PEW SURVEY SHOWS NEAR-UNIVERSAL INCOME LOSSES

Households in all economic tiers experienced near-universal decreases in median incomes across U.S. metropolitan areas, according to the independent Pew Foundation’s Research Center. Middle-income households lost ground financially in 222 of 229 metropolitan areas from 1999 to 2014. Meanwhile, those in the lower-income tier saw their median income slip in 221 areas and those in the upper-income households took a financial hit in 215 areas.

Pew Research Center 2014 American Community Survey

MIDWEST HAS TOP 10 MIDDLE-CLASS AREAS

The 10 metropolitan areas with the greatest shares of middle-income adults are located mostly in the Midwest, according to the independent Pew Foundation’s Research Center. Metropolitan areas with the largest upper-income shares are mostly in the Northeast or on the California coast, while the 10 metropolitan areas with the biggest lower-income tiers are in the southwest, several on the border with Mexico.

Pew Research Center 2014 American Community Survey

TRUMP’S WHITE WORKING-CLASS SUPPORTERS

[Donald] Trump’s white working class supporters — who provide somewhere between 58 percent and 62 percent of his votes, according to data from NBC and ABC polls — have suffered a stunning loss of relative status over the past 40 years. Their wages have stagnated or declined; the ascendance of minorities has threatened their cultural dominance; and the growth of an increasingly large and affluent upper middle class has pushed goods and services once viewed as theirs by right beyond their reach.

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

MANY ESSENTIAL EXPENDITURES HAVE BECOME UNAFFORDABLE

For those in the bottom third of the income distribution, even essential expenditures have become unaffordable: the $7,000 to $10,000 average cost of a funeral, the $33,865 average cost of a new car, the $18,000 average annual cost of child care.

Crucially important is the fact that rising inequality constitutes a double whammy. It raises the cost of sought-after goods and it increases the economic gap between the working class and the affluent, spurring nostalgia for what was (even if what was really wasn’t).

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

WEALTHY PULLED THE RUG OUT

“In effect, the increase in the resources commandeered by the overclass has pulled the rug out from under the once upwardly mobile white working class.”

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

WEALTHY CAN BID UP THE PRICES

Thomas Edsall, writing in the New York Times, noted: “Growing income inequality in the U.S. has meant that, as those at the top are able bid up the price of valued goods like housing and access to good schools, those in lower groups have struggled to maintain their positions.” [quoting an essay titled, “Keeping Up With the Joneses,” presented at the annual meeting of the American Sociological Association by Neil Fligstein, a professor of sociology at Berkeley, Pat Hastings, a Ph.D. candidate at Berkeley, and Adam Goldstein, a professor of sociology at Princeton University.]

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

NO MONEY FOR A CAR REPAIR BILL

A May 2015 Federal Reserve report provides a window into the financial condition of many in the working class. It found that 47 percent of Americans do not have the resources to cover a $400 bill for such unanticipated costs as a car repair or a health emergency. They would be forced to borrow from friends or family, to sell something, to go to a payday loan company or to add to their credit card debt.

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

U.S. MEDIAN INCOME IS $53,567

In July 2014, USA Today estimated that in the United States, where the median household income was $53,567, the minimum annual cost of living the American dream was $130,357.

Thomas B. Edsall, “How Falling Behind the Joneses Fueled the Rise of Trump,” New York Times, July 7, 2016, Opinion Pages.

BRITISH EXIT FROM EUROPEAN UNION RATTLES WEALTHY 

A measure of consumer sentiment dropped sharply in July, as wealthy Americans were rattled by a decision by the U.K. to leave the European Union. The University of Michigan said . . .  its consumer sentiment index fell to 89.5 in July, a three-month low, from 93.5 in June. Economists polled by MarketWatch anticipated a reading of 92.5.

Fidelity Alerts, July 15, 2016