bridget, So I don't know how we screwed that up, but we did.
Yeah, we got it screwed up royally. I even went back and was like, surely there's a Mahary College in Georgia too. Nope, Nope, it's just the one in Tennessee. So sorry everyone in Tennessee who took offense to that, because we did hear from a lot of you.
For sure, that's right, But we're neighbors and we like to think that we're all the same.
Yeah, for sure, we all shared your medical college. Yeah, in the Tri state area. If you want to be like Bridget and send us a really nice email correcting us, we love that kind of thing. You can send it off to Stuff Podcast at iHeartRadio dot com.
Stuff you Should Know is a production of iHeartRadio. For more podcasts my heart Radio, visit the iHeartRadio app, Apple podcasts, or wherever you listen to your favorite shows.